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Lou Dobbs Moneyline
Nasdaq Advances 16.50 to 1,597.31; Dow Declines 62.90 to 9,060.88
Aired October 04, 2001 - 18:00 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.
LOU DOBBS, CNN ANCHOR: Good evening. While the world awaits word of possible military action, the United States presses on building anti terrorism coalitions and rebuilding its economy. Tonight, we'll report to you on the complex ties some of that our allies have with countries that either sponsor or support terrorism. Tonight we'll also look at our dependence on oil from the Middle East, how likely it is that oil supply may be disrupted, and our government's strategy should this occur.
We'll also be joined by Senator Max Baucus, who chairs the Senate Finance Committee. We'll be talking about economic stimulus plans. And we'll hear from anti terrorism expert Nikos Passas on underground terrorist funding and how to choke it off.
But first, let's take a look at the latest developments in the war on terrorism. President Bush today unveiling a $3 billion emergency package today to help people who have lost their jobs as a result of the attacks on the Pentagon and the World Trade Center. Earlier today, the president pledged $320 million in humanitarian aid for the Afghan people. Mr. Bush also stressed that America's anger is directed towards the Taliban and not the Afghan people. We'll have a live report for you from the White House in just a moment.
Defense Secretary Donald Rumsfeld arrived in Cairo to shore up support for any U.S. military action. He later travels to Uzbekistan. This morning, he met with officials in Oman.
Pakistan says evidence gathered by the United States is enough for an indictment against Osama Bin Laden. Washington's Reagan National Airport today reopened for business, but at a much reduced capacity. Reagan National was the last commercial airport to reopen since the attacks of September 11.
A Russian airliner may have been accidentally shot down over the Black Sea today. The Siberian Airlines jet was carrying 77 people when it disappeared early this morning. U.S. sources say they have evidence that the jetliner was shot down by a missile during a Ukrainian military exercise. The Ukraine denies it. Russian and Israeli officials say they've not ruled out terrorism. The plane was en route from Tel Aviv to Siberia.
A 63-year-old Florida man has been diagnosed with anthrax. But Health and Human Services Secretary Tommy Thompson today said it appears to be an isolated case. The secretary also said the illness is not linked to any threats of biological terrorism. The FBI along with Florida health officials are working to locate the source of the man's illness.
President Bush meeting with Mexican President Vicente Fox and the Emir of Qatar today. The meetings are part of the continuing effort to build international support for the fight against terrorism. Major Garrett joins us now from the White House with the story -- Major.
MAJOR GARRETT, CNN CORRESPONDENT: Good evening, Lou. The White House believes and has said over and over again, you simply cannot have too much diplomacy at a time like this. President looking far and wide to build that international coalition you referred to against terrorism. This morning inviting Vicente Fox, the Mexican president to the White House for his third visit.
A bit of a subtext to that visit, Lou. There has been some criticism in Mexico that Vicente Fox was not amplified enough in expressing his condolences or offering us any military assistance or whatever Mexico could in fact provide the United States in the immediate aftermath of the September 11 attacks. Vicente Fox has become very concerned about those criticisms. Bush White House invited him to show that there is absolutely no distance between the two close allies. The two are very good friends. That is to say, President Bush and President Fox. And the trip here to the White House today meant to underscore that close friendship and support from Mexico for the United States.
Also this afternoon, a meeting has concluded between the president and the Emir of Qatar. Again, that is also a part of building that coalition in the Middle East, that part of the world so vital to U.S. concerns. The president, as you mentioned at the top, Lou, announcing $320 million of humanitarian assistance. That's food, medicine and other supplies to the thousands, potentially millions of Afghan refugees who may be fleeing to neighboring countries.
And our Jaime McIntyre, our defense correspondent, who is traveling with Donald Rumsfeld, has just reported that a senior Defense Department official has acknowledged that the United States is considering -- considering -- taking preemptive military action against any surface-to-air missile site that may try to stop the airdropping of those humanitarian supplies into Afghanistan. That's a new, late development there, Lou.
But clearly the United States wants to use this humanitarian means as a way of sending a signal to the Afghan people that the U.S. quarrel is entirely with the Taliban, not with them. The president reiterated that point at a stop at the State Department today, where he announced the program.
DOBBS: So in effect, there, Major, hostilities could begin in support of an aid effort before actually a retaliation against Osama Bin Laden and the Taliban for the September 11th attacks.
GARRETT: It's important to note, Lou, that a lot of different signals are sent by this administration to a lot of different audiences. That is the latest signal that in fact the U.S. considering the prospect of taking preemptive military action against any site that may inhibit or try to block efforts to provide this humanitarian assistance.
DOBBS: OK. Major Garrett from the White House. Thank you.
Before launching any attack on Osama Bin Laden, the United States has been working diligently to line up the support of other nations. But some of those new allies may have ties to countries that either sponsor or support terrorism. And some of the allies may still want to do business with those nations. Kitty Pilgrim has the report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT: Terrorists have been trained, nurtured and harbored in many countries around the world. Each year the U.S. State Department issues a list of states which sponsor terrorism, currently listing Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria: states which the U.S. has refused to deal with on any level, diplomatic or commercial. Yet these standards are not upheld by other countries, including U.S. allies.
