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Lou Dobbs Moneyline
Dow Declines 66.70 to 9834.68; Nasdaq Declines 5.46 to 1875.05
Aired November 21, 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.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Wednesday, November 21.
Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, CNN ANCHOR: Good evening.
The Taliban agrees to surrender the northern city of Kunduz, a major victory for the Northern Alliance. We'll have a live report. And we'll hear from a former cabinet member, Lawrence Korb.
A 94-year-old woman dies from anthrax inhalation and more traces of the bacteria are found in Washington. We'll have the latest on the anthrax attack.
Americans are heading home for the holidays. We'll have a live report from New York's LaGuardia Airport.
And on Wall Street, stocks fall again as investors locked in profits from the market's recent gain.
Now for the latest on the War against Terrorism, it now appears the last northern town under Taliban control will be handed over to the Northern Alliance.
CNN has learned the Taliban has agreed to surrender Kunduz. Details of the surrender are still being negotiated. In the south, Taliban leaders say that they are not giving up Kandahar, and they say they have no idea where Osama bin Laden is.
And they are not in communication with him. Meanwhile, the U.S. military is on the outlook for al Qaeda terrorists who might try to escape into neighboring countries and then board ships in the Northern Arabian Sea.
Four U.S. service members were injured last night when a military helicopter made a hard landing in Afghanistan. The Pentagon says none of the injuries were life threatening.
President Bush told troops at Fort Campbell, Kentucky that Afghanistan is just the beginning in the war against terrorism. Mr. Bush thanked the soldiers for their service and determination and vowed the terrorists would be wiped out wherever they hide. Defense Secretary Donald Rumsfeld visited troops at Fort Bragg, North Carolina. Rumsfeld told them the war in Afghanistan turned once the United States had Special Forces on the ground to help with targeting.
And as we just mentioned, the Taliban has agreed to surrender the northern town of Kunduz. That would leave the Taliban with just one major city in Afghanistan, Kandahar.
For more, we're joined by Christiane Amanpour in Kabul -- Christiane.
CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, Jan, Kunduz became the Taliban's last stand in the north about two weeks ago after Mazar- e-Sharif, the strategic northern town fell to the Northern Alliance, and the forces of General Abdul Rashid Dostum.
Since then, the Taliban have been putting up a fight and have been vowing to fight to the end. There are also reports that those local Afghan Taliban who had wanted to surrender over the last two weeks, some of whom may be in the hundreds have been executed by other Arab fighters and Chechans and Pakistanis who were allied with the Taliban.
Well now overnight, after the Northern Alliance has sent in a delegation and also after the Taliban has been discussing with General Dostum. General Dostum now says that they have agreed to surrender and that the details of what will happen to the Afghan Taliban.
Also to the POWs or of the Chechans, Pakistani and Arab fighters, those details are still to be worked out, and we understand that the talks there are continuing through this night.
We will have more details just as soon as they become available to CNN. In the meantime as you said, Kandahar is now the last remaining stronghold of the Taliban. And in a press conference earlier today, they had vowed to fight to the end right there as well -- Jan.
HOPKINS: Christiane, the fate of the soldiers that remain is pretty critical. We've been hearing lots of reports about what might be going on in Kunduz. Is this going to be a sticking point in the agreement to surrender?
AMANPOUR: Well, it's hard to tell at the moment but, you know, one thing that has caused a great deal of animosity amongst the Northern Alliance is that the Taliban have been allied with these what they call foreign mercenaries, the Chechans, Pakistanis, people from all over the Arab world who have come to fight with the Taliban over the last few years and who also have been accused of being allied with al Qaeda, the al Qaeda network.
Now in many cases, the Afghan Taliban were quite willing to defect and to change sides. This is typical sort of Afghan military procedure. Battlefronts tend to change hands through defections, selling out and other such things. But in Kunduz, these mercenaries were refusing to allow that and now it is going to be interesting to see exactly what happens to them.
HOPKINS: Christiane, another question. The Taliban is saying that it doesn't have communication with Osama bin Laden, doesn't know where he is. Do you believe that?
AMANPOUR: Well, you know, the Taliban has been saying different things about Osama bin Laden ever since September 11. They've been alternately claiming that he's under their control, and then when things get a bit hairy that he's not under their control. And so, as far as I can gather, nothing much new.
I mean it stands to reason probably that they would say that they don't know where he is. It's very hard to pin down what they know, what they don't know frankly.
HOPKINS: Thanks very much. Christiane Amanpour in Kabul, Afghanistan.
And joining us now is Lawrence Korb. He's a former deputy defense secretary under Ronald Reagan and a current member of the Council on Foreign Relations. Welcome, Larry.
LAWRENCE KORB, FORMER DEPUTY DEFENSE SECRETARY: Nice to be with you.
HOPKINS: Now we have the report of a surrender agreement in progress in Kunduz. Only Kandahar remains under Taliban control. Is this war proceeding faster than we expected?
KORB: Well I think it's certainly faster than we anticipated two weeks ago. It's very interesting, two weeks ago the Pentagon was saying "gee, they're tougher than we thought" and then all of a sudden once they crumbled they went very, very quickly.
HOPKINS: And are we ready for what happens next?
KORB: I think not in a political sense because see we didn't want the Northern Alliance to go into Kabul and they did. We're probably not happy with some of the surrender negotiations going on in terms of what will happen to the people who have been with the Taliban joining the Northern Alliance. And so our political and military strategy are not quite in sync and we really have a lot of catching up to do in the political realm.
