New York's financial institutions sent most people home after lunch on Tuesday and started to implement their disaster recovery plans.

Morgan Stanley, which was the single biggest tenant of the World Trade Center, said its key focus was the 3,500 employees it had in the building, about whom there was still little information.

Philip Purcell, Morgan Stanley chairman, also said in a statement that, "in spite of this tragedy, all of our businesses are functioning and will continue to function".

He added: "We are committed to resume full operations as exchanges and markets reopen. All our clients should rest assured that their assets are safe and our financial advisers will soon be in contact with our individual investors to answer questions and address their concerns."

Other institutions had broadly the same message. New York staff were being encouraged to telecommute on Wednesday, with only those identified as being crucial to running essential processes being asked to come in.

Staff working for US businesses in other countries were put on heightened alert for fear of further attacks on US targets.

Credit Suisse First Boston, whose headquarters in New York are in the Flatiron District, some way from the disaster, said it had fewer than 1,000 staff in a building next to the WTC. The bank said it was still assessing the success of its evacuation. People at the bank said it was not clear how its New York operations would be affected.

However, New York's markets, the New York Stock Exchange, the American Stock Exchange and the Nasdaq, announced they would be closed today. "The US markets, after further consultation with the SEC, will announce [then] when US equities markets will reopen."

Other financial companies in the WTC itself still had nothing to say about their operations for the rest of this week. Marsh & McLennan, the world's largest insurance broker, said that it had 1,700 people on two floors and had so far accounted for only 500.

JP Morgan Chase shut all its branches in Manhattan yesterday and there were long lines at some of its automated teller machines.

FleetBoston also closed its 173 branches in New York for the day, including 18 branches in Manhattan. It was considering reopening those branches today.

Employees at some large institutions expressed concern that a number of the brokers and dealers they used were located in the WTC. For example, there was no official word by late afternoon from Keefe Bruyette & Woods, a small but influential broker on the 89th floor of Two World Trade Center.

Other businesses were assessing the damage and had not made many decisions on when business would resume.

Borders, which has a large bookstore at the base of the WTC, said it had evacuated all its staff and closed the store before the second blast, but said it had no way of determining the financial damage.

The ripples were felt across corporate America. Outside New York and Washington the impact included the temporary closure of several businesses.

Starbucks Coffee closed all its 3,600 North American outlets, but said it would reopen on Wednesday if officials assured the company it would be safe to do so. Lucent, the technology group, also closed offices in New Jersey.

The Federal Aviation Administration grounded all flights into and within the US until noon on Wednesday at the earliest. The act was an unprecedented logistical challenge, given that 4,000 aircraft are typically in the air above the US at any given time.

Airlines, already facing a dismal financial year because of soaring labour costs and a slowing economy, will face the challenge of reassuring passengers that it is safe to fly once airports reopen.

Analysts said the attacks were sure to have a severe impact on air travel and the New York tourism industry.

One analyst said: "This is a wholly unprecedented event in its magnitude, and the reaction will be similarly unprecedented."

Consolidated Edison, the local power utility, went into what it calls a "thunderstorm alert", increasing in-city generation. Electricity, gas and steam service was suspended in an area in the south-west of Manhattan.

Steve Sullivan, a spokesman for the New York Independent System Operator, which operates the power grid for the city, said: "We are in a heightened state of security." He added that although the group had experienced problems with its external communications, its internal communication system was unaffected.

There was little word on the impact on residences in the WTC area. Economic development groups have offered large incentives to promote the financial district as a residential area since the mid-1990s, converting former office buildings to apartments.