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Lou Dobbs Moneyline
Third Broadcast Network Becomes Target of Anthrax Scare; Stocks Pressured by Weak Corporate Results
Aired October 18, 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.
The number of confirmed cases of anthrax is growing and a third broadcast network has become a target.
The U.S. war machine marching forward in the hunt for terrorists in Afghanistan.
And back in this country, four convicted terrorists, today, sentenced to life in prison.
And, for the first time in our nation's history, a health scare has shut down the House of Representatives, but a defiant Senate remains open for business.
On Wall Street today, stocks pressured by weak corporate results and widening anthrax concerns, as the Dow ends lower for the second day in row.
Joining me tonight: Senator Bill Frist, the only doctor in the Senate, who said today, "We're in business"; also, General David Grange on the latest bombing against the Taliban and al Qaeda in Afghanistan; and Jack Wheeler from the Freedom Research Foundation on why the war against terrorism shouldn't end with Afghanistan.
But first, the very latest in the anthrax investigation: An assistant to CBS news anchor Dan Rather tests positive for anthrax today. Rather called the young woman "heroic," saying she has not missed one day of work.
A postal worker in Hamilton Township, New Jersey tests positive for anthrax. Acting Governor Donald DiFrancesco says another employee may also test positive. The Hamilton Processing Center handles most of the mail that goes to Trenton. Letters sent to Tom Brokaw and Senator Tom Daschle bore Trenton postmarks.
The House of Representatives stands empty as investigators comb offices and hallways for any traces of anthrax. And a downsized Senate today remained open for business. Meetings took place in cramped offices and the Senate voted for a military construction bill.
And all passengers on a Northwest Airlines flight that landed in Burlington on Monday have been told to take antibiotics after a powdery substance was found on the aircraft. Initial tests indicate a bacteria-type substance similar, at least, to anthrax.
Senior law enforcement officials tell CNN that anthrax found in New York, Washington and Florida came from the same source.
For more now on the anthrax investigation -- Eileen O'Connor in Washington -- Eileen.
EILEEN O'CONNOR, CNN NATIONAL CORRESPONDENT: Well, Lou, they say that that is a promising lead.
Investigators also say that releasing those letters to Senate Majority Leader Tom Daschle and to NBC anchor Tom Brokaw led to numerous new leads. They're also conducting fingerprint DNA and handwriting analysis. In addition, they are continuing to compare the samples found in each location: Washington, New York and Florida. And they are finding similarities.
Now, sources say government experts say the use of the block letters was a smart move on those letters. They say they are the hardest to analyze. Still, officials refuse to say which information is giving them the most promising leads.
(BEGIN VIDEO CLIP)
ROBERT MUELLER, FBI DIRECTOR: I can't get into whether lead A is better than lead B. I can't tell you that.
From each of the incidences -- areas where there has been anthrax exposure, Florida, and New York and D.C., the samples of -- relating to the spores, to the anthrax exposure, are being analyzed by a variety of laboratories to determine likeness and determine whether or not there is a solar single source of each of those attacks.
(END VIDEO CLIP)
O'CONNOR: To increase their chances, they are appealing to the public, announcing a $1 million reward. And the FBI is going to take to the airwaves on "America's Most Wanted", like they did with the profiles of the 22 on the most wanted terrorist list, which they say led to 1,600 leads.
The attorney general said it's possible some of the hoax letters were connected to the real thing, accomplishing the same goal: terrorizing the population and stretching law enforcement's resources. But, again, the attorney general says that they do not have any definitive suspects.
(BEGIN VIDEO CLIP)
JOHN ASHCROFT, ATTORNEY GENERAL: We have ruled out neither international terrorism nor domestic terrorism. And we think it may be ill-advised to think about the situation in terms of an either/or matrix.
(END VIDEO CLIP)
O'CONNOR: Bottom line, Lou, as one senior law enforcement put it today, "We need a break" -- Lou.
DOBBS: OK, Eileen, thank you very much -- Eileen O'Connor.
Later here, Senator Bill Frist, the only medical doctor serving in the Senate, he will be here to give his perspective and analysis of the anthrax investigation.
Now for the latest in the war against terrorism: The Pentagon saying forces fighting the Taliban are getting help from the air and ground in the form of munitions and food supplies. The Pentagon also showing some targets that were struck yesterday.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This facility consists of buildings, training and firing ranges, vehicle maintenance and storage for central Taliban corps. As you can see, the weapon hits the center of the headquarters building.
(END VIDEO CLIP)
DOBBS: This evening, heavy bombing is reported in Kandahar, a workplace used by CNN, among the places hit -- no one was injured -- the building, however, severely damaged.