HOPKINS: Now there are going to be discussions next week about what the new Afghanistan will look like. This is pretty critical, isn't it?
KORB: Very critical because even if you defeat the Taliban, you want to insure that you have a stable Afghanistan that can not be home to terrorists again. And remember ten years ago when we walked away, the Northern Alliance took over. They did such a horrible job that the people turned to the Taliban.
HOPKINS: So did we learn something from that?
KORB: Hopefully we've learned that we have to stay involved. The United Nations has to be involved. There has to be peacekeeping forces in there. There has to be a transitional government and you have to have a final government that's acceptable internally to all the people in Afghanistan as well as the neighboring countries, particularly like Pakistan and Iran for example and Russia.
HOPKINS: Well there's also been discussion this week about Iraq and whether that's really the next target. What do you think about that?
KORB: Well, unless you've got a smoking gun that shows that Saddam was directly involved in the September 11 attacks in the United States or possibly these anthrax attacks, it will be very hard to go after him and keep the coalition together, and remember we need countries like Russia, Pakistan, Saudi Arabia in order to dry up the financial resources of al Qaeda.
We would need to use their military facilities as we had in Afghanistan. So it would be very hard to go against them without that smoking gun because people are going to say "what's changed since September 11?" In other words, is he any different than he was on September 10?
HOPKINS: But there seems to be a signal from the administration that that's the plan.
KORB: Well I think there's a debate within the administration between the Pentagon and the State Department and I think there's also concern in the administration about some of their right wing supporters. They want to insure, let them know that at least they're thinking about it, and I think also send a signal to Saddam that maybe he would be next.
And I notice now Saddam is willing to let the inspectors back in, in return for the sanction, at least he's talking about that.
HOPKINS: What about the question that I asked Christiane, the Taliban saying that it doesn't know where Osama bin Laden and is not in communication with him. Do you buy that?
KORB: Well, I mean, chances are they're less likely to know than they did a while ago because remember they only control a very small part of the country and he may be in a part that they don't control anymore.
HOPKINS: Do you suspect that he's still in Afghanistan?
KORB: I think he probably is in Afghanistan because anybody that takes him know they'll feel the full wrath of the United States and the international community.
HOPKINS: And so he has to stay in Afghanistan?
KORB: Well he has to stay in Afghanistan. The only place he could probably go is in that no man's land between Pakistan and Afghanistan which nobody really controls other than the Pashtuns.
HOPKINS: And he travels with a large entourage, a number of wives and a number of children.
KORB: Well I think probably now he's not traveling with that large of an entourage because that would make him an easy target. I suspect he's on the run with very, very few people around him.
HOPKINS: We have -- you mentioned anthrax attacks definitely back in the news with the death of the 94-year-old woman in Connecticut. When you visited us last, you thought that this was definitely a continuation of September 11 and an additional terrorist attack.
Now the FBI seems to think that this may be homegrown terrorism. What do you think now?
KORB: Well it may, it probably is somebody that took advantage of what happened on September 11 and is probably sympathetic to the aims of al Qaeda. But it's looking less and less like that this person was a direct member of the network, though we really still don't know.
HOPKINS: Do you think it's going to be impossible to find someone or whatever or?
KORB: Well it took a long time just to find the Unabomber. It took years. In fact, it was his brother that turned him in. So this is a big country and it may be very, very difficult to find him unless he slips up along the way.
HOPKINS: As we go into Thanksgiving, how would you say we are militarily, both at home and abroad?
KORB: Well I think we've done a terrific job and hats off to the military because they accomplished their objectives, I think a lot quicker than anybody thought.
And I think at home we're much better off because we're paying attention to things that lots of folks in the think tank world that I come from have been warning about for years.
And so I think we are actually better off than we were certainly on September 11.
HOPKINS: Thanks very much, Larry Korb.
KORB: Thank you.
HOPKINS: The hunt goes on for Osama bin Laden's funding. New money laundering laws are being put into place. Treasury Secretary Paul O'Neill says that they will affect brokerages as well as vats, and even thought that means more work, security firms say that they're willing to go along.
Allan Dodds Frank has the story. (BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): On Christmas Day, new anti-money laundering regulations will stop Wall Street firms, as well as other financial institutions from doing business with offshore shell banks that can not prove they are legitimate.
U.S. Treasury Secretary Paul O'Neill believes the new regulations will help crack down on terrorist funding sources.
The new regulations under the recently passed U.S.A. Patriot Act require both banks and brokerages to do a far better job of learning who their customers are.
ALAN SORCHER, SECURITIES INDUSTRY ASSOCIATION: It requires more enhanced due diligence for foreign customers and requirements go across the board. So I think that's it plus the, I think the joint efforts of government and industry together, that's new.
FRANK: While some on Wall Street had opposed being included in the crackdown, Citigroup which owns Solomon Smith Barney made a point of supporting the Treasury, Citigroup saying it believes the shell bank ban does apply to U.S. securities firms as well as to U.S. banks.
The Treasury estimates 9,000 offshore banks will be required to fill out forms proving they have actual offices, and before being allowed to maintain any account with a U.S. bank or brokerage, an offshore bank also will have to document the true ownership of the bank and its accounts.
