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Your World Today

Dow on Roller-Coaster Ride After Fed Slashes Rates; European Stocks Yo-Yo in Volatile Trade; Israel Allows Fuel, Medical Supplies to Gaza

Aired January 22, 2008 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ROSEMARY CHURCH, CNN INTERNATIONAL ANCHOR: Financial free-for- all. Some world markets plunge, others recover as the U.S. Federal Reserve steps in hoping to ease the crisis.
HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: And I'm Hala Gorani at the World Economic Forum in Davos, Switzerland. Fears of a market meltdown and the Fed's aggressive rate cut means decisionmakers have a lot to talk about this week.

JIM CLANCY, CNN INTERNATIONAL ANCHOR: Plus, border battles. Israel easing its closure of Gaza, but violence erupts in Egypt's gateway to the beleaguered territory.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Hillary, you just spoke...

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Barack, I did not...

OBAMA: You just spoke for two minutes.

CLINTON: ... I did not say anything about Ronald Reagan. You said two things. You talked about admiring Ronald Reagan.

OBAMA: You just spoke -- Hillary, I'm sorry.

CLINTON: And you talked about the ideas of the...

(END VIDEO CLIP)

CHURCH: Getting personal. The Democratic presidential candidates sharpen their barbs in a high-stakes debate.

It's noon on Wall Street, 7:00 p.m. in Gaza City.

Hello and welcome to our report seen all around the globe.

I'm Rosemary Church.

CLANCY: I'm Jim Clancy.

From New York to London, Davos to Myrtle Beach, South Carolina, wherever you're watching, this is YOUR WORLD TODAY. CHURCH: Well, the Federal Reserve takes emergency steps to shore up the sinking U.S. economy, but will it stop the bleeding on Wall Street?

CLANCY: An important question. The world watching to see if it can find an answer to that. The Dow's roller-coaster ride today looking like it's still a roller-coaster after a dramatic early plunge.

CHURCH: That's right. Now, before the opening bell, the Fed took the unusual step of slashing interest rates between meetings. Very unusual. It cut two key rates by three-quarters of a percentage point amid fears the U.S. could slip into recession.

CLANCY: Now, those worries also sent stock markets into another tailspin right around the globe. You see there the U.S. markets down 183.

We're covering all of this from every angle. Susan Lisovicz is there at the New York Stock Exchange. Jim Boulden is in London. Brianna Keilar at the White House. Hala Gorani at the World Economic Forum in Davos.

Let's start though with Susan.

Susan, what does this -- does this surprise and very aggressive rate cut say about at least the Fed's view of the economy? Is the Fed panicking?

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Oh, the Fed is worried. It's very clear that it has heard and seen all the carnage on Wall Street and heard all of the damage reports, whether it's from the housing sector, whether it's from the retail sector, whether it's the unemployment rate jumping up in the last month. They've seen it and they've acted.

The last time the Fed was this aggressive was on September 17, 2001. That is the day that the stock market opened after the terrorist attacks the week earlier.

So you know the conditions then, and the Fed is saying that it needed to take this action. And it took an action -- by the way, 75 basis points is extremely aggressive. We have not seen a move like this, a rate cut, since 1984.

Having said that, the markets, well, we tried to get a rally. The Dow was as low as -- it was down at its lows, I should say, 463 points. Right now we're seeing a loss of 156 points.

There was a 55-point deficit. That was the best the Dow could do -- the bulls could do, I should say. And it's starting to roll over again.

There is some buying, but there are a lot of concerns over there. And I just wanted to mention, one of the concerns that investors and traders have been saying today is this is a global sell-off. This is the -- the U.S. is the world's biggest economy. The U.S. sneezes, everybody else catches a cold. It is an old expression.

They wanted to see -- some investors were saying we wanted to see some action from the European Central Bank, maybe a rate cut there. And ECB has so far not responded -- Jim.

CLANCY: Susan Lisovicz live from the New York Stock Exchange -- Rosemary.

CHURCH: All right. Well, U.S. President George W. Bush will meet with congressional leaders in a couple of hours from now to try to put together an economic stimulus plan to shore up the U.S. economy.

Brianna Keilar is standing by at White House with more.

