Work Halts as Employees Listen to News Reports : Workplace: As the reality sank in, companies with Mideast operations were scrambling to assess the impact.

The shocking word of war raced through office towers, factories, trading rooms and retail stores Wednesday, confronting Americans with painful questions that brought most work to a startling halt.

U.S. financial markets were closed, but Los Angeles currency traders who follow events in Asia peered at their computer screens. On first news of the fighting, the dollar jumped in value, then quickly sank amid rumors that the Federal Reserve Board and national banks from Japan and Germany were secretly intervening in the marketplace.

“The fundamental question is: What’s going on?” said Robert A. White, a vice president at First Interstate in Los Angeles.

Throughout the western United States, where the workday had not yet ended, employees clustered around television sets,contacted relatives and awaited news.

“We are horrified; it’s absolutely dead quiet here,” said Carnation Co. spokesman Dick Curd in Glendale. The workers “are in small groups all over the floors here--just listening. There is no conversation.”

The nation’s lifelines of transportation and communications were not affected severely by the news, although there were reports of overloaded telephone circuits, as worried callers sought to reach their friends and relatives.

MCI said its long-distance system was hit with a big surge in calling late Wednesday afternoon, in some cases causing circuits to overload temporarily. However, MCI officials said the company’s network had “more than enough” capacity to handle the steadily increasing calls. Especially heavy were overseas calls to Israel and Saudi Arabia.

At the moment war broke out, United Airlines had three jets over the Atlantic bound for Europe. No flight changes were anticipated, said a spokesman at the airline’s suburban Chicago headquarters.

About two hours after the attack by the United States and its allies, an El Al Israel Airlines flight left for Tel Aviv from New York’s John F. Kennedy Airport despite the fighting. It could not be immediately learned how many passengers were on board.

The Federal Aviation Administration has ordered airlines to be vigilant against possible terrorist attacks. Such heightened measures include closer baggage inspections and restricted access to terminals.

Employees at Pacific Gas & Electric Co. headquarters in San Francisco will begin seeing stepped-up security measures immediately. “We have heightened our awareness that there may be a need to be extra vigilant,” PG&E; spokesman Greg Pruett said, while declining to elaborate.

Despite widespread expectations of battle, the timing of the invasion seemed to surprise the heads of several engineering firms that are active in the Persian Gulf area.

Executives at Parsons Corp. in Pasadena, Bechtel Group Inc. in San Francisco and other companies rushed into emergency meetings as news of the hostilities filtered out. Harried spokespeople, glued to radios and televisions in their offices, said it was impossible to immediately assess the impact on their operations.

The report of fighting transformed typical concerns of late afternoon--traffic jams, picking up children and preparing dinner--to a sober time of philosophy and fear.

“When I was a kid, I wanted to go to war and joined the paratroopers just so I could go to Vietnam,” said Ron Cedillos, owner of Cedillos Testing, a Long Beach defense firm. “Now that I am an older man, the enormity of what a war is settles heavily into my heart.”

Workers streaming out of Arco Plaza in downtown Los Angeles at the end of the workday reported learning about the war on radios they had brought from home. “Everybody in my office had the radio on all day,” said Linda Reed, an attorney at Bank of America.

At the First Interstate Tower, Chris A. Whitney, 23, a staff tax accountant for Arthur Andersen & Co., was thinking of war in personal terms. “A lot of us who work (here) are draft age, so it’s pretty relevant,” Whitney said. “I have a couple of friends in the Persian Gulf. I sort of wish I was with them now.”

Perhaps some of the most complex reactions came from the heart of Southern California’s defense industry, which helped build the war machine that is being used in the Persian Gulf.

“I know what bombing is; all you can do is sit in a cellar night after night,” said Henry Leo, owner of Prema Precision Machining Mfg. in Chatsworth, a small aerospace shop. “It was unbelieveable what an experience it was. It was Dusseldorf. I was just a boy.”

Leo said greater effort should have been made to avoid war. “They should have solved the problem with reasoning,” he said. “We need defense, but they should have talked.”

At Sonfarrell, an Anaheim-based defense contractor, “The mood here is very somber,” said Frank Power, chief executive. “Everybody is relieved that Americans are going to do what they set out to do and disturbed that some of them are not going to come back.”

Customers in Ben & Jerry’s Ice Cream Store in Sherman Oaks were listening to an oldies radio station when the music was interrupted by a bulletin announcing that the war had started.

“We had dumbfounded looks on our faces. We couldn’t believe we are actually in a war now,” manager Thomas Allen said.

The ice cream store is a franchise of the Vermont-based ice cream maker headed by peace activists who recently spearheaded the purchase of full-page newspaper ads urging President Bush to refrain from war. Some of the high school students who work at the store have been wearing symbolic yellow ribbons to school.

Now they plan to start wearing them to work, Allen said.

Tense workers at Al Amir, a Lebanese restaurant in the Mid-Wilshire area, learned the war started when one of the employees called.

Bartender Phil Miller said about 10 of the workers have relatives in the Middle East, including a maitre d’ whose two-month efforts to get his wife out of Syria this week were thwarted by canceled flights. “She was supposed to come here yesterday,” Miller said.

A telephone call from a currency trader--who learned of the war from a computerized news service--broke the news to Kevin Michaels, assistant treasurer at AST, an Irvine-based computer maker.

“I came out (of my office) and went down the hall and told my boss,” Michaels said. “We got a radio and just spread the word. I’d say people are really shocked that it happened and kind of relieved to know that the uncertainty is over.”

At First Interstate, currency traders were perplexed by odd movements in the U.S. dollar. It leaped to 138 Japanese yen from 136.8 yen at the first news but an hour later was lower than it had started. Selling by the central banks--to avert a disruptive, crisis-induced surge in the dollar--was a possible explanation, White said.

“We’re not in here taking risks,” White added. “It’s much too volatile a market.”

At the Alhambra offices of Santa Fe International, the oil-service and exploration firm owned by Kuwait, workers also tried to follow the fast-moving events. “I’m sitting alone working at a desk with the television set on. Everybody is,” said one employee. “I hope it’s over soon.”

Times staff writers Michael Parrish, Carla Lazzareschi, Donna K. H. Walters, Denise Gellene, James Bates, Jesus Sanchez, Alan Citron, Bruce Horovitz and Ralph Vartabedian in Los Angeles; Cristina Lee, Anne Michaud and Dean Takahashi in Orange County; Greg Johnson and Chris Kraul in San Diego, and Martha Groves and Jonathan Weber in San Francisco contributed to this story.

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MIDEAST UPDATE U.S. Mint reported that sales of the American Eagle gold coin climbed in January to 48,000 ounces from 32,950 ounces in December, with analysts crediting the upswing in demand to jitters over the threat of war.

Even before hostilities broke out, Radio Sweden reported that Scandinavian Airline Services had stopped carrying packages as a precaution against terrorist attack.

Also before fighting began, the national airlines of Iran, Jordan and Lebanon halted some flights.

Chevron Corp. joined Amoco Corp. and a growing number of companies curbing wholesale sales of gasoline, diesel fuel and heating oil.

Prior to the outbreak of war, many commercial cargo and container ship lines suspended service to Saudi Arabia and Bahrain.

Five U.S. shipping groups sought emergency permission from the Federal Maritime Commission to increase rates by about 33% for Mideast-bound cargo.