BETTY SANTANGELO, SCHULTE ROTH & ZABLE: An offshore bank is going to have to demonstrate that it's either affiliated with a well- known recognized financial institution, domestic bank or a foreign bank, or it's going to have to demonstrate its own (inaudible). If it doesn't then the likelihood is that the U.S. institution will decline to do business with them.
(END OF VIDEOTAPE)
FRANK (on camera): The details of the regulations are still being formulated as Treasury representatives and the financial industry figure out the best methods for determining identity of offshore customers.
One industry veteran predicts the burden of proof will shift as American institutions simply refuse to do business with offshore customers who fail to prove they're legitimate -- Jan.
HOPKINS: Allan, do you suspect that the terrorists have brokerage accounts?
FRANK: It's certainly widely believed inside the U.S. intelligence community that they do and that they've used offshore banks to move money around and with investment advisers.
HOPKINS: Interesting, on Wall Street basically. FRANK: Well through Wall Street, if no necessarily on Wall Street. Maybe through the Bahamas, the Caymans, Cyprus, all the great money laundering havens.
HOPKINS: Thanks very much, Allan Dodds Frank.
FRANK: Thanks.
HOPKINS: And now the latest on the anthrax attacks. The 94- year-old Connecticut woman infected with anthrax has died. Investigators still don't know how Ottilie Lundgren became infected, who did it, or why. The same hospital that treated Ms. Lundgren had its own anthrax scare.
A woman came to the emergency room with an envelope which she said contained a suspicious substance. Preliminary tests on the envelope came back negative. Further testing is being done.
Meanwhile more anthrax traces found in the nation's capitol, this time in the mailroom of the education department. For the latest on the anthrax attacks, we are joined with Eileen O'Connor in Washington.
So Eileen, where is the anthrax investigation headed now?
EILEEN O'CONNOR, CNN CORRESPONDENT: Well what they're trying to do, Jan, is they're trying to create a timeline for the activities for Ottilie Lundgren, the woman who died, the 94-year-old woman in Connecticut.
She lived in a rural area. She lived by herself and she didn't get out very much. They say that she went to the beauty parlor for the most part and came back home. She did collect her own mail. She went through her own mail.
There is one theory that would put it that perhaps she got a cross-contaminated letter that had somehow come through Washington, D.C. Being 94 years old, CDC officials point out, and NIH point out that she has an immune system that's highly compromised.
So it wouldn't take a lot of spores perhaps to infect her and possible that it came from a cross-contaminated letter, meaning that this was a letter that somehow came into contact with one of those anthrax-laced letters that went to the Hill, be it the letter to Senator Daschle or the letter to Senator Leahy.
So those are the kind of things they're looking at. In addition, they're trying to find any kind of intersection point between her and Kathy Nguyen, the New York woman who died of inhalation anthrax.
She too didn't seem to have any kind of connection to this. She wasn't a postal worker. She didn't have anything to do with politics or the media. So they'll try to see was there anyone who visited both of these women perhaps, anyone who crosses their paths in some way, some kind of intersection point -- Jan.
HOPKINS: And this letter that was delivered to the hospital, so far it turns up negative. Anything else on that?
O'CONNOR: No and they also said, by the way, that they have an increased amount of people reporting suspicious symptoms, flu-like symptoms wanting to get checked for anthrax.
And health officials say "please don't worry because of this case." They do say, "Look, if you feel concerned, go talk to your doctor, come on in. Get it checked." They're not advising against that but they do say that some of this heightened reporting of more cases, that these cases are not necessarily going to be anthrax. It just shows heightened concern among the population. Jan.
HOPKINS: What about this case in the Department of Education. Do you think it's linked to the cases on Capitol Hill?
O'CONNOR: Officials believe it is. They believe that a lot of these trace amounts that are being found around town are because of cross-contamination. Remember that Brentwood facility handles all government mail that goes to all government agencies, including Capitol Hill.
And what we do know about the Leahy letter, which still hasn't been opened by investigators, is that it is very identical, at least on the outside, the envelope showing the same return address, the same postmark, the same postmark date in fact as the letter to Senate Majority Leader Tom Daschle, also the same kind of block lettering.
Now they also said that they found within the sample bag a very, very concentrated form of anthrax, very similar, identical really to the kind of anthrax that they found inside that Daschle letter.
They're expecting to find a lot of concentration inside the letter. One of the things, one of the reasons they haven't opened up the letter is that they're trying to do as many tests or figure out what kind of tests they want to do.
All of these investigative agencies have different kind of things that they'd like to investigate. For instance, the Postal Inspectors want to know how did the anthrax leak from the envelopes when it went through those machines. They'd like to test the letter going through a machine.
And in addition though, the FBI, they want to preserve as much of that anthrax as possible in order to do the kind of chemical analysis that will lead to the source.
So right now what they're doing is they're gathering the advice of scientists to figure out the best way to do this and get as much evidence as they can to try to lead to the who, to the source of this anthrax.
HOPKINS: Thanks, Eileen O'Connor in Washington.
And still to come, moving out or staying put? Many companies refuse to leave Wall Street despite the terrorist attacks. We'll tell you why. Also tonight, a report on why the number of dead or missing from September 11 has been reduced by thousands. That's a live report (UNINTELLIGIBLE).
And intrepid Americans take to the skies refusing to be cowered by the attacks against the United States. That story and more when MONEYLINE continues.