Brianna, the president's last economic stimulus plan didn't work, so what's he going to pull together this time, do you know?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, at this point an agreement is not quite in the works yet, but the treasury secretary, Henry Paulson, the Bush administration's chief negotiator with Congress on an economic stimulus package, is actually up on Capitol Hill at this hour working with Democrats and Republicans in both the House and the Senate. This is ahead of a meeting that President Bush is going to be having with those congressional leaders later here today at the White House.

Paulson reiterating this morning the need to come to a swift agreement on this.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: Time is of the essence here, and the president stands ready to work on a bipartisan basis to enact economic growth legislation as soon as possible. I'm optimistic that we can find common ground and get this done long before winter turns to spring.

(END VIDEO CLIP)

KEILAR: Now, details of this agreement that is sort of in the works at this point are very unclear. Congressman Roy Blunt, a leader up on Capitol Hill, a member of President Bush's Republican Party, said they need more time to come to this agreement. But this is a meeting that President Bush is having today with congressional leaders, a meeting that has actually been scheduled for some time.

It was actually put in place so the president could brief members of Congress on his recent Mideast trip. However, the economy, of course, is going to be an issue. But the White House not overemphasizing how much the economy will play in these talks this afternoon -- Rosemary.

CHURCH: All right. We'll see what comes out of it.

Brianna Keilar at the White House. Thanks so much for that -- Jim.

CLANCY: Well, while U.S. investors are looking a little bit nervous today, and it's being reflected on the Big Board there on Wall Street, elsewhere around the world that's not always true. In fact, some places, they're not just breathing a sigh of relief, they have got some smiles on their faces.

Let's cross over to London and Jim Boulden -- Jim.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: That's right, Jim, because the European markets opened today, of course, following on those steep falls in Asia. So we suffered in the morning because of that, but then we had the interest rate cut from the U.S. And even though it wasn't followed by any interest rate cuts here, that certainly did help the sentiment.

Let's look at the closing numbers here in Europe. We had the FTSE 100, the main share index here in London. It was up nearly 3 percent, closing the day higher, 2.8 percent.

Now, the DAX in Germany and Frankfurt did close lower, down about a third of a percent. But it is a smaller index with only 30 big industrial shares. So it doesn't move as much as some of the other main indices. The CAC in Paris was up over 2 percent, and also the SMI in Switzerland up over 2.5 percent.

We did see banks, we saw homebuilders recovering, we saw some of the oil shares recovering. Many of the shares that maybe some people thought fell too much on Monday. And then again, Tuesday morning, following on from Asia, but did recover as the day went on -- Jim.

CLANCY: All right. Jim Boulden there reporting live from London.

Thanks, Jim.

CHURCH: Well, titans of the corporate world are watching the market turmoil from the Swiss Alps. The World Economic Forum is set to begin in Davos, and own Hala Gorani is there. She joins us live with a preview.

Hala, just how tense are people there? What are you hearing?

GORANI: Well, this is just really starting. The official forum starts tomorrow. And you know, when the economy isn't doing well, it's pretty much all people can talk about.

We're in the Swiss Alps. Very high-profile, VIPs will be gathering over the next few days -- Robert Zoellick of the World Bank, Condoleezza Rice, Tony Blair, the CEOs of major corporations.

The big question on everyone's mind, first of all, are we sliding toward a global recession? Secondly, will this Federal Reserve aggressive rate cut of three-quarters of a point, which we haven't seen since the mid '80s, have an impact? We're seeing Wall Street there still in the negative, and that is what is going to be on everybody's mind. That question, how do solve the issue, how to restore consumer confidence.

As you can see there on your screen, it is cold. It was snowing in Davos. There is security, and everybody here, journalists, are expecting these VIPs and these decisionmakers. And the world will be looking at them as well for answers.

We're going to be following that. And we'll be speaking with Michael Elliott of "TIME" magazine a little bit later in the show. He covers Asia for "TIME" magazine, where that market meltdown happened over the last 24 hours.

So we'll bring you a lot more from right here in Davos.

For now though, back to you, Rosemary.

CHURCH: All right. We'll be watching out for you.

Our Hala Gorani there in Davos.

Thanks so much.

CLANCY: All right. Now we're going to take you to a part of the world where they're not talking about a recession, they are talking about a total collapse. Gaza.

More clashes erupting between Palestinian protesters and this time, Egyptian security forces. It all happened at a border crossing between Gaza and Egypt.