In the United States, three men sentenced to life in prison for their roles in the bombing of U.S. embassies in Tanzania and Kenya in 1998 -- they and a fourth man sentenced to life in prison for taking part in a wider plot to kill Americans and to destroy U.S. property worldwide.
Vice President Dick Cheney touring the wreckage of the World Trade Center today -- it is the first time that both the vice president and president have been out of Washington at the same time since those attacks more than five weeks ago.
For more now on the campaign in Afghanistan, we're joined by John Vause from Islamabad, Pakistan -- John.
JOHN VAUSE, CNN CORRESPONDENT: Well, Lou, as you mentioned earlier on, an attack on the CNN -- or outside the CNN office in Kandahar. That was part of a fairly intensive strike on the city a few hours ago. What we're being told by our staff in that city: Twenty loud explosions struck a few hours ago.
The offices -- the windows to the offices were blown out, walls collapsed, the staff fled. They took shelter in a trench outside. What they're telling us is that a vehicle, which was passing outside the office at the time, was struck -- assuming that's a military vehicle, but have no confirmation on that. We assume it's a military vehicle because there is, in fact, a nighttime curfew in place in Kandahar.
Also being hit tonight: the city of Jalalabad -- what we're being told is that the television station and a suspected terrorist training camp were the targets of the U.S. air strikes -- and, also, nighttime strikes on the city of Kabul.
Earlier, the city of Kabul was hit by U.S. air strikes and the Arabic television network, Al Jazeera, was allowed to take some pictures of the aftermath of that attack. What they're saying is that a residential area was hit by a U.S. bomb or missile. That area which was hit is near the old presidential palace, they call it the Arg. It's also part of the government compound where the Taliban has its defense ministry.
Also in Kabul, attacks on the airport, in the garrison -- an army garrison as well was allegedly, apparently hit. Two houses were destroyed near a Taliban tank unit. Also in Kabul, an ammunition dump was hit. And we're being told by Taliban officials that seven passersby were killed, but we cannot get confirmation on that strike.
The other news tonight, the aid agencies are reporting that their warehouses in Afghanistan are being raided by what appear to be armed militia, possibly Taliban. They're not too sure. The World Food Program says that their warehouses were looted, so, too, the medical organization Doctors Without Borders -- Lou.
DOBBS: John, very quickly, any further movement to report along the Pakistan-Indian border tonight?
VAUSE: Well, what we're getting from the Pakistani side of things -- not much. All very, very quiet as far as that's concerned. It's still a very tense situation, as it usually is with the Kashmir situation between these two countries -- Pakistan still on a high alert. They've got yet to step down from that, but essentially a fairly calm but tense situation after the secretary of state's visit to both countries over the last couple of days.
DOBBS: OK, John Vause from Islamabad, thank you.
Another busy day on the military front as we've just heard. To help us understand these latest developments, we turn to CNN military analyst General David Grange from Chicago.
General, good to have you with us.
GENERAL DAVID GRANGE, CNN MILITARY ANALYST: Good evening, Lou.
DOBBS: Some conflicting information about the role of the U.S. military, at this point, in support of the Northern Alliance -- working against the Taliban and the al Qaeda.
What is your best sense of what is going on now?
GRANGE: Well, I believe we're still building alliances with the Northern Alliance and the other tribal units that are against the Taliban -- a very sensitive situation, obviously, but we're going to need that support in order to get self rule in this country of some type of coalition between the tribal chiefs at the end of the operation. We have to look at what's going to happen next once the Taliban, that supports al Qaeda, is destroyed. DOBBS: That coalition is, by some accounts, tenuous because of the ethnic diversity of Afghanistan itself. But in order to carry out the military mission here, which is to destroy the Taliban -- supporting terrorists -- and the al Qaeda organization -- is it truly necessary to achieve our ends?
GRANGE: Absolutely.
And there's five types of coalition alliances that are required. One is with the Northern Alliance tribe, some type of an alliance there, some unity of effort to beat the Taliban. The other is the alliances on the border countries, in order to give us basing rights, whether it be for humanitarian assistance or combat operations.
The other is alliances of countries that just give us over flight. Then we have the alliances or coalition with the international -- the allies that are doing the combat operations with us. And then, of course, we have the alliances to get moral support, like from Islamic nations. That's also required.
DOBBS: Your assessment of how strong and firmly held those coalitions are at this point.
GRANGE: I believe they are very fragile. I believe, if you notice, the secretary of state and the secretary of defense, as well as others involved, are keeping those together. And they're very fragile, but required.
DOBBS: And, at this stage, what is your best judgment as to the success of the operation? We are, it seems to me, hearing a great deal from the Taliban, whether they be sources of the some of the reports from CNN or other news organizations. There seems very little in the way of true assessment in the effectiveness of the campaign so far.