(COMMERCIAL BREAK)
HOPKINS: On September 11, terrorists launched an attack that struck at the very heart of capitalism, Wall Street. Many companies lost their offices. Some sought new homes in nearby states. But others, including some major players, planned to stick it out.
Kitty Pilgrim looks at these companies that are refusing to leave their homes on Wall Street.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice over): Manhattan versus New Jersey, Connecticut and the suburbs. It's an old rivalry.
On the streets of New York, bad drivers are called New Jersey drivers. People from the areas outside of Manhattan and the suburbs of New Jersey are called the bridge and tunnel crowd.
But after September 11, the New York-New Jersey rivalry turned serious. To stay or not to stay. New Jersey has offered tax breaks to entice businesses to move permanently. A handful of companies have applied, although few have definitely committed.
American Express has relocated more than 2,000 employees to New Jersey and 500 more to Connecticut. However, the company says they are committed to staying in New York, but has yet to determine a location.
Real estate analysts say Manhattan's financial district will be rebuilt for practical reasons.
JOHN UTT, SALOMON SMITH BARNEY: There's a brain trust market. You know if you go to New Jersey, you lose all the people from Long Island and West Chester, likewise if you go to any other markets. This market is very central for people in the financial industry and I think it will always be.
PILGRIM: Some companies have stayed in Manhattan. Merrill Lynch has moved employees to mid-town from downtown Manhattan and the company has begun to move more than half their 9,000 employee back into the World Financial Center.
VALE ROEDING, OFFICE BUILDERS MAGAZINE: It's a place where you can easily have eight or nine meetings in a day and move from one meeting to the next face-to-face and do business and that's very important for many businesses. PILGRIM: Lehman Brothers is committed to Manhattan, setting up its new world headquarters here in mid-town Manhattan and another office on Park Avenue.
(END VIDEOTAPE)
PILGRIM: The rebuilding of lower Manhattan may take years. The transportation systems are still very damaged. There are millions of square feet of empty office space which won't be rented anytime soon.
But most analysts say with economic recovery, boom times will come back to the financial district -- Jan.
HOPKINS: It's hard to get to those meetings on Wall Street these days.
PILGRIM: Well these days the transportation system is still not functioning.
HOPKINS: Thanks, Kitty Pilgrim.
The number of dead or missing from the September 11 attacks appears to be a lot less than earlier thought. Original estimates at one point totaled more than 6,000.
Now New York City puts that number closer to 3,700. Peter Viles has the story.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice over): How many really died at ground zero. Two months ago, city officials were saying at least 5,000 or 6,000 and many feared the final number would be much higher.
This was the Mayor of New York back on September 17.
RUDOLPH GIULIANI, NEW YORK CITY MAYOR: The total that we now have that we have recorded 5,422 missing people. We have 201 confirmed dead. We've identified 135 and we have 66 that have not yet been identified.
VILES: But as the weeks have passed, that official estimate of the dead and missing has steadily dropped with each daily update from City Hall.
This week it fell below 4,000. Today it fell below 3,700. City officials now say their original list was full of mistakes and duplications. Among the more common employers that reported employees missing when, in fact, they were on vacation or not at work that day.
Other nations that similarly made high initial estimates of the missing from their countries and duplicate missing persons reports.
GIULIANI: Ninety percent of it is attributable to foreign nationals that were reported as missing, sometimes several times with slightly different names. They turned out to not have been at the World Trade Center. Maybe it's not 90 percent. Maybe that makes up 70 to 80 percent of it. Another 10 to 20 percent is just duplication.
VILES: It is not entirely clear why the process of verifying the list is taking so long. The city has never released the list to the news media, citing confidentiality concerns, and the Federal Emergency Management Agency, which provides disaster relief, says Washington is relying entirely on the city to tally the dead.
(END VIDEOTAPE)
(on camera): One notable exception to that privacy policy, the city last week shared its list with the Red Cross, which is the only relief agency actively looking for families of September 11 victims.
The Red Cross tells MONEYLINE it is working its way through that list in hopes of finding families that, for whatever reason, have not yet come forward -- Jan.
HOPKINS: Peter, we should point out that fewer victims though are a good thing.
VILES: Right.
HOPKINS: It means that a lot of people survived.
VILES: Right, there's this undeniably terrific news. It doesn't really help comfort those who have lost somebody or know somebody who's lost, but this is great news. We thought as many as 6,000 or 7,000 people are dead. Now we know the number's roughly half that and still falling.
HOPKINS: Yes. Thank you, Peter Viles.
And coming up on MONEYLINE, the Taliban agrees to surrender Kunduz but vows to fight to the death in Kandahar. We'll have the latest war developments.
We'll also report on holiday travelers and whether the September 11 attacks are keeping more people at home.
And we'll tell you how one rental car company is thriving while many of its rivals are stuck in reverse.
(COMMERCIAL BREAK)
HOPKINS: Now for the latest on the war against terrorism. CNN has learned that the Taliban has agreed to surrender its last northern stronghold of Kunduz. That followed hours of talks between Northern Alliance and Taliban military leaders.
But in the southern city of Kandahar, the Taliban is vowing to fight to the last man. President Bush saluted the man and women in uniform during a trip to Fort Campbell, Kentucky. President Bush told the Army's 101st Airborne that the most difficult steps in the war against terrorism are still ahead. A 94-year-old Connecticut woman has died of inhalation anthrax. Investigators don't yet know where she contracted the bacteria.