Although Israel temporarily eased that blockade that it imposed last week following Palestinian rocket attacks it wants to stop, some food, some fuel, some medicine got into Gaza. But the frustration over the situation runs very high.

Ben Wedeman joins us now from Gaza with more details.

Ben, what's happening there on the ground?

BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: Well, it's a depression here, not a recession, Jim. The situation still fairly grim.

If you look behind me, Gaza City is more or less dark. This, despite the fact that today Israel did allow in a limited shipment of fuel for the power plant. But it takes a while to get that power plant up and running, and this part of town is still dark.

I can still hear the hum of generations below me. But the most dramatic scenes in Gaza today were those demonstrations you mentioned that turned into clashes on the border between Egypt and Gaza. There, hundreds of women waving Hamas banners, crowded around the main gate between Gaza and Egypt, demanding that the Egyptians open that gate and allow sick Gazans to leave the strip to go for medical treatment elsewhere.

There were scenes where, in some instances, it appears there were exchange of gunfire, The Egyptians fired some tear gas as well.

According to Palestinian medical sources, at least 60 people were injured in that -- in that clash. They were hit by rocks, sticks. There were dogs used by the Egyptian riot police, and, of course, there were some gunfire wounds.

Now, regarding the fuel situation, Israel did, as I mentioned, allow in some fuel, enough to allow the power plant here to run for about a day and a half. They say they will eventually send in more fuel, enough to run the plant for one week, but the situation still fairly difficult. They also allowed in some gas -- cooking gas as well, and a small shipment of medicine -- Jim.

CLANCY: Ben, as we look at this, you have to see it in a political context. We know that.

What is Israel trying to achieve in this standoff? What is Hamas really trying to do?

WEDEMAN: Well, what Israel's trying to do, as it said many times, is put pressure on Hamas to stop the firing of rockets from Gaza into Israel. Now, the Palestinian perspective is a little different.

Many people here in Gaza are convinced that the whole purpose of the Israeli economic and military measures against Hamas is to make life so miserable that the people overthrow Hamas. But people will tell you that here in Gaza, Hamas is simply too strong. That if Israel wants to destroy Hamas, it's going to have to send in its troops and do the job itself -- Jim.

CLANCY: Ben Wedeman reporting live from Gaza.

Thanks, Ben.

CHURCH: Well, a stiff sentence for Jose Padilla in his terrorism trial. A U.S. district judge sentenced him to more than 17 years in prison Tuesday. Padilla was once accused of plotting with al Qaeda to blow up a radioactive dirty bomb, but after being held for three and a half years, the 37-year-old Muslim convert was convicted on terrorism conspiracy charges that didn't mention the initial dirty bomb allegations.

All right. Still ahead on YOUR WORLD TODAY...

CLANCY: Can't we all just get along? Apparently not.

(BEGIN VIDEO CLIP)

CLINTON: Senator Obama, it is very difficult having a straight- up debate with you because you never take responsibility for any vote. And that...

(END VIDEO CLIP)

CLANCY: Verbal attacks and counterattacks between Democratic candidates in the final debate before Saturday's primary in South Carolina.

CHURCH: And the nominees are. Films about a cold-blooded killer and a cold-hearted tycoon among those in the running for the coveted Oscars.

CLANCY: And 35 years on, the issue still hotly debated. This, the anniversary of a landmark decision by the U.S. Supreme Court on abortion.

(COMMERCIAL BREAK)

(NEWSBREAK)

CHURCH: Now, the turbulent state of the U.S. economy is likely to dominate campaign stops today, of course, as the Democratic presidential candidates fight to win over undecided voters in South Carolina. During last night's debate, the war of words between Hillary Clinton and Barack Obama took a nasty turn, leaving John Edwards out in the cold.

Candy Crowley reports.

(BEGIN VIDEOTAPE)

OBAMA: Wait. No, Hillary, you just spoke...

CLINTON: Barack, I did not -- I did not say anything about Ronald Reagan.

OBAMA: You just spoke for two minutes.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): You think this race isn't personal? Then you didn't watch.

OBAMA: While I was working on those streets, watching those folks see their jobs shipped overseas, you were a corporate lawyer silting on the board of Wal-Mart.

CROWLEY: They read their APO research, used it frequently, and never gave an inch.

CLINTON: I was fighting against those ideas when you were practicing law and representing your contributor, Rezco, in his slum landlord business in inner city Chicago.