GRANGE: Yes, measures of effectiveness are extremely hard to measure in a situation like this. You noticed the one thing you had on earlier about the Taliban or some types of organization raiding the food stores. I think they're desperate, not maybe so much for food for the military, but to give out food to win the hearts and minds themselves, because of the efforts that the coalition is doing.
DOBBS: OK, General, good to have you with us. Thank you.
GRANGE: Thank you.
DOBBS: General David Grange.
Well, coming up next here: President Bush is in China tonight. He aims to make a valuable new friend just months after butting heads with President Jiang Zemin over a downed U.S. spy plane.
Anthrax, well, it is receiving all of the public attention, but there are many more deadly and expensive bugs to worry about. We'll take a look at them and have a report for you. We'll also tell you about a rare case of cooperation to ensure we have enough drugs to fight anthrax.
And when we come back, I'll be joined by a key player in the fight against anthrax: the U.S. Senate's only medical doctor.
ANNOUNCER: Coming up: Lou is joined by Senator Bill Frist of Tennessee.
(COMMERCIAL BREAK)
DOBBS: The cost of dealing with the anthrax scare is rising: the government planning to spend hundreds of millions of dollars to increase the stockpiles of Cipro and antibiotics. Yet other bacteria are far more lethal and expensive.
Kitty Pilgrim puts anthrax in perspective with a look at the numbers.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The numbers are staggering: Infectious diseases claim 100,000 American lives each year. The pharmaceutical industry is spending $4 billion this year on researching drugs for infectious diseases.
Some of these diseases are extraordinarily lethal, but, unfortunately, fairly common; 500,000 patients in American hospitals get staph infections each year; 90,000 die. The bacteria that causes pneumonia and meningitis hits 10,000 infants and toddlers each year. And 5,000 die. More than 95 percent of Americans get chicken pox; 5,000 to 9,000 are hospitalized. And about 100 die. Hepatitis B kills 6,000 people a year. Even a simple flu hits 35-50 million Americans a year. And more than 20,000 die.
The cost of these diseases in lives is enormous. The financial cost is also staggering. The financial toll of a severe flu season is estimated at $12 billion in medical costs and lost productivity -- the annual cost of treating ear infections: $3-$4 billion. Sexually transmitted other than HIV and AIDS cost $10 billion -- $17 billion if HIV infections are included.
(END VIDEOTAPE)
PILGRIM: One of the biggest challenges to the pharmaceutical industry is, some strains of bacteria mutate to become drug-resistant. So a drug that works one year may be less effective the next.
Now, the big conference to talk about new antibiotics and anti- virus medications had been scheduled just before September 11. That conference had to be canceled and is not slated until December. A whole new agenda may be in order -- Lou.
DOBBS: I think almost certainly.
Kitty, thank you -- Kitty Pilgrim.
Well, each day brings, it seems, another confirmed anthrax incident and more fear and anxiety among some parts of the public. With the discovery of anthrax spores in a Senate office, we're now joined by Senator Bill Frist, Republican of Tennessee, and a medical doctor.
Senator, good to have you with us.
SEN. BILL FRIST (R), TENNESSEE: Good to be with you, Lou.
DOBBS: Senator, this anthrax -- I know you are amongst those who are working very hard to keep the public informed and, at the same time, calm. But we have a lot of anxiety here. Is it appropriately placed?
FRIST: Well, we have things to worry about and things we should not worry about. From the public health standpoint, from the individual out there who considers himself at risk, there's nothing to worry about. Things are going to be OK. The piece on antibiotics you just did, this anthrax is sensitive to every antibiotic: penicillin, tetracycline, doxycycline, the fluoroquinolones, as well as Cipro, the drug that you hear about today.
The risk of being exposed is tiny. Yet we know that we're in a different world now. This whole potential for terrorism means we open our mail, we have to think of things a little bit differently today. If you're exposed to anthrax -- exposed to it -- it is treatable. You will be cured. You have nothing to worry about. But it does need to be diagnosed early in terms of that exposure.
DOBBS: Your colleague in the Senate, Senator John McCain, said it's time for everybody just to calm down.
At this point, we are seeing, with nearly every passing day, a new incident of exposure -- and I want to underline that -- exposure to anthrax, and a press conference called, whether it be by a broadcast network, another media outlet, whether it be by a governor or a mayor. Is this being helpful, in your judgment, in terms of both the public security and public health, or is it being just a bit overdone?
FRIST: Well, Lou, this is new.
Never before has the United States of America had a bioweapon, a terrorist activity -- not necessarily the September 11 terrorists -- but terrorist activity using germs and bacteria. It's the first time in the history of this country. So you're going to see a lot of interest. And that's appropriate. We need the translate that down to support of our public health infrastructure to make sure that not just anthrax, but we can diagnose smallpox, tularemia, pneumonic plague, botulinum toxins, all of the other germs and bacteria that could be used.