ELIE KRAKOWSKI, AMERICAN FOREIGN POLICY COUNCIL: In general terms, the United States has taken a more principled stand with regard to the sponsors of terrorism than have many of the European states that have persisted in dealing with them in a business-as-usual sense.
PILGRIM: Iran, by most accounts, has exported more terrorists and terrorist acts than any other nation. Iraq still under U.N. sanctions for its role in the Gulf War. Yet other nations are clamoring to trade with Iraq and Libya. Yet all are viewed as potential sources of oil.
JIM PHILLIPS, HERITAGE FOUNDATION: The lure of Iraqi oil is very strong for Russia, which wants to get a foothold in the lucrative oil market. Also for France, which wants to get its foot in.
PILGRIM: Cuba is an open trading partner with many countries in Europe, even though the U.S. embargo is still in place, a major point of friction in U.S. trade relations with Europe.
(END VIDEOTAPE)
PILGRIM: The countries where terrorists operate can be just about any industrialized nation. Simply targeting terrorist's states makes sense. It's clear as the coalition-building continues, vigilance must be tightened. Its not that simple when it comes to international politics --Lou.
DOBBS: Kitty, thank you. Thank you very much. The distinct possibility of war in the Middle East raises some important questions. Questions such as, how much does the United States rely on oil from the Middle East? And how prepared is the United States should that supply be disrupted? In event of a supply disruption, Washington would in point of fact have to appeal to U.S. allies such as Mexico and Canada for some help. Peter Viles has the story. (BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT: The Big Hill oil storage facility in eastern Texas: 160 million barrels of oil stored below ground, part of the nation's strategic petroleum reserve . But with U.S. military strikes expected soon, Congressman Joe Barton wants the government to stockpile even more oil.
CONGRESSMAN JOE BARTON: As we sit here today, if there were a complete disruption, we would only have about 53 days worth of oil in the strategic petroleum reserve.
VILES: Complete disruption is unlikely. The United States imports 54 percent of the crude it uses, and gets much of that from friendly western nations. Canada, Venezuela and Mexico supply a combined 24 percent of U.S. needs. But Persian Gulf nations are key suppliers. Saudi Arabia 8.9 percent of U.S. consumption. Iraq, 3.2 percent, and Kuwait, 1.4 percent.
Any disruption in those supplies would likely send oil prices skyrocketing. The government's main buffer against supply disruption is the strategic reserve, stored underground in four huge man-made salt mines near the Gulf coast.
The Clinton administration, in a controversial to drive down retail prices last year, authorized swapping out up 30 million barrels. That leaves the reserve with 544 million barrels in storage. Barton wants to fill it to its capacity, 700 million barrels, and expand that capacity to one billion barrels.
FADEL GHEIT, OIL ANALYST, FAHNESTOCK: Raising the level of the strategic petroleum reserve is a very wise thing to do. Unfortunately, in the last eight years the government has neglected doing so, even though crude oil prices in 1998 hit very low levels, and that would have been a golden opportunity for the government.
(END VIDEOTAPE)
VILES: In the event of a supply disruption, Washington can and likely would appeal to oil-producing allies such as Mexico and Canada. We understand there are informal diplomatic arrangements to do that already. But the global oil market is a free market and a very volatile one, and there is no clear protection against skyrocketing prices -- Lou.
DOBBS: And what effectively you're saying is no certain protection of those oil supply routes.
VILES: Correct. But 544 million barrels is a long time. If you take Saudi Arabia, for example, at a million or two million barrels a day out of picture, the United States could clearly cover that for some time. The problem is prices would rise dramatically.
DOBBS: As you point out, prices would rise. That's what we saw after some decline for some time in oil prices today. Oil stocks, oil prices themselves rising. And the cost, frankly, of stimulus packages also rising today. Peter, thank you.
The president wants a package that could cost as much as $75 billion. Tim O'Brien now takes a look at some of the proposals on how to spend that money.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT: While lawmakers still have a long way to go to complete their stimulus package, leaders of the House and Senate budget committees today announced bipartisanship agreement on both size, around $60 billion, and timing.
SENATOR KENT CONRAD, BUDGET CHAIRMAN: Congress should assemble an economic stimulus package aiming for passage within three to four weeks. Rapid impact. A substantial portion of the fiscal impact on the economy should be felt within six months.
O'BRIEN: And they agreed should be broad-based rather than industry specific. So far, there seems to be little progress over what percentage of the package should involve new spending or new tax cuts, or what specifically should be in the package.
SENATOR TRENT LOTT, MINORITY LEADER: People are lining up all the way down the Mall, saying, "Do this and do that. Help me do that or the other."
O'BRIEN: Democrats want immediate help, unemployment compensation and health care for those hardest hit by the terrorism, particularly in the aviation industry.
Senate Majority Leader Tom Daschle see a crack in the spirit of bipartisanship.
SENATOR TOM DASCHLE, MAJORITY LEADER: I'm disappointed, obviously, that our Republican colleagues have chosen what has been clearly an obstructionist approach, here. That's their choice.
O'BRIEN: Daschle, however, praised President Bush who acted on his own to help displaced workers and who has been receptive to many Democratic proposals.