Part of the same Connecticut hospital where the woman was admitted has been sealed off after another woman arrived with an envelope which she said had a suspicious substance inside. Initial tests on that envelope turned out to be negative for anthrax.
In Washington, another building has turned up with traces of anthrax. The U.S. Department of Education tested positive for the bacteria.
Troubled Argenbright Security gets a reprieve. A judge ruled that Argenbright, which screens passengers at Boston's Logan Airport, had its permit suspended illegally. Argenbright has been under fire for security breaches that have occurred at Logan since September 11. Argenbright's attorneys say the law requires a hearing before a license can be revoked.
At this moment, Americans across the nation are rushing to airports, piling into cars, and boarding trains as they head home for the Thanksgiving holiday.
The lines are particularly long at airports this year as millions of travelers deal with heightened security. We check in now with Brian Palmer. He's at LaGuardia in New York. So how is it, Brian?
BRIAN PALMER, CNN CORRESPONDENT: Good evening, Jan.
I'm going to have to contradict you a little bit. We've seen quite an ebb and flow of human traffic today through LaGuardia Airport but we're in a pretty serious ebb phase as you can see behind me. The lines were incredibly long this morning, snaking throughout the whole terminal. Then there was a lull during the middle of the day. It picked up in the evening a bit, but we're very slow now. I guess you could call these lines manageable.
Many of the people we talked to left two and three and four hour in order to clear security. Some of them are left with quite a bit of time on their hands. Pleasant surprise for some and unpleasant surprise for others.
Now overall, AAA is predicting that the number of travelers will be down about 6 percent this year. This is based on an annual survey that they do on every major holiday. So about 6 percent during this Thanksgiving. Air traffic will, of course, be down. And airlines have actually cut the number of flights. Many airlines have cut the numbers of flights by about 20 percent. Traffic on the highways is also expected to be less.
However, Amtrak has added seats to some of their trains. They're expecting the traffic will be a bit heavier for them. So we'll see if their bet is going to pay off -- Jan.
HOPKINS: So it -- you don't have to go the airport so much ahead of time, or at least at LaGuardia today? PALMER: Well, as I said, Jan, this morning, it was something. The joint was jumping. It was packed, but it had sort of slacked at this moment. People left a lot of time in order to check in and to clear the security checkpoints. It has been going slower, but at least at the moment, things have calmed down quite a bit.
HOPKINS: Maybe they left early for the holidays. Brian Palmer at LaGuardia in New York.
The September 11 attacks really hurt rental car companies, but not Enterprise. While rivals asked for government help, cut staff, or filed or bankruptcy, bookings at Enterprise are up. And the company plans to hire more workers.
Fred Katayama reports on the reasons behind the success of at Enterprise.
(BEGIN VIDEOTAPE)
FRED KATAYAMA, CNN CORRESPONDENT (voice-over): And business is picking up quickly at Enterprise, just when many of its rivals face double-digit declines in demand since the terrorist attacks.
The privately held $6 billion company will not disclose figures, but its holiday bookings are up sharply over the same time last year. What's set it apart, it gets 90 percent of its business in cities and suburbs. Most of its rivals depend on airports for 90 percent of their revenues.
ANDREW TAYLOR, CEO, ENTERPRISE-RENT-A-CAR: Our renters are a little different. The other rent a car companies at the airport that have a larger share tend to concentrate on the business travelers. And that portion is off much more than what you might call the infrequent air traveler and car renter. So our renters seem to be pretty loyal.
KATAYAMA: Enterprise is the nation's largest car rental firm with 4,300 outlets. Its lots lie within 15 miles of most customers. Many rent because their car's in the shop or they need it for a special occasion. So demand isn't sensitive to economic swings.
UNIDENTIFIED FEMALE: They generally have better rates than other people do. And they have nice cars. I've gotten good rates and really crappy cars at other places. And they're nice.
KATAYAMA: The company isn't without risks. Unlike rivals, it lacks an arrangement to sell cars back to the automakers. So it unloads them in the used car market, where prices are falling. But the company is financially secure.
SHERB BROWN, AUTO RENTAL NEWS: They have the highest debt rating in the car rental industry right now, despite the fact that they're privately held. And they've seen significant growth. I really don't see any big downside for them in the near term.
(END VIDEOTAPE) KATAYAMA: Enterprise is expanding. While Hertz and Dollar/Thrifty laid off staff after the attacks, Enterprise plans to hire 6,000 management trainees this year. And it's adding new outlets at a clip of one new office a day -- Jan.
HOPKINS: This is a family business, right?
KATAYAMA: Right. Andy Taylor is a second generation to lead it.
HOPKINS: Quite impressive. Thanks, Fred Katayama.
Coming up next, a refinancing boom in the housing market, but what exactly are homeowners doing with that extra cash? And a two- month rally stumbles again on Wall Street We'll take a look at the trading day and two bright spots for the economy.
(COMMERCIAL BREAK)
HOPKINS: Markets finished lower for the second session in a row, dragged down by several quarterly warnings and Salomon Smith Barney's downgrade of Microsoft. On the session, the Dow was down nearly 67 points to 9834. The Nasdaq and the S&P 500 closed lower by just over five points.
We have complete market coverage for you. Christine Romans at the New York Stock Exchange and Greg Clarkin standing by at the Nasdaq marketsite.
