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CNN Live Event/Special
America Under Attack: Stock Exchanges in a Lot of Volatility
Aired September 14, 2001 - 03:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RALITSA VASSILEVA, CNN ANCHOR: The attacks in the U.S. have taken a heavy financial toll, forcing the closure of the New York Stock Exchange and some of the markets.
For the latest, we turn to CNN's Richard Quest in London. Richard?
RICHARD QUEST, CNN CORRESPONDENT: Indeed, Ralitsa. But there was some good cheer to the extent that the Chicago Bond's Market managed to reopen on Thursday. It was a shortened section. And we saw, of course, the price of U.S. Treasuries jump.
Monday will be the big day. That's when U.S. stock markets, including the U.S. stock exchange and the Nasdaq, they're due to reopen after the four-day closure. Exchange officials plan to test the tradings systems over the weekend.
The new business day has just started here in Europe. I believe Liz George is at the London Stock Exchange to bring us up to date as our early indications. Liz.
LIZ GEORGE, CNN CORRESPONDENT: Richard, thanks very much. Indeed, I'll show you the figures that our markets are actually trading out. But I want to add a note of caution here really. No one's taking too much notice at the moment of what's happening on these indexes.
They're jumping around all over the place. Really, there's very light trade going through that. There's an awful lot of wanting to wait and see -- waiting for the U.S. markets to open.
There's a big feeling of awareness really, that even when this New York's market do open, we're going to have probably run about four weeks of enormous volatility before things begin to settle down. So people are very aware that actually, although these figures coming out, trades are being done.
Really, price is all being stuck at wild levels at the moment, so it's very light trading. There's an awful lot of movement in these markets, a wavering around in this very thin trade
So at the moment, the FTSE is up 0.39 percent. The Nasdaq is up 0.86 percent. And then in France, the CAC-Quarante is up 1.24 percent. Richard? QUEST: Liz George at the London Stock Exchange, a quick reminder there was some gains in Asia in the overnight trade in both Tokyo and Hong Kong.
Now as the rest of us continue the grim task of sifting through the rumbles, it's becoming increasingly clear the size and scale of the damage. Not only from the destruction to the World Trade Centers, but to the surrounding buildings and businesses.
Insurance industry believes, that the cost of repairing the physical damage could be well in excess of $20 billion. Andy Cook is the editor of "Insurance Times." He joins me now for a closer look at he long-term impact of the attack.
Andy, it's unsavory, but we must, to some extent, the size and scale in relation to the insurance industry.
ANDY COOK, EDITOR, "INSURANCE TIMES": Well, we've been talking to actress or the accountants of these insurance industry. I'm now saying that it could be up to 100 billion, although the low limits is sort of 50 to 20. But yes, 100 billion is certainly a possibility.
QUEST: And this isn't just of course for the -- for the buildings. It's for the tremendous loss of life. It's for the loss of business.
Give me an idea of how far and wide this goes?
COOK: Well, it starts with the public library -- let's see if -- say the World Trade Center itself and the interest effects some of the businesses around that. But it goes as far as UK, Europe, business men in Europe who's trying to fly to America. They can put planes in against their travel insurers because they haven't been able to go across. And the ripples, just, you know, go even further.
QUEST: At the end of the day, when blame is finally laid, and besides the blame, I mean besides the terrorists who committed the act, we're talking about where the insurance blame lies. It's possible that this will all end up with either the airlines, the airports or the security companies. Is that right?
COOK: That's right. The chain of events will be that the companies within say, the World Trade Center will claim against the World Trade Center itself. The World Trade Center may then claim against the airlines and the airlines then have to make claim against the airports for letting the hijackers onto the planes.
QUEST: Can the insurance industry withstand these vast sort of losses?
COOK: Yes. The sums we're talking about are being shared around many, companies. The, sort of, structure of it is that you have an insurer and underneath the insurer then gets its policies reinsured. And the reinsurers themselves get reinsured. So we're actually talking about lots and lots of companies sharing small packets of costs. QUEST: In London, Lloyds of London ran the Lutine Bell, which, of course, is rung at times of great tragedy. And this is often thought of as the center of the insurance world. But also, in Zurich, as well, the European companies there will bear a lot of the financial loss.
COOK: Some of the biggest companies to take a loss in this will be from central Europe, people like Zurich Re, Swiss Re, Munich Re, they're the companies that underpin the whole industry.
QUEST: Andy Cook, many thanks indeed. That's the way the business world looks for the moment from London.
Ralitsa is in Atlanta for the last of the news. Ralitsa?
VASSILEVA: Richard, thank you. Looking ahead, Friday is an official day of mourning in the United States and Europe. President Bush is planning to visit New York for a first time look at the devastation. The FBI is questioning eight people arrested at New York's two major airports in a security crackdown. Sources say four of them also were challenged at one of the airports on the day of the attacks. Thursday, they were taking into custody for carrying fake documentation, including one suspect carrying a phony pilot license.
What happened on Tuesday has brought about acts of extraordinary kindness from Main Street to Wall Street. CE, Cisco, Microsoft and AT&T are just a few of the giant names that have pledged millions of dollars to the rescue operations. It's all part of an effort that's seen business, big and small, play it's part.
Susan Lisovicz has more.
(BEGIN VIDEOTAPE)
SUSAN LISOVICZ, CNNfn CORRESPONDENT (voice-over): New York's financial district remains shutdown. But they are already back in business on this Ping-Pong table two miles north. Employees of the consulting team Kasina, can't get to their lower Manhattan offices because the area is sealed off. But they're working in a makeshift office donated by a local business.
LEE KOWARSKI, Kasina CONSULTING FIRM: Obviously, finding space, it is amazing. You know, two days later we have a new phone number and some space to get back, continue doing what we need to do.
LISOVICZ: The "Silicon Alley Reporter" is offering 14,000 square feet prime midtown office space free to businesses left homeless by Tuesday's terrorist attack. Another firm, Bluefly.com, is donating 9,000 square feet of space.
KEN SEIFF, BLUEFLY.COM: Domino's Pizza offered to send pizza up for the new tenants. And we've had people who have volunteered engineering services and computer services and furniture rental. So it's been pretty surprising. And we're obviously grateful for their response that's followed on from this.
UNIDENTIFIED MALE: We need any amount of voice-mail.
UNIDENTIFIED MALE: OK. Oh, really?
UNIDENTIFIED MALE: Yes.
LISOVICZ: The CEO of the "Silicon Alley Reporter" says it is the right thing to do.
JASON CALACANIS, SILICON ALLEY REPORTER: We have to realize that one of the reasons that people did this was to screw up our economy. It wasn't just to psychologically scar us, to kill people. They want to shut down the economy. And these companies, midsize companies and small size companies are the bulk of our economy. And they're going to go out of business and people are going to lose their jobs.
LISOVICZ: For those helping out in this time of crisis, it is goodwill and good business.
Susan Lisovicz, CNN Financial News, New York.
(END VIDEOTAPE)
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