(END VIDEOTAPE)
O'BRIEN: Whatever stimulus package lawmakers settle on, it is all but certain to wipe out the surplus and return the government to deficit spending. But there is a concerted effort to make the stimulus short term. As Senator Lott put it today, "We shall not loose the dogs of deficit spending. Responsible and limited government is not over." -- Lou.
DOBBS: So long as they have their way. Tim, thanks. Tim O'Brien in Washington.
One senator who is of course playing a key role in deciding the shape and the scale of any economic stimulus package is Senator Max Baucus. Mr. Baucus has been in closed-door meetings this week with ranking finance members and Congressional leadership. He serves as the chairman of the Senate finance committee. Joining us now from the gallery. Good to have you with us, Senator.
SENATOR MAX BAUCUS: Thank you, Lou.
DOBBS: The size of the package. The has made it pretty clear that he is looking to the Democratic leadership in the Senate in particular for some guidance, some direction here. What is your best judgment about the size of this package?
BAUCUS: I just met just recently -- a few minutes ago, actually --with Secretary O'Niell and with the top tax writers for both the House and the Senate, those committees.
There is general agreement that probably a stimulus in the nature of 60, 65 billion dollars in addition to what's already been appropriated makes the most sense. I think there's a general feeling about that.
DOBBS: We've just heard Senator Lott talk about the fact that everybody is lining up with their hands out, if you will. In some cases, perhaps a more elegant expression is appropriate for those more appropriately needful of that money. But the fact is, you have a number of constituencies who are going to be appealing for part of the money. Which constituencies, if you will, are first priority?
BAUCUS: There's a strong feeling among those of us putting this together that this stimulus should be immediate. It should be temporary. It should hit the bulls-eye. It should not include peripheral, extraneous matters. It should not include pork. We can have a better result if we stick to what we're charged with doing, and I think we will inspire a little bit of American confidence if we don't add a lot of pork on. I think that that trend will continue, at least that's my hope, that we get the job done but not add these extra additionals that just aren't necessary.
DOBBS: We just heard the leader be rather critical of Republicans. Do you feel the same way in the discussions that are going on right now?
BAUCUS: I'm very heartened with the very strong bipartisan spirit in our meetings. I give great credit to president. The president has resisted many partisan entreaties by some members from his party. He has basically decided we're going do what's right, here. This is a crisis and we're going to work with the Congress, Republicans and Democrats both. That is very much the spirit of our meetings. I don't share in ant criticism at all. I'm frankly heartened by just how well we're working together.
DOBBS: How soon do you believe in that spirit of bipartisanship and urgency you will have a bill through for the president's signature?
BAUCUS: I think it will take a couple, three weeks. In that neighborhood. That's what we're shooting for. I think that's our best guess. The main point I want to make is, I've never seen a spirit like this before since the years I've been in Congress.
At one meeting there was Mr. Rangel, myself, Mr. Thomas, Mr. Grassley with Secretary O'Neill. It's the first time in memory that all four of us have met together in a good, kind of solid way. I must add, too, that the budget committees got together and agreed on a single set of numbers. That's never happened before. There's a lot that's good, here. And we're all doing -- most of us -- what we can to maintain that spirit.
DOBBS: You have met, Senator, with Alan Greenspan, former Treasury Secretary Bob Rubin in closed-door meetings, and of course with Secretary O'Neill. How important have those meetings been to deciding the scale and the scope of the stimulus package?
BAUCUS: Those meetings are tremendously important. We pay a lot of attention to Chairman Greenspan and Robert Rubin, as well, clearly, with Secretary O'Neill. When they speak, we listen. In many of these closed- door sessions many senators refer to one or the other. Says, "As Chairman Greenspan says," or "As Bob Rubin says." They are very helpful.
DOBBS: Terrific. Senator Max Baucus, thanks for being with us.`
BAUCUS: Thank you.
DOBBS: Still ahead on MONEYLINE, the terrorist attacks on the United States curtailed the travel plans of many Americans and many people around the world. That has devastated many of the cities that rely on tourism. We'll tell you about efforts now to revive that industry. And with more people staying home, we'll tell you which industries are benefiting. Yes, benefiting. Then, of course, tracking terrorist money around the globe. Later on MONEYLINE we'll be talking with a money laundering expert who has some definite plans about how to shut down the underground money pipeline. All of that still ahead.
(COMMERCIAL BREAK)
DOBBS: We'll have the latest developments for you in America's new war in just minutes. First let's check in with Christine Romans over at the New York Stock Exchange, where the Dow Jones Industrials today fell 62 points -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, it was a choppy day highlighted by late-session selling, as you can see by the charts. Folks were not very encouraged by that isolated incident of anthrax in Florida. And there was a downbeat note to clients from Warren Buffett. It was dated September 26. It said, I'm sure we're in a recession, probably a deep and extended one, but they are part of business life and we are prepared.