And that's why I argue again and again, yes, we need more antibiotics, and, yes, we need more stockpiling, and, yes, we need more vaccines. But we also need to support our state and local preparedness, just like here in Washington we're having to address. DOBBS: Well, your bill that you are sponsoring calling for $1.4 billion in assistance in that direction puts some $600 million, as I recall, forward for precisely that: state and local government in the public health arena. Is that correct?
FRIST: That's correct. We passed a bill that I worked on with Senator Kennedy called the Public Health Threats and Emergency Act. We passed it about a year ago, long before September the 11th. We estimated it would take about $1.4 billion to appropriately fill in the gaps in terms of prevention, in terms of preparedness and in terms of response.
Now, part of that is stockpiling. Part of it is research and development so that we can figure out what drugs can treat things like a smallpox. And part of it is being prepared at the local level, what is called surge capacity, a little bit of what we're seeing today here in Washington, D.C., to make sure that we are prepared in terms of the number of tests, that we have the laboratories that can do those tests appropriately, and that we have people trained like myself, who is a physician, who can recognize things like anthrax and other infectious diseases.
DOBBS: What are the issues here in terms of informing the public and doing so responsibly and presumably calmly, is to look at the leadership, I don't know if we have this, I'd ask for it, we have a copy of the headline, Senator -- I don't know if you can see this -- if we can show that, "The New York Post" this morning showing Congressman Hastert and Congressman Gephardt and beneath it "Wimps."
And Senator, you all decided to stay open for business. Did the House send the wrong message in your judgment?
FRIST: I think we have to be careful and everybody is trying to play the Senate off against the House. Again, we're addressing something, this government of the United States of America, that we have not seen before. That is the use of germs and bacteria with the intent to kill, to kill people of the news media, to kill politicians today.
We have to make decisions every day based on the information that's available. What the American people don't understand entirely yet and the media haven't helped with very much, is that unlike the usual crime scene, let's say a murder, where the event is over with, this continues to change.
We go in, we look at an area where the anthrax exposure was. We plant cultures. Those cultures take 24 hours, 48 hours, 48 hours. You have to collect that data and make decisions at different points in time. So I'm not going to be critical of the house. In the Senate we were in session today. We got a lot of good business done at zero risk to the United States Senate. At the same time we were able to get those important surveillance cultures.
DOBBS: Senator, I didn't really expect that you would be, but I was curious about your thoughts on the role of leadership here particularly in this public health threat. Senator, at this point, anthrax, do you believe that we have the public health apparatus working as it should both at the local, the state and federal level, with this particular threat? I don't even -- Senator I won't even anticipate others. You raised a number of other diseases but I don't even want the move into the area of the hypothetical, this seems to be adequate now. Are we in pretty good shape?
FRIST: Lou, it's an important question to at least consider the others. If you don't, you can invest all the attention of the United States of America and all the money in just combating anthrax. A good terrorist simply moves down the list.
So where we need to be putting the money today is in support of the infrastructure no that matter what the organism is, we can diagnose it early, we can communicate that diagnosis, we can treat it, we can cure the disease. That is where I think we need to put the resources, but to answer your question, I'm here in Washington as you know. I've spent the last 12 hours fighting this anthrax issue. Things are going beautifully.
Our public health infrastructure is working, the Doctors are working hand in hand with law enforcement. It is almost like a symphony. Nobody is going to be hurt here in Washington, D.C. It's under control. It's been contained. People can relax. Things are going to be OK.
DOBBS: Senator, I'm going to follow your lead and I am going to move to the other diseases, specifically, you mentioned smallpox and a number of others. Is it your judgment that we are either prepared or approaching a state of preparation quickly to deal with those other potential threats?
FRIST: Smallpox, unlike anthrax, is contagious. And therefore I would regard it as a greater threat, that is, our vulnerability as a nation is higher but I would say the risk of it happening is lower than anthrax. Anthrax is available all over the United States of America. Smallpox, to the best of our knowledge has been eradicated from the world. There is no smallpox disease. There is a supply here under guard in the United States and also one in Russia. But for all practical purposes that is not in anybody's hands.
If smallpox were to be introduced today, the vaccination you received as a child is no good. The one I received is no good. I lasts anywhere from eight to 15 years. Therefore nobody has the vaccination defenses in place today. Are we prepared? Yes, we are. Could we be better prepared? Yes. That's why the president has said we're going to increase the vaccine doses available from 10 million to 20 million within about 9 months and we will probably increase that stockpile based on the request he made yesterday on up to 40, 50 or 60 million.
DOBBS: Senator, you have my attention so my next question, if I may, is, can we speed that up just a little bit?