OBAMA: No, no, no, no, no, no, no.

CROWLEY: Also, John Edwards was there.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: I also want to know in behalf of voters here in South Carolina, this kind of squabbling, how many children is this going to get health care? CROWLEY: So, first victim, that high-minded campaign on the issues. And even when they did get down to it, hostilities simmered, each accusing the other of distorting the truth.

An economic stimulus plan, Obama said Clinton changed hers to match his. She said it wasn't so. Fiscal responsibility, she said he can't pay for his plans. He said it wasn't the truth.

On health care...

EDWARDS: There's nothing wrong with us arguing about this. But -- but I believe that there is not a single man, woman and child in America who's not worthy of help.

CROWLEY: It was two on one. Edwards and Clinton have health care plans that mandate insurance for everyone, with government subsidies for those who can't afford it. Obama's plan pivots on offering the same subsidies but driving down costs so people can afford health insurance.

OBAMA: You mandate on families to buy health insurance that they can't afford. And if you don't buy it, you fine them or in some other way, take money from them.

CROWLEY: The Clinton campaign thinks this is a winner. It's one of her favorite subjects.

CLINTON: I think that the whole idea of universal health care is such a core Democratic principle that I am willing to go to the mat for it.

CROWLEY: But mostly, this was a debate dominated by the dynamics of a tight race with big stakes.

CLINTON: Senator Obama, it is very difficult having a straight- up debate with you because you never take responsibility for any vote.

CROWLEY: And two candidates with row nerve ending.

OBAMA: These are the kinds of political games that we are accustomed to.

CLINTON: Wolf, wait a minute. Wait a minute. Just a minute.

CROWLEY: Candy Crowley, CNN, Myrtle Beach, South Carolina.

(END VIDEOTAPE)

CLANCY: As the sparks flew there, you can imagine the Democrats got a lot of attention. But that's not to say that the Republicans aren't out there as well.

Those candidates crisscrossing the delegate-rich state of Florida this hour. Former New York mayor Rudy Giuliani banking almost his entire campaign on this state after skipping some of the previous primaries. He's wondering about that decision. John McCain is in Pensacola after pitching his message to Cuban- Americans down in Miami. Mike Huckabee's going to be heading to Gainesville. He had a campaign stop right here in Atlanta.

Well, meantime, Nevada caucuses winner Mitt Romney also canvassing for votes out there in Florida, targeting retirees with his economic plan.

As Mary Snow reports, his record in Massachusetts may come back to haunt him.

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: That's right. I'm running for president.

MARY SNOW, CNN CORRESPONDENT (voice over): Republican presidential hopeful Mitt Romney introducing himself to children, attending a Martin Luther King Day parade in Jacksonville, Florida. To try and grab the attention of people who actually can vote in this state, he's introducing himself as a former businessman who can handle rough times in the economy.

ROMNEY: I spent my life in the private sector. I spent my life helping create jobs.

SNOW: But as he touts his economic experience, Romney is finding himself answering questions about why more jobs weren't created in Massachusetts while he was governor. He responds by saying Massachusetts isn't growing as fast as other states.

Romney has a lot riding on his economic message. It helped him win in Michigan, where the auto industry is suffering. That win kept him in the presidential fight after two big setbacks in New Hampshire and Iowa. Voters in Nevada, where he won, say the economy was key, and the issue is expected to take center stage in Florida.

LANCE DEHAVEN-SMITH, PROFESSOR, FLORIDA STATE UNIV.: I think the economy will be the major issue. Florida's got a struggling economy now, and we have a population that is somewhat cost-sensitive.

SNOW: A large population of seniors live in Florida, many on fixed incomes who are worried about taxes and inflation. Romney is tailoring his message to them with a proposal.

ROMNEY: Anybody in the workforce who is 65 years of age and older, they'd have no payroll tax. Either by their employer or by themselves.

SNOW: Among other things, Romney proposes tax rebates for people in the lowest tax bracket, and incentives for corporations.

(on camera): As Romney makes his case here in Florida, the nonpartisan group Massachusetts Taxpayers Foundation is questioning his economic record while he was governor, saying Massachusetts only did better than a handful of other states. But the Romney camp says that it was Romney who pulled Massachusetts' economy out of a ditch.

Mary Snow, CNN, Orlando.