The Dow down about just under one percent. More warnings as well. Corning, Marriott, Global Crossing, all moving here lower at least a dollar on warnings there. We are out of that situation where stocks are actually moving higher on warnings. Among the Dow losers, Alcoa. AA. It earned 39 cents in the third quarter, but investors were worried about business conditions for Q4. GM, Home Depot, Proctor and Gamble also lower here. And after the bell, yet another big tech company warning about its profits. Take a look at this. Down 90 percent over the past 52 weeks. Going to lose 14 to 17 cents on the quarter as demand slumps in the wake of that September 11th attack. Lou, $10,000 worth of Gateway shares purchased a year ago are worth just over $1,000 at the closing bell today.
DOBBS: All right, Christine. Thank you.
While Gateway is warning, Dell Computer reaffirming its targets and pushing the Nasdaq higher. Greg Clarkin at the Nasdaq Market Site with the store -- Greg.
GREG CLARKIN, NASDAQ MARKET SITE: Lou, the Nasdaq faring a little better than Dow. It was up about 16 points or so. If you take a look at the chart for the day it had a real nice pop in the morning. It was up about 61 points. And they sold off in the afternoon with the broader markets. Dell really was the catalyst. It becomes the second tech heavy weight in as many days to come out and reaffirm guidance for the present quarter, saying it will, indeed, meet its financial targets.
Dell really leading the way for the tech stocks. It was up $1.68. That's good for a better than eight percent jump. Other hardware stocks gained as well. Sun Microsystems, Apple Computer also posting gains. Software: Oracle and Microsoft up a small amount. And the we have Brocade, the storage stock, getting a nice day on the upgrade out of Dain Rauscher Wessels. So at this point, Lou, the Nasdaq has risen three days in a row. It is up 15 percent off the recent session, lows that were hit two weeks ago or so but could not get over 1,600 today at the close, finishes a couple points shy of that.
DOBBS: Leaving something to be done tomorrow. All right, Greg. Greg Clarkin. That good news from Dell Computer taking many investors by surprise. Some analysts had expected the company to lower guidance. Bruce Francis now with the story -- Bruce.
BRUCE FRANCIS, CNN CORRESPONDENT: That billion dollar shortfall from Compaq sure set the stage for some bad news. We didn't get it, though, today from Dell. Dell says that while U.S. corporate demand is weak, international and consumer sales stayed on track. So the company is sticking with guidance delivered late in August.
Dell says that the quarter was actually running ahead of plan before the attacks on September 11th. Then a sharp drop-off was followed by what the company calls a surprisingly fast pickup in demand. The company won't forecast beyond the end of the current quarter, but Vice Chairman and President Kevin Rollins says that the release of Windows XP in late October could help a bit.
(BEGIN VIDEO CLIP) KEVIN ROLLINS, VICE CHAIRMAN AND PRESIDENT, COMPAQ: We do think there is going to be an uptick on demand due to consumer acceptance of both XP combined with Pentium 4. So we're fairly positive about the benefits. I think we're in a more subdued market in general, but I think there is going to be a uptick due to those two products coming together.
(END VIDEO CLIP)
FRANCIS: But Dell gets no more than 10 percent of its sales from U.S. consumers, and the company noted in its call that while corporate demand will pick up, it probably won't be until the first quarter of 2002 that that begins to take off. So analysts like Dan Niles are bracing for more bad news in next quarter from Dell.
(BEGIN VIDEO CLIP)
DAN NILES, LEHMAN BROTHERS: I think that's what's people are missing here, is that they said that big IT managers were postponing big-ticket purchases until early next year. If you think about that, there's still a fair amount of time left to go. Also, that's the reason why they didn't give guidance for the fourth quarter, because things are still so far up in the air. I think that's what you need to do to try to put this into context.
(END VIDEO CLIP)
FRANCIS: And we'll get the details and the outlook from (UNINTELLIGIBLE) on November 15th. Lou.
DOBBS: November 15. 10 percent of sales are U.S.?
FRANCIS: 10 percent of their overall sales. Less than 10 percent come from U.S. consumers.
DOBBS: OK. Just wanted to make sure I understood that one correctly.
FRANCIS: That's my job.
DOBBS: Bruce, thanks a lot for doing your job. Bruce Francis. Still ahead here on MONEYLINE, in the wake of the September 11th attacks, more of us are staying home. It's called the "cocoon effect," and it is having a very big impact on the economy. We'll tell you which companies stand to benefit from it. And as people drop their travel plans, many areas that rely on tourism are suffering. We'll tell you what people are doing trying to put folks back on the road and in the air. And tonight, tracking the terrorist money trail. We'll have an inside look at some of the challenges investigators face. We'll be joined by money laundering expert Nikos Passas. That's ahead on MONEYLINE. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The terrorist attacks on the United States have left some Americans choosing to spend their free time at home instead of going out to restaurants or movies. The result, to a degree, is called the "cocooning effect." Allan Chernoff reports on the effect it is having on business.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRESPONDENT: On the afternoon of September 11th, Blockbuster Video saw a surge in business across the nation. Since the deadly attacks, some Americans have been avoiding public places, staying home instead, sometimes simply watching movies.
UNIDENTIFIED FEMALE: Just really watching more television and actually renting videos, which I've never had a habit of in the past.
UNIDENTIFIED FEMALE: Since this has happened, I'm worried about what's happening. I'm just very dubious and I wouldn't go out on my own.