FRIST: Well, we sped it up. Under President Bush's initiative we have 10 million doses that can be taken anywhere in the world to a site within 12 hours. That's pretty good, the fact that we can do that sort of initiation.
It's going to be -- initially, up until about a month ago, we said let's take it from 10 to 40 over 4 years. Under the direction of the president of the United States, he said no, that's insufficient. Let's do it as fast as we can and now it is going to be over 8 months. Now we are having the discussion how much do you really need?
Let's get together. If you introduce small pox, do you need 15 million, or 20 or 10? That's the discussions we're having today. Nobody has answered that question. Because we're at greater risk today, based on what has happened it Washington and Florida, people say well, I don't know what you say the risk is, but I want to get as many vaccines out there if we need it. So we are probably going to get a lot more than the 40 that we have in line right now.
DOBBS: Senator, thank you very much. Senator Bill Frist, as always, we appreciate your insight.
FRIST: Thank you, Lou.
DOBBS: Coming up next here, book-sellers slumping after the terrorist attacks. Sales now slowly beginning to build, but the subject matter has changed. We will be telling you all about that.
Secretary of State Colin Powell has led an advance team to an economic summit in China. The subject matter however, it is also shifting and we'll take a look at the support the United States is seeking in the war on terrorism, coming up next.
First Let's take a quick look at what happened on Wall Street today. Blue-chips fell slightly. The Nasdaq posting a modest gain. Let's turn to Christine Romans at the New York Stock Exchange to bring us up to date -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, they are calling it anthrax distraction and earning worries as well. But the Street moving lower here today, at least for the blue-chips. Let's take a look at some of the most actively traded issues here in Wall Street today. Sprint PCS down sharply here even as it plans to add 1.3 million subscribers in Q4.
Washington Mutual, all kinds of analysts downgrading this one a day after it disclosed a loan loss provision that was greater than Wall Street expected.
AOL TIME WARNER is the parent of this network and it was hitting its lowest price in two weeks extending yesterday's losses.
And Texas Instruments down almost 2 bucks there. A downbeat quarterly profit report and also downbeat outlook. That had traders there a little bit worried. Overall, breadth was negative here, volume was pretty active. Traders say, Lou, it could have been worse considering. DOBBS: As usual. Christine, thanks. Christine Romans and of course we will be taking a look at what happened in the other markets, particularly the Nasdaq later in the broadcast. Coming up now, President Bush in Shanghai, his first overseas trip since the September 11 attacks. We'll take a look at what the president is accomplishing in Shanghai.
And the war against terrorism against the Taliban and the al Qaeda just the first step in the war against terrorism worldwide. We will be joined by a geopolitical analyst and expert who will layout the next stages of this campaign for us.
(COMMERCIAL BREAK)
DOBBS: The campaign in Afghanistan against the Taliban an al Qaeda network at center stage the hostilities began, but military officials insisting this is just the first stage of what will be a long campaign.
Joining me now from our studios in Washington D.C. is Jack Wheeler, director of the Freedom Research Foundation.
And Jack, you believe this campaign has some rather obvious stages. What beyond the Taliban and the al Qaeda in your judgment?
JACK WHEELER, FREEDOM RESEARCH FOUNDATION, DIRECTOR: Lou, to begin with President Bush has made it very clear this is a war not just against individual terrorists and their networks but against states, states who sponsor terrorism, states who foment it. So I see a series of four stages. The first is obviously Afghanistan. I mean we have got to get the Taliban out of power and Osama bin Laden dead and all his followers. They have got to be hunted down and shot.
But beyond Afghanistan, the second stage is obviously Iraq. Saddam Hussein, we didn't get rid of Saddam Hussein because back in '91, they were afraid, oh well, if we get rid of Saddam Hussein, Iraq will fall apart.
Well, I think we've got to get beyond this nation-state in stone box that we've been in and consider OK, what if Iraq does fall apart? Then we figure out where the pieces go. The object has got to be to kill Saddam Hussein, get him out of power and get a new government in. That's stage two.
DOBBS: Well, as the President also said, this has to be a campaign against those terrorists responsible for September 11. Do you think there's clear evidence that Saddam is associated with and in any way responsible for the September 11 attacks?
WHEELER: Well, actually, that doesn't really matter in a certain way. We are at war with the phenomenon of terrorism, primarily Moslem terrorism. And that means it doesn't matter if Saddam is involved or not. We know he's involved in chemical and germ warfare. We know he's trying to get a bomb. We have got to end this phenomenon, put an end to it. And so, you can only put an end to it if you get rid of Saddam Hussein. But that's only stage two. The next -- then it gets trickier because stage three is Iran. And stage three, we have got to get a new government in Iran. How we do that is a very tricky matter, but over 50 percent of the population is Iran is under 25-years of age.