(END VIDEOTAPE)

CHURCH: And you are watching YOUR WORLD TODAY.

Coming up, the Oscar nominations are announced.

CLANCY: That's right. And this year's nominees have a distinctive art house flare, we can say. But will they actually show up at next month's ceremony?

We're going to head to California and get a live report.

CHURCH: We'll do that.

Plus, we've seen the plunging numbers, heard the grim economic forecast and fears of a recession. But what's the mood on the street?

We'll hear from you, the people, when we return.

Stay with us.

(NEWSBREAK)

(COMMERCIAL BREAK)

JIM CLANCY, CNN ANCHOR: Wherever you are watching, across the globe this day, you are with CNN international and YOUR WORLD TODAY. I'm Jim Clancy.

ROSEMARY CHURCH, CNN ANCHOR: That's right. I'm Rosemary Church. Here are some of the top stories we've been following.

The Federal Reserve has taken emergency steps in a bid to stop the U.S. economy from sliding into recession. In between its regular meetings, very unusual, it slashed two key interest rates by an aggressive three-quarters of a percent.

CLANCY: Even so, the Dow took a deep plunge after the opening bell but stocks on Wall Street making up a little bit of ground after falling more than 460 points. Blue chips are now down about 147.

CHURCH: Israel eased its block aid of Gaza today following Palestinian rocket attacks, tensions remain high. Scuffles erupted between Palestinian protesters an Egyptian security forces at a border crossing. Egypt has severely restricted access to Gaza following Hamas's takeover of the territory.

CLANCY: A U.S. district court judge sentenced Jose Padilla to more than 17 years in prison on Tuesday. Padilla was convicted on terrorism conspiracy charges that did not mention initial allegations of plotting with al Qaeda to blow up a radioactive dirty bomb.

CHURCH: Well, if you're trying to get a hold of your stockbroker and no doubt, a lot of people are this day, you might not find him in good humor I suspect. Richard Roth joins us now to check on the mood at the NASDAQ stock exchange. Richard?

RICHARD ROTH, CNN CORRESPONDENT: Yes, the Times Square is normal, it is cold, there are taxis, life goes on despite the roller coaster ride of this stock market. Here outside the NASDAQ electronic trading marketplace, a few people peering in to see if they can discern what's happening with their money. Looking at financial monitors and financial channels, CNN, to see what's exactly going on, not getting much comfort, though prices have somewhat stabilized. I asked some people how concerned they are about their money.

UNIDENTIFIED FEMALE: I'm definitely concerned because I know my retirement fund is completely deteriorating daily, just dropping. But that's about it.

UNIDENTIFIED MALE: I think these are trying times in the credit markets. We are beginning to see the aftermath of some of the early indications that the banks are hurting and that they expose themselves to too much leverage and debt.

UNIDENTIFIED FEMALE: It is a give-and-take situation, because even though it is like down now, the chances are it could go back up again. So, no, I'm not afraid of it. Everything changes.

ROTH: As opposed to the technology laden NASDAQ market, most of the human trading goes on further downtown, the New York Stock Exchange. I did talk to one man from Ireland who was still smiling. He said he's made so much money here because of the low U.S. dollar compared to the euro, that he's more than made up for his stock market losses. I don't know if that's exactly true, but he seemed pretty pleased despite the falling prices I notified him about. Back to you.

CHURCH: The luck of the Irish I guess. Richard Roth, thanks very much.

CLANCY: Leaders from the largest companies all across the globe are watching the market roller coaster from Davos, Switzerland where the World Economic Forum is going to be under way shortly. Not yet tonight, tonight is the cocktail parties. Once again, Hala Gorani is there in the snow and joins us from Davos about the mood there at that high-power forum.

HALA GORANI, CNN CORRESPONDENT: One of many cocktail parties, I'm sure. But it is also serious stuff here in Davos, Switzerland. Global, political and corporate leaders are going to have a lot to talk about with fears of a global meltdown and that aggressive fed rate cut. Here's a preview of what to expect.

(BEGIN VIDEOTAPE)

GORANI: It is a quaint ski resort in the Alps. The snow is falling and skiers shuffle out of the train at Davos station. But the panic on world markets and fears of a real economic meltdown are reverberating all the way to the small Swiss town because this is the site of the annual World Economic Forum where Central Bank governors and CEOs gather to talk about world growth. An early arrival, this American CEO, says it will be hard to get away from talk of a recession here.