Christine, we begin with you.
CHRISTINE ROMANS, CNN CORRESPONDENT: Jan, traders are calling it just a little bit of indigestion after the feast that pushed the S&P 500 up about 17 percent in recent weeks. You can see that profit taking in this market in spades. And the stock at the top of the big board movers here.
Take a look at Krispy Kreme, KKD, down here about a dollar and change today. Traders saying the stock's up 30 percent this year. People were taking money off the table on some of their big name winners.
Guidant, meanwhile, rallying nicely, bringing that whole sector up sharply. It terminated the trial of one of its heart defibrillators because it reduced mortality of heart attack survivors by 30 percent. Now they're looking for quick regulatory approval of that.
Wellpoint Healthnetworks supporting a $1.3 billion purchase of Carefirst Blue Cross/Blue Shield. That move would create a managed care leader in the Southeast. That's according to analysts.
Lily, meanwhile, Eli Lilly having a nice rally. U.S. health officials approving Lilly's Xigris drug to treat sepsis.
Dynegy, meanwhile, down sharply. This one is a potential merger partner of Enron. And it's suffering the same fate we're seeing on Wall Street as Enron shares. Enron, the most actively traded stock here on the big board. Take a look at this year-to-date chart, down 94 percent this year. Goldman Sachs losing both of these firms from their recommended list. A lot of concerns that perhaps Enron is going to run out of money, will not be able to even stay afloat before its merger with Dynegy is complete. So that continues here, Jan. That is an active stock almost every session.
Meanwhile, we do not have trading tomorrow, as you know. Friday is a shortened day. Now there was this progress in Kunduz in Afghanistan late today after the bell closed, the closing bell. Some traders and analysts were saying that if we'd gotten that news a little bit earlier, they think this market might have rallied today -- Jan.
HOPKINS: Well, and traditionally, Christine, the Friday after Thanksgiving is a good day for the market, isn't it?
ROMANS: It is. It is a day -- usually you see people come back and buy stocks. It's a shortened trading day. It's also kids' day on Wall Street. So I'm sure there will be a lot of little people running around here, encouraging people to bid up stocks.
HOPKINS: Thanks. Christine Romans at the New York Stock Exchange.
And now to the Nasdaq marketsite. Greg Clarkin has the details on that Microsoft downgrade and the rest of the market -- Greg.
GREG CLARKIN, CNN CORRESPONDENT: And, Jan, I tell you, today was one of those days where we found ourselves without really just no incentive to buy. Investors having no reason, really, kind of weighed into the market.
We do have the long holiday four day weekend for many folks ahead of us. Also, the recent run up in the Nasdaq has taken some of these sectors, some of these stocks to pretty lofty levels.
On top of that, we did have some downgrades of some big name technology shares. Let's start with Microsoft. Salomon Smith Barney cuts their rating on Microsoft. They cite primarily the valuation of the stock. After all, it's run up 32 percent from September 21, but they do have some first and second quarter worries.
Most of those concerned the revenue coming in from X-Box related items. Now that revenue's expected to be $350 million this quarter, rise to $800 million two quarters out. And Salomon Smith Barney says given the economic weakness in Europe and Japan, they think those estimates may be too aggressive. Microsoft shares on the day down two percent.
Sun Microsystems was a big loser as well. It was down 6 percent. That after A.G. Edwards downgraded the stock. A.G. Edwards feeling is that it's run up from $9 to better than $13 before today's trading. Maybe it's a good time to take some profits.
Triquint Semiconductor lost after the company said revenue will be at the low end of guidance. Intel rose though. And take a look at the jump for Amgen, the biotech giant. That company coming out with some very bullish comments on their earnings and growth forecast. And that stock rising nicely, one of the big percentage winners today.
Overall though, Jan, a real quiet day of trading. Down five points, 1875 is the closing level -- Jan.
HOPKINS: Came up a lot at the end of the day, right?
CLARKIN: It did. It made kind of a half hearted attempt back towards break-even. Just never quite got there though.
HOPKINS: Thanks, Greg Clarkin at the Nasdaq marketsite.
A ray of hope today for the economy. Jobless claims fell for the fourth straight week and consumer sentiment improved during the month, two encouraging signs as we approach this Thanksgiving holiday.
Kathleen Hays is here with a closer look at the numbers. Something to be thankful for.
KATHLEEN HAYS, CNN CORRESPONDENT: Absolutely, Jan.
We're going to start by looking at the new claims for unemployment benefits. Weekly jobless claims, a high frequency indicator of the labor market. They fell 15,000 to 427,000. The good news is that the trend is down. The bad news is this level is still consistent with rising unemployment and falling payroll. So this is one we have to watch closely. Let's hope that trend continues lower.
Consumer sentiment, as measured by the University of Michigan stabilizing. It actually climbed slightly to 83.9 in November from 82.7 in October. You can see it was still well below the levels where they were a year ago, 107.6. But again, stability at the very least is a good thing.
And again, is it a good omen for the holiday shopping season? There are so many worries with the economy apparently in recession, post-September 11 attacks, that people are going pull back, spend less. Remember, retailers have to make about 25 percent of their profits this time of the year.
Now I spoke to Mike Niemira over at Bank of Tokyo Mitsubishi. He does one of the two big chain store surveys every week. It's expected that people are going to spend less. Mike's being a contrarian here, saying falling gas prices, tax rebates left to spend, are going to fuel more consumption, more shopping. And people want to feel good this year. So they're going to surprise us on that front.