These people do not like the Mullahs. They want a new government. I personally think that the future government of Iran will be a constitutional monarchy with Reza Pahlavi, the son of the Shah. But however it's done, we've got to realize that a pro-West Iran is an absolute linchpin in this whole phenomenon.
It would change the world to have a pro-West Iran. And that's got to be our clear goal.
DOBBS: Jack, you have moved from one instance in terms of Afghanistan not being worried about nation building, and in the next, in the case of Iran, talking about what you would do there military, but starting with nation building. And in fact, you have a candidate for the executive office of this subsequent state.
WHEELER: Right.
DOBBS: I'm a little overwhelmed by some of the inconsistency.
WHEELER: Well, let me put it this way, Iran has been around for 2500 years, Persia. It is a real country. Iraq is not a real country. Iraq is a make-believe country, an artificial construction constructed by the Brits after World War I of three former provinces of the Ottoman Empire. And so, it's not a real place, and that's why they fear if Saddam Hussein goes, the country will fall apart because it's not a real country to begin with.
DOBBS: Jack, thank you very much for being here. Jack Wheeler.
WHEELER: Pleasure, Lou.
DOBBS: Freedom Research Foundation.
For more now on the President's trip to Shanghai and the APEC summit, which has clearly a new agenda, let's go now to our White House correspondent Major Garrett, who is traveling with the President, reporting tonight from Shanghai. Major Garrett?
MAJOR GARRETT, CNN CORRESPONDENT: Well, good Friday morning to you, Lou. You know, before September 11, the agenda for this APEC conference was going to be all about China and Taiwan's eventual ascension into the WTO, maybe a new round of global trade talks. All of that agenda, if not put to the side, at least has been overwhelmed by the coalition building that President Bush will seek to accomplish here in the global fight against terrorism.
And that coalition building effort begins today with his first face-to-face meeting with the Chinese president Jiang Zemin. Secretary of State Colin Powell said here yesterday that he is encouraged by the initial support the Chinese government has offered, offering intelligence against the war against terrorism. Also being generally supportive of the United Nations Security Council for what the U.S. has tried to do, as it has dealt with Afghanistan, what many people regard as the first stage of this war against terrorism.
But there's a larger agenda here as well, Lou. There are a couple of nations who belong to the Asia Pacific Economic Cooperation Group, particularly the Philippines, Indonesia and Malaysia, who have been less than enthusiastic about the war on terrorism.
President Bush will be meeting with them here as well. And he hopes to encourage them to be more forthright in their support for the campaign against global terrorism. And we use his first meeting with Jiang Zemin as sort of a symbol that if China can be more supportive, then the rest of the Asia Pacific community can be as well -- Lou.
DOBBS: Let me ask you very quickly, Major. There is an advance team led by Secretary of State Colin Powell, meeting with those heads of other countries and their ministers. Is there a sense that they have been successful at this point in those early talks, preliminary talks with the ministers of these other countries in terms of building, strengthening perhaps extending the coalition?
GARRETT: Indeed they are encouraged, Lou. There will be a statement from this APEC conference for first time getting out of a region of economics and getting in to geopolitics, a statement that condemns terrorism and offers APEC general support for a campaign against terrorism. The United States believes that's very important.
And as Secretary of State Powell has already pointed out, and President Bush will underscore, the September 11 attacks were also attack on global economic freedom. The World Trade Center was a target, not by accident, President Bush will say. It was an attack on free trade and free markets, something that he believes APEC and the U.S. must work together to defend -- Lou.
DOBBS: Major, thank you very much. Major Garrett traveling with the President tonight, reporting live from Shanghai.
Well, coming up next here, we'll bring you the latest on the air strikes against the Taliban in Afghanistan. President Bush, of course, looking for further help in the war against terrorism. We'll be talking with one top business executive in attendance. Stay with us.
ANNOUNCER: After the break, Lou is joined by James Morgan, CEO of Applied Materials.
(COMMERCIAL BREAK)
DOBBS: Now for the latest developments in the war against terrorism and the anthrax investigation. An assistant to CBS news anchor Dan Rather tests positive to anthrax. The young woman contracted anthrax through the skin. She is expected to make a full recovery.
A postal worker in Hamilton Township, New Jersey tests positive for anthrax. The employee may have handled one or more of the letters sent to Tom Brokaw and Senate Majority leader Tom Daschle.
The government offers a $1 million reward for information leading to the arrest and conviction of anyone responsible for distributing the deadly bacteria. And under tight security, Vice President Dick Cheney tours the wreckage of the World Trade Center.
Four men today, sentenced to life in prison for their role in blowing up the U.S. embassies in Tanzania and Kenya in 1998. One convicted of trying to blow up other U.S. targets. And heavy bombing has been reported tonight around the Taliban stronghold of Kandahar -- newswire saying a veteran fighter in Osama bin Laden's al Qaeda terrorist troop was killed in air strikes. The Pentagon says it cannot confirm that report.