CHERNOFF: Companies that cater to at-home activities stand to benefit if the cocooning of America becomes a lasting trend. Already, the number two video chain, Hollywood Entertainment, is telling Wall Street this year's profits should be better than previously forecast. And stocks of video rental companies have become overnight stars.
Blockbuster is up 31 percent since the attacks. Hollywood Entertainment up 64 percent and the number three chain, Movie Gallery, is up 49 percent.`
Pizza parlors have also been seeing a pickup in demand.
DAVE MELTON, DOMINO'S PIZZA: People in an event like this spend more time at home watching television and may be reluctant to leave home. And Domino's pizza is able to fit their needs by delivering a meal to their home.
CHERNOFF: Domino's is privately owned, but publicly-traded Papa John's International has seen its stock rise 11 percent since September 11th. The company says sales in recent days have begun returning to normal levels.
(END VIDEOTAPE)
The cocooning effect may be short-lived. Here in New York City, Broadway theater attendance has been bouncing back every week since the attacks, although it remains about 10 percent below year-ago levels. Success in the war on terrorism is likely to determine how long the cocooning of America will last.
DOBBS: Allan, thank you. Allan Chernoff. As more people do stay home, cities like Las Vegas are ramping up ad campaigns trying to boost tourism. Casey Wian has the story.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT: This previously unreleased Frank Sinatra song is part of a new Las Vegas ad campaign, telling potential visitors it's OK to have fun again. After September 11th, Las Vegas resorts were stuck with tens of thousands of empty rooms. Many laid off thousands of workers, and the already-troubled Aladdin filed for bankruptcy.
JASON ADER, BEAR STEARNS: It's very hard for a company to adjust immediately to such a huge decline in demand. I think they're doing the best they can, but it's been a painful process for the employees of Las Vegas.
WIAN: To ease the pain, Vegas resorts are slashing prices. National Airlines, partly owned by Las Vegas hotels, now offers round- trip airfare as low as $50 from the West Coast, to $190 from the east -- plus a free night in one of 15 top hotels. While National says the fares barely cover fuel costs, its planes are now more than 90 percent full.
MICHAEL CONWAY, PRESIDENT AND CEO, NATIONAL AIRLINES: Americans are just looking for any kind of an incentive to get back to the business that is America. And people are willing to fly, and I think we've demonstrated that.
WIAN: Las Vegas and Orlando both avoided being put on credit watch by Standard and Poors this week. Orlando got a boost from the president.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Go down to Disney World in Florida.
WIAN: But S&P did place Hawaii, the Washington, D.C. Convention Center and Anaheim, California on its list of potential debt downgrades. Disney's new California Adventure in Anaheim was struggling even before the terrorist attacks. Since it's lost two high profile restaurants. But Disney says overall theme park attendance is bad to near normal.
(on camera): While the tourism industry has had some success in bringing back visitors, there's still a long way to go. A study this week by Ernst & Young, for example, found that occupancy rates at California hotels have dropped to a 10-year low.
Casey Wian, CNN Financial News, Los Angeles.
(END VIDEOTAPE)
DOBBS: And coming up next, who funds terrorists and how will we shut off their money supply? We'll be talking with anti-terrorist expert Nikos Passas. And as the United States prepares for war, what effect will that of on the economy and the markets? We will find out the answers to those questions next.
ANNOUNCER: Next, Lou speaks with Chris Wolf, equity market strategist at J.P. Morgan Private Bank.
(COMMERCIAL BREAK)
DOBBS: We'll bring you the latest developments in America's war in just a moment. But first, a look at what happened on Wall Street today. A mid morning rally, pressure from consumer products and financial issues initially pressuring news from -- reassuring news, that news that is from Dell sent stock prices, but not enough to keep the blue chips higher at the close.
On the New York Exchange, 68 new 52-week highs, 48 new lows. On the Nasdaq, 47 new 52-week highs, while 80 new lows.
A volatile session for the Dow, down 63 points. Advancing issues beating decliners by a 3 to 2 margin however. Among the most actives, Global Crossing down nearly 50 percent. That after the company announced a new chief executive officer, its sixth in less than four years. Shares of EMC gaining 5 percent today. EMC trading more than 85 percent from its 52-week-high.
Tyco shares jumping $5.00 today. Tyco offering to buy the minority stake of Tyco it doesn't own.
The Nasdaq up 1 percent on the day, closing just below 1,600. Advancers beating declining issues by a 7 to 5 margin. Among the most active issues, Cisco Systems up for the second day in a row, up nearly 50 cents today. The networking company climbing 20 percent yesterday.
And one day after Cisco's positive comments, Dell Computer releasing its own, as we reported to you. Dell today up 8 percent. Siebel Systems up $1.20 a share. Siebel trading 85 percent below its 52-week high.
Well, not surprisingly, the day's leading sector, computer networking. That group up 20 percent over the past week. Also higher today, chip equipment makers, oil service stocks. On the down side today, automakers. GM, in fact, the biggest loser. Airline losses led by Continental. And Wal-Mart, leaving the retail sector lower.
The Dow reversing course late in the session.