People are also expecting a lot of heavy discounting, but Mike says well, no. If people are going to spend a decent amount, with inventories already very lean for the retailers, they can't afford it. We won't see the kind of discount that maybe we're hoping to see.
A couple more things I want to look at are some maybe holiday shopping myths. We touched on this one yesterday. I want to look at it again. The Friday after Thanksgiving, everybody says well, you know, if that's a good day, that means the whole season is good. It's a good barometer.
Well, according to Mike not really. He points out that last year on the Friday after Thanksgiving, it was a very good day, but it was followed by a disappointing shopping season.
There's another myth that Thanksgiving Friday is the biggest shopping day of the year. Mike Niemira says not really, not anymore. Now it's the Saturday before Christmas. And the reason is apparently that people are disorganized. So they don't get their shopping done. And I think Mike must have had me in mind because I always do my shopping late. And I'm just kind of interested to see that the rest of the country is catching up with me.
I also think it's because with so many discounts, people must figure why shop early. Let's wait until at least halfway through the month and get some good deals.
HOPKINS: Well, we'll see what happens this year. People may feel a lot better now than two months ago. And they may go out shopping. That's right.
Thanks, Kathleen Hays.
The 30-year mortgage rate jumped a quarter point to 6.75 percent today. But that is still a full percentage point lower than a year ago. As mortgage rates have been falling, refinancing has been soaring. But will consumers save that extra money or spend it? That's really what we were talking about.
Lisa Leiter has the story.
(BEGIN VIDEOTAPE)
JACK CERAULO: You guys handle it from there.
LISA LEITER, CNN CORRESPONDENT (voice-over): Jack Ceraulo is working the phones more than he ever has in his 22 years in the mortgage business. In his office, refinancings are running 500 percent above a year ago.
CERAULO: I have never seen it this busy. The appraisers that could normally have a turnaround time from two to three days are backed up two weeks. The title companies are just filled. They can only handle so much. There's so many hours in the day.
LEITER: $1 trillion worth of mortgages are expected to be refinanced this year, outpacing 1998's record of $750 billion. Refinancings have soared as mortgage rates have plunged. The average 30-year fixed rate loan dropped to a record low of 6.42 percent two weeks ago.
DOUG DUNCAN, MORTGAGE BANKERS ASSN.: Well, let's suppose you took out a home purchase loan in 2000. The average of $165,000 was kind of average loan size at 8.1 percent. Now you could refinance today at 6.5 percent. The difference in your monthly payment is $180 a month.
LEITER: So where will that extra pocket money go? According to the Federal Reserve, during the last refi boom in 1998, 45 percent used it to repay other debts. 40 percent for home improvements. And the rest for consumer spending and other investments. Fannie Mae estimates that those who spend the extra cash will add about a percentage point to GDP this year.
DUNCAN: The refinancings will play a part in keeping this recession short and mild. It's already boosting the economy now, but it will boost it more in 2002.
LEITER (on camera): For those who have yet to refinance, economists say mortgage rates may have hit their lows. But they're not likely to spike anytime soon either. And most outstanding mortgages are at a rate above what's being offered right now.
Lisa Leiter, CNN Financial News, Chicago.
(END VIDEOTAPE)
HOPKINS: Verizon says it will offer voluntary buyouts to its employees. The nation's number two telecom company says it's managed to prevent layoffs of nearly 20,000 workers through cut backs in overtime, offers of early retirement, and its current decision to offer these buyout packages.
Shares of Chiron dropping nearly nine percent, after the drug maker said its new therapy to fight the drug disease Sepsis failed in Phase III trials. Sepsis is a dangerous bacterial infection that has proven difficult to treat with available antibiotics.
Meanwhile, Eli Lilly today received FDA approval for it's own sepsis drug. It's called Xigris.
And just ahead on MONEYLINE tonight, Enron's fight for survival. Investor confidence plunges again and with it the stock price. We'll take a look at the energy company's ability to stay in business.
ANNOUNCER: After the break, Jan is joined by Rik Kirkland, managing editor at "Fortune" magazine.
(COMMERCIAL BREAK)
HOPKINS: A new twist tonight for Philip Morris and its choice of "Altria Group" as a new name. It turns out Altria is already being used by a health care company. Its president, Warren Smedley, said today he was troubled by the proposed name change.
Smedley said, "It's obviously of great concern to a health care business to have a big tobacco and alcohol company wish to adopt an identical name." Altria is now trying to block Philip Morris from using the name. Philip Morris says it has thoroughly researched the use of "Altria Group" and is confident it will not be confused with other businesses. We'll see. Beleaguered energy company Enron today received an extension to debt repayment and secured an additional round of credit. But that did little to calm investor fears about the company's precarious financial position. Enron shares fell again today, down nearly $2, losing more than a quarter of its value today. Goldman Sachs dropped it from its recommended list.
Enron was once a shining star on Wall Street, a widely held stock offering strong and steady returns for investors. But over the past year, investors have lost close to $60 billion, much of that in the past month alone. Despite the problems, Enron said a buyout by rival Dynegy is still on.
And so how likely is it that deal to go through? For the some answers, we're joined by Rik Kirkland from "Fortune" magazine.
94 percent decline in this stock this year. And we thought the Internet bubble was over and had broken. This is unbelievable.