This year's APEC economic summit in China, clearly different from years past. To talk about what issues are dominating those meetings now, we are joined from Shanghai by James Morgan, who is the Chief Executive Officer of Applied Materials.
Good to have you with us, Jim. The agenda there...
JAMES MORGAN, CEO, APPLIED MATERIALS: Nice to be here, Lou.
DOBBS: And I should point out to our viewers, if you'll let me digress just for a moment, it is, as you know, a very long ways between New York City and Shanghai. So we're going to have a bit of a delay as Jim and I talk here. So bear with us on that, if you will.
Jim, this meeting obviously terrorism is high on the agenda. Trade, while taking a backseat to that subject critically important. How go the meetings from your standpoint?
MORGAN: All right, I think Lou, we're going to look back in 5 and 10 years from now and probably see that this was one of the defining moments in history. If you think about the fact that all the countries around the world, except for a few in the Middle East are working to support each other in an effort, that gets a focus going forward on all of the efforts of government and business.
So I think the cooperation level I'm seeing here is really almost unbelievable. And my belief is that'll go a long way towards helping to get our economies going again, as well to address this terrorism issue.
DOBBS: You and your company have done business in China for a very long period of time. Last night, you and a few others had dinner with Jiang Zemin. Give us your take on his demeanor, his attitude and whatever else he conveyed to you?
MORGAN: Well Jiang Zemin, of course, I've known him since 1983 when he visited Applied Materials as the minister of electronics. And his focus has always been to engage with the world. And he understands the IT industry very well.
And so, one of the things he emphasized in his speech was the continuing expansion of the IT industry here in China. And of course, you know for us, we just announced a new office yesterday here and announced a large order, a couple hundred million dollar order. So I think that's a sign of the kind of can-do, go forward attitude that's taking place here in China. DOBBS: And your best judgment, as to what will result from the meetings between President Bush and Jiang Zemin?
MORGAN: Well, I think if you go back into July after the plane incident even, both sides were working hard to establish a firm, long-term foundation for the relationship. The President had already committed to do a state visit. Now that's gotten curtailed because of the tourist incident, but both the parties are working very hard.
We met with Secretary Powell yesterday for a while. And he reaffirmed that in his preliminary meetings, in preparation for the President, said that they're working hard to further the Chinese American relationship.
DOBBS: Jim, thank you very much for being with us. Jim Morgan from Shanghai tonight.
MORGAN: Thank you, Lou.
DOBBS: Well, coming up next, while book sales are disappointing. And there is a new crop of books, surprising books perhaps, topping the bestseller list. We'll be telling you all about that.
And is the media to blame for heightened fears about anthrax? We'll tell you what some of our viewers, some of you, had had to say. And Microsoft reporting quarterly results after the bell. We'll have the results, next.
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DOBBS: Well, booksellers like many retailers have seen a sharp slowdown in sales since September 11. But those booksellers are also noticing a change in the material that we're all reading.
Susan Lisovicz has the story.
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SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): When times are bad, Bible sales are good. But even at this Christian bookstore, a landmark in New York City since 1883, there is no comparison to September 11 and its aftermath.
GARY GIN, CHRISTIAN PUBLICATIONS: When you look at the Gulf War or even the previous recessions, we saw increases in our Bible sales between 10 and 20 percent. But this time, we are seeing increases of 50 to 60 percent. So it's just a dramatic difference from anything we've experienced before.
LISOVICZ: Even recently retired G.E. Chairman Jack Welch had to postpone his book tour.
JACK WELCH, FORMER CHAIRMAN, GENERAL ELECTRIC: We canceled our trip for the first month after the tragedy. We started on the 11th actually, that day. And so it ended right away.
LISOVICZ: Even so, Welch's memoir tops the bestsellers list. But look at the newcomers. Books about biological weapons, fire fighters, war, compassion, and the Twin Towers. The media's complete focus on breaking news over the past month translates into lost marketing opportunities at a critical time.
JOHN BAKER, EDITOR, PUBLISHERS WEEKLY: The real problem has been, I think, that the usual promotion, marketing, and publicity plans for authors with big fall books have been thrown completely into disarray for several weeks.
LISOVICZ (on camera): Now the same booksellers that were so hard hit after September 11 see an opportunity for the upcoming holiday season, because of the deteriorating economy and Americans' preference to stay home.
(voice-over): The nation's number two bookseller, Borders, lost one of its own stores, located in the World Trade Center. It's already warned that sales will be off in the third quarter as a result of September's terrorist attacks. But Borders is capitalizing on its DVDs, patriotic music, and current events section.