Christine Romans joins us from the New York Stock Exchange -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Hi there, Lou. Well, the Dow Jones Industrial Average is still up about 1,000 points from the trough it hit back on September 21. And a lot of traders were saying that this market had become a little bit overbought. That's a word that they use that means the market had come too far, too fast and needed to blow off some steam. They point out, there were a lot of bargains out there, and that some of these stocks had come pretty far. Look at Home Depot. Since its close on 9/21, it's up 23 percent. GE, up 21 percent. AT&T, up more than 20 percent.
We've also go bargains in Citigroup, Wal-mart, Microsoft. Good gains there if you were an investor who bought during that very rough week of 9/17 here on Wall Street. Now the question is, was that just a trading balance? Could it be over? Or is this all part of building a base? Traders keep telling me, the interest still comes in these stocks that are big liquid household names, that investors know and trust. And they're taking very long-term views here. But for the short-term, you can see, some of those stocks have done very well -- Lou.
DOBBS: OK, Christine, thank you.
Well, a surge in shares of Dell Computer, as we said, boosting the Nasdaq today.
Greg Clarkin, Greg, what does it look like?
GREG CLARKIN, CNN CORRESPONDENT: Well, I tell you, Lou, at this point, traders point out that the psychology of the marketplace still extremely fragile. They say it does improve a little bit every day, at this point at least, but still can be easily derailed as we saw today's trading.
Well, a couple groups that really stood out today, we saw chips stocks, hardware, software, Internets, all posting substantial gains, as well the networking stocks you see there on your screen. Yesterday, Cisco saying it was on track to meet its financial targets, gave that whole group a boost.
Today, they continued with that rally. So as Christine was saying with those big name stocks over on the NYSE, you see the same effect here on the Nasdaq. Some of these big technology shares that have just been hammered attract a lot of folks when they get down to certain levels.
Cisco's been that like that. We've seen Intel bounced nicely recently. And then, of course, Dell today. Now what traders want to know, again, as some of those bounces, are they nothing more than trading rallies? Or is this something that can be a little more substantial than that and get carried on for the next couple days?
Gateway's preannouncement today, short impact to technology trading at least tomorrow. But at the moment, we're looking at the Nasdaq right now is just a couple points shy of 1,600. And it's up 15 percent from those session lows just about two weeks ago or so, Lou.
DOBBS: Greg, thank you very much. Greg Clarkin from the Nasdaq marketsite.
Well, now for the latest developments on America's war against terrorism. President Bush today pledging $320 million to help Afghan refugees. Defense Secretary Donald Rumsfeld moving on to Cairo in his four nation to solidify support for U.S. military action against the Taliban.
The attack on the World Trade Center will cost New York City $105 billion over the next two years, that according to the city's first official estimates. The FBI releasing new photographs of two of the hijackers taken from security cameras in Portland, Maine.
And a lethal hemmorhagic virus is reportedly affecting people along the border between Pakistan and Afghanistan. According to the U.K.'s "Daily Telegraph" newspaper, the virus is similar to Ebola virus. Ebola highly contagious virus. It causes patients to bleed to death. "The Telegraph" reporting at least 75 people have caught that disease. 8 have died so far.
The World Health Organization in Geneva tells us tonight that it has not been contacted about any outbreak in the region.
Well, the markets have put in a solid performance now for more than a week now, but Chris Wolfe tells me this pause is one before an earnings storm. Chris, equity markets strategist with J.P. Morgan. Good to have you with us, Chris.
CHRIS WOLFE, J.P. MORGAN: Thanks, Lou.
DOBBS: What do you mean, pause before a storm? That sounds ominous?
WOLFE: Oh, it does. And not to be too foreboding here, I think a few things are going on. We really look at the market in one clear message. You think about where we were before the attack, where are today.
We're in the same place. You know, we trouble fathoming that. You know, did risk go down in this environment? Did corporate earnings improve so much?
DOBBS: Right.
WOLFE: Is profitability going to be that much stronger next year? That kind of rhetoric kind of feeds our thought process about how do things look next year. It was interesting to hear we take a long-term view.
You know, GE up from $30 to $39 is a bit disconcerting, when next year revenues may be at risk, let alone earnings.
DOBBS: I'm trying evaluate whether it's more disconcerting to think about a $30 to $39 or from the $40s down to $30.
WOLFE: Yeah, that's one way too look at it. I would say the storm that's coming. And we've talked about this. There's been many analogies, the perfect storm. The waves that will hit you are really in the form of the earnings announcements, etcetera for companies in the next two, three weeks.
DOBBS: Greg Clarkin, as he's reporting from the Nasdaq, making reference to these prices being so low that people can simply not resist them. On a price basis, a price versus the price they remember from months ago. That's a dangerous trap for investors, is it not?
WOLFE: I would definitely agree with that. You know, our viewpoint is really one based on you know, discounted cash flows and kind of earnings multiples here, and how do they compare versus industries and in the absolute.
And I think our viewpoints are that we'll see corporate profit margins still be relatively weak into next year and that cash flows be weak. So there are some bargains out there, but the wholesale move here is really, we think, well, some of the trading viewpoints, it does looks overbought.
DOBBS: Is it overbought by small investors or institutions?