RIK KIRKLAND, "FORTUNE" MAGAZINE: It's the great bubble stock -- it's turning out to be Enron. Who would have thought?
HOPKINS: Now do you think that this merger is actually going to go through?
KIRKLAND: Well, you know, the honest answer is nobody knows, but my advice in these kind of tricky deals is to never mind what the people say. Look at that great polling mechanism, the market.
Dynegy basically offered about $11 bucks a share when they valued this deal to Enron. The market's now down to $5. Now mostly when there's a merger, you see the price hovering about 10 percent apart from the offering price because the arbitrageurs, the guys that get paid to figure out how to make money on these deals, you know, bid the price up. They're not buying. They're saying this dog isn't going to hunt.
HOPKINS: Well, and Dynergy is also down.
KIRKLAND: Yes. Now the market's very skeptical that this deal's going to go through.
HOPKINS: If the deal doesn't go through, can Enron survive, do you think?
KIRKLAND: I frankly don't think so. I think they are so wounded that I think their last best hope is to get this deal done with Dynegy. And if they can't, it's hard to see how they can avoid Chapter 11.
HOPKINS: But it's really unbelievable. Every day, there's some other big problem that emerges. Are there more that we don't know about yet?
KIRKLAND: We don't know, Jan. Everybody's trying to figure this out. We're trying to figure this out at "Fortune" and all our competitors are, too. We don't know the answers yet. But it just -- you know, as you say, this week we woke up on Monday morning and they announced in their latest quarterly filing that there's this $690 billion debt that neither party knew about last week. It's due a week from Monday. Whoops! So it makes you worry there's more like that.
HOPKINS: And it is possible, with the stock collapsing and cash disappearing basically, that it just all -- the house of cards kind of comes down.
KIRKLAND: It just keeps feeding on itself. And that's what's happening. There's a huge amount of leverage in this company, a huge amount of debt. And as long as you believe, you know, you can live with that. But once you start having doubts, it begins to fall apart. And that's the question is the financing's going to...
HOPKINS: This is definitely the downside of leverage.
KIRKLAND: Absolutely.
HOPKINS: Especially the oil market has fallen apart as well.
KIRKLAND: Right. It's a disaster.
HOPKINS: Now your magazine is doing a lot of work on Saudi Arabia. There is a lot of talk about Saudi Arabia being the next Afghanistan.
KIRKLAND: Right.
HOPKINS: You don't think so. Why not?
KIRKLAND: Well, the next Afghanistan in a sense that, you know, will it be in the news and will it be in trouble. It's probably better to call it the next Iran. You know, is Saudi Arabia which is a -- you know, has a reputation for -- there's been a lot of stories recently suggesting it's corrupt repressive, and there's this concern about rising religious fundamentalism, which is the formula, of course, that brought down Iran.
So we asked one of our senior correspondents Bill Powell to go over there. And he's been there for a couple of weeks. And his basic answer is while Saudi Arabia has big problems which we've become very aware of in the last few weeks, it's not going to be another Iran.
HOPKINS: So we'll wait to see the story.
KIRKLAND: Exactly.
HOPKINS: Thanks, Rik Kirkland, the managing editor of "Fortune" magazine. Thanks for joining us.
(PREVIEW, "WOLF BLITZER REPORTS")
HOPKINS: Coming up next, at look at your e-mail and a look at what's coming up tomorrow, Thanksgiving.
(COMMERCIAL BREAK)
HOPKINS: Now for a look ahead. As you know, tomorrow is Thanksgiving and that means the markets are closed. For Friday, markets close early. The Chicago Board of Trade at noon central time, the New York Stock Exchange and the Nasdaq marketsite both close at 1:00 p.m. Eastern.
And tomorrow, be sure to tune in to our special edition of MONEYLINE, life after September 11. We'll address several topics, including the economy, the markets, the security of our nation, and fighting terrorism. That's tomorrow evening, 6:00 p.m. Eastern.
Now it's time for a look at some of your thoughts. With everyone from local officials right up to the President calling for normalcy during these difficult times, some of you think that it's a little hypocritical to keep one of Washington's top attractions, the White House, closed to the public over the holidays.
Debra Grossmann writes, "Why doesn't the White House feel comfortable with its security measures? Yet, we're supposed to trust the Feds or airport security systems."
The White House says the security measures are appropriate for a nation at war. Some pre-screened groups will still be able to visit the executive mansion.
Watching the daily White House briefings on CNN, John Grant in Nova Scotia, Canada says he can't believe all the questions being asked of press secretary Ari Fleischer on the issue. John writes, "I think there are many more important questions to be asked. Public tours of the White House are not a major concern." It is a big concern for the local economy in Washington, D.C., however, especially when you consider the White House is a major draw. D.C. officials estimate that city has lost $10 billion each day since September 11.
After Microsoft reached a deal to settle more than 100 private lawsuits by giving more than a billion dollars to public schools, Mark Kowalski writes, "At the end of the day, the government needs to learn some lessons of free market economics and stop regulating and interfering in the marketplace."
Send us an e-mail. Our address is moneyline@cnn.com. Please don't forget to include your name and your hometown.
That's MONEYLINE for this Wednesday evening. Thanks for joining us. I'm Jan Hopkins in for Lou Dobbs. Good night from New York and Happy Thanksgiving.
"WOLF BLITZER REPORTS" with John King begins right now.
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