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CNN Live At Daybreak

America's New War: What Investors Face at the Markets

Aired September 18, 2001 - 07:03   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.
PAULA ZAHN, CNN ANCHOR: Time to get back to what is happening here in the United States on the economic front. Joining me right now is Andy Serwer, who is with "Fortune" magazine, to give us a better idea of what investors might face today on the market. Traders yesterday were not expecting a great day, they didn't get one. What are they going to get today?

ANDY SERWER, "FORTUNE" MAGAZINE: Well, as you said, Paula, people were not thrilled. They couldn't have been terribly happy having the market drop seven percent. On the other hand, I think there was a huge sense of relief that the system worked, that they were back up, that they were back at work. There were some trading problems here and there and my understanding is that ordinary investors had some backups at Charles Schwab, that kind of thing. That's to be expected.

But we're going to be seeing some trading today that I think is not quite as heavy. The futures are down a little bit this morning. The Dow is down 35 points, the Nasdaq is down 12 points. Trading overseas in Japan was actually pretty nice. The Nikkei was up a percent or two there. European trading, stocks were down.

I think what you're going to see today is the market calm down a bit. I think stocks may not go up today, but I don't think you're going to see a precipitous drop.

ZAHN: Where you saw some of the largest drops yesterday was in the airline industry. Let's quickly review what is going on there. Northwest is going to announce an unspecified number of layoffs later this week. U.S. Air expects to lay off some 11,000 employees. Continental already announcing furloughs of some 20,000 people. We know that the president has indicated that he would like Congress to move forward on a bailout plan but the president hasn't confirmed or not whether he'll go ahead with the airlines' request for some loan guarantees.

SERWER: Yes, I mean I don't think that any industry is -- has been more affected by this terrible tragedy than the airline industry. I don't think it's an overstatement to say that it was a bloodbath yesterday on Wall Street as far as those stocks went. They were down 40 percent or more. Southwest Airlines, which helped up pretty well in the end, took a huge beating. United, Delta, American, across-the- board. This is an industry that is in terrible flux right now. Washington is going to be heavily involved in their business and it will never be the same again. I don't think that's an overstatement.

ZAHN: Tell me a little bit about the, in the end of the day the reaction to the half point interest rate drop yesterday. Did it do anything, the eighth drop so far this year?

SERWER: Right. Exactly. It's always hard to say. I mean clearly it didn't help the market go up. It may have prevented the markets from going down further. It's difficult to say.

I think what's impressive, though, here on a -- in a global sense is European bankers cut rates there and the Bank of Japan just cut rates this morning. So I think it's impressive that we're seeing sort of a globally concerted effort by central banks to help this crisis. It's perceived as a global problem and global bankers are responding.

ZAHN: If you would, stand by. We're going to check in with you throughout the morning, particularly as the markets open at around 9:30 this morning.

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