WOLFE: We have clearly seen what we think is institutional buying here. We've heard a few viewpoints. Number one is institutions being underweight risk assets. And of course, you've seen what happens. You've saw very risky stocks, technology, etcetera, moving very aggressively.
Siebel actually moving from $11 to $19 or so. And in that vein, we've also seen some hedge funds covering some of their shorts. So our viewpoint is that there's a lot of things going with a lack of sellers in this environment, trying to catch trading profits. It looks like it's a short-term effect.
DOBBS: And a short-term rally.
WOLFE: Yes.
DOBBS: The -- you have been looking for a recovery in the second quarter -- excuse me, the first quarter of next year.
WOLFE: Yes.
DOBBS: You said things have changed and that's one of the remarkable things about being at parity with where we were before September 11. Has your view of when things begin to look better changed?
WOLFE: I think what will get us more confident about that view plan, I think the risks to our view that a recovery happens in the first quarter are really that it gets pushed out in a second or third.
What we'll get is more confident is if we start to see stabilization and margins earlier than we expect, meaning by the fourth quarter of this year, helps us along that we want to get more warm towards equities in November and December. And we see were to show up, high frequency data like retail sales.
That happens, we'll get comfortable with the story that we see a pretty strong recovery somewhere in the first part of '02.
DOBBS: Comfortable with it. What should investor do here, because I suspect anyone listening to you thinks, well, one, this looks like stability and some recovery from September 11 will soon give way to a decline. Secondly, we won't see a recovery until the first quarter of 2002. I'll just hold my money back and hope for the best in the interim. Is that a fair assessment?
WOLFE: It is. And to that extent, we're providing advise to our clients along those lines. Protect what have here. And our clients are very concerned with their wealth levels and want to be available next year, have enough cash, enough power to try to play the game the first part of next year. DOBBS: Specifically, what should they do?
WOLFE: We're looking at high quality companies, earnings visibility, still playing a little bit of defense in this environment, protecting accounts. We do like stocks. There's no doubt about it. Companies like Cardinal Healthcare and even some value arguments like Valero Energy.
DOBBS: OK, Chris Wolfe, thanks for being with us.
WOLFE: Thank you.
DOBBS: Well, just ahead here on MONEYLINE, our next guest is an expert on money laundering expert. He will tell us what he believes is the way in which to unraveling the complex terrorist money trial. Stay with us.
ANNOUNCER: Next Temple University's professor of criminal justice Nikos Passas.
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DOBBS: Now we're focusing on the latest efforts to track down terrorist money, to seize it.
My next guest believes infiltrating some underground cash networks called hawalas could take years and be counterproductive. Nikos Passas is a professor of criminal justice at Temple University. Good to have you with us, Nikos.
NIKOS PASSAS, PROFESSOR, TEMLE UNIVERSITY: Thank you.
DOBBS: The hawalas. Much has been made of them recently. Some $2 to 3 billion apparently exchanged just out of Pakistan alone through the use of hawala. How large is this underground money apparatus worldwide?
PASSAS: Well, nobody really knows. A lot of people may have opinions, but nobody really knows because agencies around the world have not concentrated their attention, have not focused attention on that problem so far.
They're -- all we have, in other words, is just a few cases that tell us that in some instances, those operate for a few thousand dollars. Others have hundreds of millions of dollars. So yes, substantial amounts of money go through that. But bear in mind that most of that money is actually legitimate.
DOBBS: Very legitimate and also at the same time, illegitimate, almost impossible for the authorities to track.
PASSAS: Well, unlike what many people believe, there are trails. A lot of people think that there is absolutely no record that people who operate those networks keep for themselves. In fact they do.
And another misconception is that there is no contact with legitimate financial or other institutions. There often is. We simply do not know. And before we take action, and before we perhaps bring about effects that we would come to regret, we would have to get the facts right. That's the first priority right now.
DOBBS: What is your best judgment? We call them the hawallas in the case of the Muslim world. For example, in Pakistan or Afghanistan.
The Chinese also have these syndicates of trust and money transfer around the world as do other countries. What should the United States be doing in following and understanding and seizing money where it's identified as supportive of terrorism?
PASSAS: Well, the first thing to understand is that hawala is one of several types of informal value transfer systems around the world. There's have -- there is hundi (ph) in Pakistan.
DOBBS: Right.
PASSAS: There is fei chin (ph) elsewhere And it's very, very widespread. What we need to do is understand how these things work. What you have to understand is that these things originated many, many decades ago, perhaps centuries ago, for very legitimate purposes. They operate in parts of the world where there are no banks.
DOBBS: I understand that there may be legitimate purpose. And they do take the place of institutions in some places. But confronted as we are with what we must now do, and that is understand the money supply inflows that support terrorists, what can we do here?
PASSAS: The first thing we have to do is not act in haste. First of all, we have to understand something and rather than act insensitively and rush, we have to understand how these things operate.
This may take some patients. This make take some time. Attempting to regulate or shut down those things is not going to help us for a number of reasons.
First of all, if I'm a terrorist, I'm simply going to switch to a different method to move about a few thousand dollars that it takes to mount an operation like the one on September 11. But more importantly, there are possible negative effects that we can have.