AUGIE FABELA II, CEO, VIMPLECOM: I think there will be a big challenge to keep focus on what the themes were originally with all this global market turmoil.

GORANI: The Davos forum doesn't officially start until tomorrow. Big names like Condoleezza Rice, World Bank Head Robert Zoellick, Tony Blair and many others, will fill these rooms. There are last-minute preparations. Arranging glasses for the VIPs and laying floor for the panel discussions. But already, the buzz in the hallways is about how we got here and whether the Federal Reserve's aggressive three-quarter point rate cut will be enough to stop a meltdown.

EDMUND CONWAY, THE DAILY TELEGRAPH: The fact that people were borrowing in order to spend and the savings ratio, the rate at which people were saving dropped to a record low, was basically at 0%. Meant people were living on borrowed time. Now, unfortunately, that's coming back to haunt them.

GORANI: The curtain is rising. In the next few days the world will look to its most powerful decision makers for answers.

(END VIDEOTAPE)

Joining me now, Michael Elliot, editor of TIME International for more on what to expect here at Davos. Is this fear of a global meltdown, the fed rate cut as well? Is it going to hijack discussions?

MICHAEL ELLIOT, EDITOR, TIME INTERNATIONAL: Oh, utterly. I don't think there is any doubt at all. People kind of prepared for the conference last week thinking the sheriff is going to be here, Gordon Brown is going to be here, Tony Blair was going to talk about Middle East peace. And we've had two days of mayhem in the markets in Asia. I got in last night. Even in the buzz last night people were all a twitter about the market. This morning in the U.S. The fed issued 75 basis-point cut.

GORANI: You notice when the economy isn't doing well, it is all anybody talks about.

ELLIOT: Particularly here. Particularly here. There are ten people -

GORANI: Because it affects everyone.

ELLIOT: Well, absolutely. Also all the financial morphs and shakers are here. There are ten guys here who can do a $150 billion stimulus out of their back pocket without noticing it. There is an enormous critical mass in people interested in the global economy here this week.

GORANI: Might we see them coming together, the Central Bank governors and Central Bank heads and saying, look, this is a crisis situation. The ECB getting involved, we also have to cut rates.

ELLIOT: I think what's more likely is you'll get back room talks seeing whether they can rescue the world trade. That's the feature of Davos. Trade ministers get together and see if they can push that forward. I think in terms of more coordination by the central banks, my guess is that we will discover by the end of the day in the U.S. that's not needed because it looks as if the market's going to end up a little down, but by no means with a crash.

GORANI: All right. Let me ask you this. 75 basis points. Does that mean panic or does that mean people will be reassured?

ELLIOT: So far, it looks as if people will be reassured. Don't forget, this is one day, this is a snapshot of the markets over one day. And what happens today doesn't tell us about whether the U.S. economy is heading into a recession, whether there is systemic problems in the economy. They will need a lot more than one day to sort that out.

GORANI: Michael Elliott, TIME International, thanks so much. That's the big question to all of our viewers, also, homeowners, those who are worried perhaps they might lose their homes, those who are worried they might lose their jobs. Everybody who is watching the market tumble, who is watching and listening to the Federal Reserve, has many questions and hoping for some answers. Back to you.

CLANCY: All right, Hala. Looking for -- Hala will be with us all week long talking to us about the economic news coming out of Davos. Hala, great to have you there. I bet it is a lot warmer here. Thanks.

Well, what do you make -- we're going to take you live to the White House right now. Dana Perino, the spokesman.

DANA PERINO, HOUSE SPEAKER: Also on Friday, the president is going to travel to White Silver Springs, West Virginia where he will make remarks at the 2008 Congress of Tomorrow luncheon. This will be open for correspondents and pool for cameras. More details from our team later.

CLANCY: She's doing some housekeeping here. We're going to come back. There was some talk between Bush and his economic advisory team there at the White House. We'll bring you some details on that in the minutes ahead right here on YOUR WORLD TODAY.

For now we'll take a short break. Be back right after this. Don't go away.