TAMI HELD, PRESIDENT, BORDERS BOOKSTORES: What we provide customers, especially if they're tightening their belts, it's a very affordable gift alternative. It's personal. It's something that someone can specifically relate to.
LISOVICZ: And in these difficult times, readers are looking for answers.
Susan Lisovicz, CNN Financial News, New York.
(END VIDEOTAPE)
DOBBS: Well, coming up next, some of your thoughts on the war against terrorism and the anthrax scare. Also, the world's largest software maker posting its quarterly results, predicting, however, a poor holiday season. That story on Microsoft is next here on MONEYLINE.
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DOBBS: In corporate news tonight, Bear Stearns announcing it will cut 830 jobs, more than 7 percent of its work force. Those would be the largest layoffs in the company's history. Bear Stearns also saying its five top executives to take a 70 percent cut in their pay.
SBC Communications offering to buy the rest of Prodigy, paying $465 million, raising its previous offer by about 20 percent. That after several Prodigy shareholders sued to block the original deal. SBC already owns 42 percent of the Internet service provider. Later here on MONEYLINE, some viewers are pointing the finger at the media for raising fears about anthrax. We'll take a look at your thoughts in just a moment. But before that, Microsoft reporting earnings results. Greg Clarkin at the Nasdaq marketsite to tell us all about it -- Greg.
GREG CLARKIN, CNN CORRESPONDENT: And Lou, a little bit of everything in this quarterly report from Microsoft. You had a $1.2 billion write-down for investment losses. You also had profits down 42 percent from a year ago period, but thanks to cost controls, as well as a spike in sales, the company was able to top analyst estimates.
There's the nuts and bolts for you. 43 cents a share in earnings versus 39 that the Street expected. And sales up to $6.1 billion. Now in after hours trading, we saw a nice pop on the stock. It was trading higher than $57 a share, up 75 cents at the last quote of $57.50. But the company also saying for the quarter that they're in right now, this fourth quarter, which is the company's second quarter, they say sales will be about $7.1 to $7.3 billion. $7.3, slightly above that is what Wall Street was expecting. Earnings for this quarter expected to be 49 to 50 cents a share. The Street was looking for about 51 cents a share. So it looks like they're going to come in light in both of those areas for this present quarter. And the company remaining as they normally do, very, very cautious. And they still say that they expect PC sales to decline for their fiscal year -- Lou.
DOBBS: Greg, at this point then, a disappointment for Microsoft or at least its shareholders ahead, but a pretty strong performance this time?
CLARKIN: Exactly. This quarter they actually were able to rescue it thanks to the little bit of uptick in sales, as well as very tight cost controls that basically saved the quarter. Next time around though, it looks at this point, at least it's early, early on, that the numbers will be a little bit lighter than most of the Street was expecting.
DOBBS: OK, Greg, thanks. Greg Clarkin from the Nasdaq.
Coming up next, we'll take a look at your e-mail, your thoughts and we'll tell you what, at least part of what you can expect tomorrow. Stay with us.
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DOBBS: Tomorrow we'll have the Consumer Price Index Report, the CPI for September. Economists expecting a rise of 0.2 of a percent. Also, the trade deficit for the month of August, quarterly results, earnings reports from: Nokia, Gillette and Yellow, all expected out tomorrow, along with a host of others.
And it is time again to a look at your comments, many of you responding to our guest last night, who talked about the violence in Kashmir.
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MANSOOR IJAZ, CRESCENT INVESTMENT MANAGEMENT: Because the terrorism in Afghanistan is a very different breed. That is against civilization.
(END VIDEO CLIP)
DOBBS: Well, many of you taking issue with that. And amongst them, Jay Nayeghandi writing to say, "The characterization of terrorism in Kashmir by yesterday's guest as being different because it was a freedom struggle is an oft repeated piece of Pakistani propaganda.
Another writing in to say, "There is no good in terrorism. Terrorism is terrorism and the acts of terrorism in Kashmir are not part of a freedom movement."
Your many comments on this topic, this desk, underscored its emotional nature. And we agree with you, terrorism is terrorism, no matter what.
Other concerns this evening about the role of the media. Some of you saying our reporting on anthrax is creating more fear than understanding.
Richard Wagner wrote in to day, "You are doing more to terrorize the USA than the terrorists."
Another saying, "The media needs to be very careful not to feed an unnecessary sense of panic."
And of course, we could not agree more with that view. And that's exactly why we're taking care to get you the very best and the latest information, to present it as thoughtfully as possible. Whenever you feel we're inaccurate or irresponsible, let us know right here. You can always send us your comments at moneyline@cnn.com
For this Thursday evening, that's MONEYLINE. Thanks for being with us. I'm Lou Dobbs. Good night from New York. "WOLF BLITZER REPORTS" begins right now.
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