Families depend on those things. Legitimate economic activities would be disrupted. Insensitive actions are going to fuel passions against the United States...
DOBBS: Right.
PASSAS: ...or the Western world in parts of the world that we want to rally behind us.
DOBBS: Right.
PASSAS: And therefore, there are possible counterproductive consequences that we have to measure carefully before we do anything.
DOBBS: Nikos, sound council. And we thank you for being with us. Nikos, Passas,
PASSAS: My pleasure.
DOBBS: Coming up here on MONEYLINE, yet another blow to Bridgestone/Firestone. We'll be talking about federal regulators who have found fault with more of the company's tires. We'll have that story for you next here on MONEYLINE.
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DOBBS: In tonight's MONEYLINE movers, shares of Corning down 15 percent, warning it will miss third quarter estimates. Corning also announcing 4,000 job cuts, saying it will post a loss in the fourth quarter.
Juniper Networks up 10 percent, following a more than $2 run-up yesterday. Morgan Stanley upgrading the stock, sending shares higher. And shares of Nextel Communications up 25 percent today. Nextel saying upgrades to its mobile communications network will double capacity. Nextel currently trading about 80 percent below its 52-week high.
In other corporate news tonight, another big tire recall for Bridgestone/Firestone. Federal regulators requesting that recall of 3.5 million Wilderness A.T. tires, after completing an investigation that began in May of last year.
Barr Laboratories raising its earnings forecast. The news comes after Eli Lilly warned it will miss quarterly estimates, blaming falling sales of Prozac after its patent on Prozac expired.
Yet another airline announcing layoff. KLM Royal Dutch Airlines cutting 2,500 jobs. KLM also says it's in talks with employees for substantial salaries cuts. The Dutch airline attributing the hardships to fallout from the September 11 terrorist attacks.
"WOLF BLITZER REPORTS" begins in just a few minutes here on CNN. Let's go to Wolf now in Washington for a preview -- Wolf.
WOLF BLITZER, HOST, "WOLF BLITZER REPORTS": Thank you very much, Lou. Up next, Defense Secretary Donald Rumsfeld continues his mission to prepare for possible military strikes. We'll get the latest from our military affairs correspondent, Jamie McIntyre. And as the manhunt for Osama bin Laden continues, I'll talk live with Mark Bowden, the author of "Blackhawk Down," the story of the disastrous manhunt for a Somali warlord exactly eight years ago today. What are the lessons learned? That and the days other developments next -- Lou.
DOBBS: Looking forward to it, Wolf. Thank you.
Coming up next here on MONEYLINE, interest rates are down. The Fed has cut rates in fact by 60 percent? But what's going on with those credit card rates? We'll tell you next. Your e-mails and "Ahead of the Curve," coming right up.
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DOBBS: Tomorrow, the Labor Department will report the first look at monthly employment since the terrorist attacks. Although government officials say these figures will show only a limited impact from those attacks because of the way they are constructed.
Economists, nonetheless, are expecting the unemployment rate to climb to 5.0 percent or higher for the month of September.
Also out tomorrow, we'll have the consumer credit report from the month of August. Economists expecting a decline for the fourth consecutive month. And please be sure to join us here on MONEYLINE tomorrow night. Peter Bart, the editor-in-chief of "Variety" joins us, as does Daniel Yergin of Cambridge Energy, one of the world's foremost experts on energy. And economist Bruce Steinburg of Merrill Lynch will be here, to discuss recovery and of course, economic stimulus plans and markets. All of that tomorrow night.
Time now for a look of some of your thoughts. Regular MONEYLINE viewer, Susan Davis of Talent, Oregon writes in to ask, "Just who's benefiting from these lower interest rates? My Visa interest rate hasn't dropped one iota. Why not?"
Gary Dowdy on the very same subject writing, "Want to spur the economy? Ask those credit companies to drop their interest rates." When it comes to credit rates, by the way we should tell you, what goes up doesn't necessarily come back down apparently. Credit card interest rates have fallen, but many of you say they haven't been falling nearly enough.
And here is why. At the beginning of the year, the average credit card rate has plummeted from 15.5 percent all the way down to 14.3 percent. That's a drop of only 6 percent, in the same period that the Federal Reserve has cut interest rates by 60 percent.
The prime rate in that period has fallen 40 percent. Well, bankrate.com tells us about some of the best credit card deals in the country. Take a look at those deals.
Wachovia Bank Card Services, it offers a Mastercard with a variable rate of just 6 percent. That's less than half the national average. Chase Manhattan Bank has a Mastercard with a variable rate of 8.15 percent.
And you can get a Visa card from Capital One with a fixed rate of 9.5 percent. Now those are just standard cards. If you get gold or platinum cards, you will have even better interest rates.
And by the way, according to the American Bankers Association, on average, credit cards represent 5 percent of a bank's profits. Of course, some banks make a lot less on them. And some a great deal more.
Thanks for writing in to tell us what's on your mind. Send us your e-mails at moneyline@cnn.com.
For this Thursday evening, that is MONEYLINE. We thank you for being with us. I'm Lou Dobbs. Goodnight from New York. "WOLF BLITZER REPORTS" begins right now.
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