(COMMERCIAL BREAK)

CLANCY: You're looking at the big board at the New York Stock Exchange. You see the Dow Industrials down 165. At one point they'd been down more than 460 points. That was really very close to the opening bell. It recovered somewhat. Of course before the markets even opened, the fed announced a three-quarter percent rate cut. That for the federal funds rate, the rate that the fed loans money to banks. That will affect the prime interest rates and then consequently, all consumers. You see some stability returning back into the U.S. market. I mean being down 177, compared to 460 is something we can talk about midday at least as stability. Where is it going from here? We can't be sure but we'll keep you posted.

You're watching YOUR WORLD TODAY. This is CNN International.

CHURCH: And a warm welcome back to you all. We are seen live in more than 200 countries and territories across the globe.

Well, republican presidential contenders had descended on Florida for their next showdown; the primary election next Tuesday. Former New York Mayor Rudy Giuliani largely wrote off the first six republican contests to concentrate on Florida. On Monday, he talked about what's on everyone's mind, the economy.

(BEGIN VIDEO CLIP)

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: America should embrace a global economy. I'm not worried so much how we buy from overseas. What I care about is how much we sell overseas.

(END VIDEO CLIP)

CLANCY: All right. Today the 35th anniversary of the U.S. Supreme Court decision that guaranteed a woman's right to an abortion. But the issue, to say it is hotly debated is an understatement. The new CNN Opinion Research Corporation poll indicates 24% of all voters consider abortion extremely important to their vote in this year's presidential election. U.S. affairs editor Jill Dougherty explains why.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, U.S. AFFAIRS EDITOR: It is just four blocks from the white house. But that doesn't make Planned Parenthood Federation's Washington, D.C. clinic any more secure. It provides health, reproductive services and abortions. And in today's America, that makes it a target.

KIRKLAND HAMMILL, PLANNED PARENTHOOD: There have been situations with health centers like ours where there have been bomb scares, actual bombs and people dying as a result.

DOUGHERTY: Just to get in here you have to go through multiple layers of security. This door, for instance, is made of bulletproof glass and you have to be buzzed in.

28-year-old Sara Brooks used to work with Planned Parenthood. She is now with a nonprofit organization. In this presidential race, she says health and reproductive rights are her top issues.

I mean this is a big issue to you?

SARA BROOKS, ABORTION RIGHTS SUPPORTER: Yes, definitely. I think it is difficult for women in my generation to understand what life was like before Roe V. Wade. I hope that we never have to learn the hard way.

DOUGHERTY: Roe Versus Wade is the landmark 1973 U.S. Supreme Court ruling that guaranteed a woman's right to abortion. The issue has been political dynamite ever sense, debated in coded language with words like "pro life" and pro choice." More than half of all Americans think abortion should be legal in all or most cases, according to a Pew Research Center poll taken two months ago. But among republican primary voters, almost two-thirds, 63%, believe abortion should be illegal in most cases. The Republican Party platform supports overturning Roe Versus Wade, and that's creating some uncomfortable situations for republicans like Mitt Romney who have changed their positions.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I believe that abortion should be safe and legal in this country. On abortion, I was wrong and I changed my mind.

DOUGHERTY: As New York Mayor Rudy Giuliani supported public funding of abortion, now he says he hates abortion and wants what he calls reasonable restrictions on it. Mike Huckabee believes if abortions were outlawed, doctors should be sanctioned, but not women, because they're victims. Democrats, for the most part, support a woman's right to choose abortion and expanded access to family planning services. Jennifer Drake, a 24-year-old client of Planned Parenthood, says she's trying to convince her friends this election really matters.

JENNIFER DRAKE, PLANNED PARENTHOOD CLIENT: You would be surprised at how many people don't feel like our rights are threatened. I feel like especially here in Washington, D.C., that it hasn't even been brought under our noses.

DOUGHERTY: On the 35th anniversary of Roe Versus Wade, Planned Parenthood's political arm announces a campaign for the November presidential election. Its goal, turning out 1 million voters who support abortion rights. Jill Dougherty, CNN, Washington.

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CHURCH: We are going to get more on how the abortion issue could affect the presidential race. But first, of course, we want to get to the economy and Bill Schneider is standing by, senior political analyst. He's in Myrtle Beach, South Carolina. Bill, so the economy first. Which of the presidential candidates are best positioned to take advantage of the situation in the economy now?

BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Hillary Clinton claims the economy is hers because of her husband's record when both he and she were --

Hello? Hillary Clinton claims the economy is her issue. Her husband had a strong record, the economy was booming in the 1990s. At least democrats called it a boom. Republicans would call it a bubble. But Hillary Clinton all the polls indicate that for democrats who are concerned about the economy, their votes are going to Hillary Clinton. On the republican side, Mitt Romney claims it is his issue. It is a little unclear that any of the republican candidates really benefits from a poor economy because republicans are inclined to say the economy is not so bad. But in the democrats' case, clearly it is Hillary Clinton's issue.

CHURCH: All right. Bill, as we were mentioning, we want to get on to the issue of abortion on the anniversary of Roe Versus Wade. How important is that issue on this day and in this presidential run- up to the election?

SCHNEIDER: There is a constituency. It's 10% or 12% of Americans, who care deeply about the abortion issue. Most of them -- most of them, not all of them, but most of them are antiabortion and they vote rather consistently republican. All the republicans except for Rudy Giuliani are antiabortion. And so if anyone but Giuliani gets the nomination, those people are likely to vote as they have in the past for decades for the republican candidate. Most Americans are actually supporters of abortion rights and they would not like to see Roe V. Wade overturned. The problem is they don't feel there is a threat to abortion rights at the moment. The Supreme Court has affirmed Roe Versus Wade about 15 years ago and so those voters don't feel there is an immediate threat. If they do feel that there is a threat, they get mobilized, they rally and they support, vote for a candidate who promises to protect abortion rights. It is a matter of a constituency that's antiabortion an always there, and a much larger constituency which votes the issue only when they feel threatened.

CHURCH: All right, lots to think about there. Bill Schneider, thanks so much.

CLANCY: All right. A short break but coming up, some of the most prized artworks in the entire world.

CHURCH: That's right. And the most coveted. Ahead on YOUR WORLD TODAY, the masterpieces are on view in London. We'll tell you why the spectacular exhibit almost didn't happen.

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CHURCH: Welcome back, everyone. Some incredible works of art are now on display in London after arriving there from Russia.

CLANCY: But getting these priceless pieces from one country to another required a complete change in British law.

CHURCH: CNN's Paula Hancocks explains.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT: Monet, Cesar, Van Gogh, Picasso, all in one spectacular exhibition. From Russia is in London, a collection of the some of the most famous masterpieces in the world. Many of these paintings were owned by just two wealthy Russian collectors. During and after the Bolshevik revolution of 1917, all of these works of art were confiscated by the state. Between them, collectors lost some 600 pieces and now their descendants want compensation.

ANDRE-MARC DELOCQUE-FOURCAUD, SHCHUKIN'S GRANDSON: We have been robbed.

UNIDENTIFIED MALE: This is my thank-you.

HANCOCKS: Moscow initially refused to allow the paintings anywhere near London for fear of legal claims of ownership. Only a swift change in British law allowed this exhibition to take place ensuring the paintings would all return to Russia. The curator does not understand the descendants' claims they are the rightful owners.

SIR NORMAN ROSENTHAL, CURATOR, ROYAL ACADEMY OF ARTS: I want to claim my property. I mean I find that whole history is history and in the end, you don't necessarily own the things of your grandfather.

HANCOCKS: The Royal Academy of Arts is just relieved the paintings are finally hanging on their walls. And not affected by the recent downturn in Anglo-Russian relations. Paula Hancocks, CNN, London.

(END VIDEOTAPE)

CLANCY: All right. Some art to get our minds off the markets. But you can't really on this day. A look at big board here before we go, seeing how it is doing this hour.

CHURCH: All right. There it is. It's been a nice rally considering what happened earlier in the day when it opened up. 460 points. People were in a panic but it looks like things are leveling off a little bit.

CLANCY: Everybody was running for the exits. The fed of course right before that, a key interest rate was dropped, federal funds charge they fall it, the loan the federal government uses to loan money to banks, down a full three-quarters of a percentage point. That affects the prime and you see here what might be the calming effect that has had on the market. But we aren't done yet. You can see what's happening, you've got a lot of people are moving into the market and they are buying up things. You see the -- over to the right, you can 587 million versus 850 million. That 800 million number is the number of stocks that are down. A lot of people, 580 million, going in there to buy.

CHURCH: And we're seeing a bit of recovery on the European markets, too. It is not over yet, as we say.

CLANCY: That has to be it for this hour for us. I'm Jim Clancy.

CHURCH: I'm Rosemary Church and this is CNN.

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