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CNN Live At Daybreak
America's New War: U.S. Economy Still Alive
Aired September 18, 2001 - 08:21 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: You're looking at an exterior shot of the New York Stock Exchange, where the market will open again today just about an hour and nine minutes from now.
That is exactly where we find Bill Hemmer right now, as he will be talking to some of those traders coming to work who probably have a giant case of whiplash from what they experienced on the markets yesterday.
What is it? The largest single drop ever on the Dow.
BILL HEMMER, CNN CORRESPONDENT: Relative to points -- indeed you're right, Paula; 684 points yesterday, about a 7 percent drop for the Dow Jones Industrial Average.
And, Paula, I can tell you yesterday -- normally traders do not talk to the media; they don't talk to reporters, because their companies simply will not allow them. Yesterday, though, they were sharing their stories, their emotions and their feelings at a very human level.
Today, though, a different story. Many people still telling us they can't talk and won't talk, because those regulations from their big companies are still in place.
One person who will, though, is Russ Martorana. He is here on his way into his work this morning -- appreciate you taking time out today.
RUSS MARTORANA, STOCK TRADER: You're welcome.
HEMMER: It appears to me that things are somewhat calmer than yesterday. There is less tension, and you think that is not a good thing. Why?
MARTORANA: Well, we have a tendency in this country to be very resilient too quickly, and I think that that could be a mistake. At this juncture, we really have to focus and keep our resolve, not just from the presidency down, but individuals. Common workers have to be focused in an attempt that we can't just let our guard down. That's exactly what they want. Terrorism thrives on the fact of complacency. They're not going to attack when everybody is on their guard. They wait for your guard to be down like a sucker punch. Anything that -- something like that has to be maintained, and it's critically important, because we've it seen time and time again -- the USS Cole, the first bombing, embassy bombings, the millennium everybody was so concerned about. But you'll notice that all of these events happened well after when we were all back to feeling a sense of normalcy. Sticking your head in the sand isn't the answer. We really have to -- whether you're at an airport or a library or on the Staten Island Ferry or in a zoo, be attentive, be focused. Assume -- we're in treacherous times, and history does repeat itself. There's no reason to think that this can't and won't happen again unless each and every one of us does something.
HEMMER: Russ, in your line of business -- you were here yesterday, you're back again today...
MARTORANA: Yes.
HEMMER: ... people coming back to work. We talk about normalcy. We are far from it at this point. But just having the markets open yesterday appeared to give a lot of people a sense that it's a good thing. Despite the enormous point loss, it was a good thing.
MARTORANA: Yes, it was a good thing. If you take it out of context, it was the greatest point loss in history, but in terms of percentages, there have been probably 15 days in history that have been worse than this. And given the state of the nation, this is an unprecedented crisis, we're in. The airline industry virtually at a near crash in itself. It was a little bit too much for the market to bear just as it was for those towers. But like the towers, we will -- the towers will eventually rise again, and so will the markets.
But the key is as those things better, our resolve and our focus can never be diminished, because that's where we're most vulnerable. And I just want to say to everyone just be very focused.
HEMMER: Russ, thanks.
MARTORANA: Thank you.
HEMMER: Good luck today, all right?
MARTORANA: Thank you very much.
HEMMER: The markets will open again in about an hour's time from now. Susan Lisovicz on the floor of the New York Stock Exchange -- Fred Katayama uptown in Times Square from where we are.
We will check in with both now -- Susan, first to you and good morning.
SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning.
Well, smoke still permeates the trading floor where I am standing one week after the horrific attack on the World Trade Center just a few blocks away, but there is an argument being made that today's open and today's trading session will be just as important as what happened yesterday. And the reason is that we had a big sell-off -- not a catastrophic sell-off -- the biggest point loss ever, but far from the biggest percentage loss, not even in the top 10.
There is a sense that there was order, there was stability, that the systems worked. And there is a hope among many of the traders here that there could have been a washout, that in fact we could be taking the time -- we could be in a position now where we could make a floor for what happened yesterday, and there may be an attempt to make a comeback, a rally at the open.
Now, having said that, there was more than emotional damage that occurred yesterday. We had some of our biggest companies warning that what happened in the past week is going to hurt their third quarter profits. Among them: American Express, Citigroup, United Technologies, all members of the Dow 30. And this comes during what we call "confession season," when many companies warn that their numbers are not going to make what the investment community expects, and this, of course, comes at a time when the economy is shaky to begin with.
However, many traders that I talked to were deeply heartened and encouraged by what they saw yesterday, that there was no panic. And they are hoping that we will find a floor after what happened yesterday -- back to you.
HEMMER: Susan, thank you. Again, the opening bell an hour from now.
To Times Square and the Nasdaq exchange and CNN's Fred Katayama this morning -- Fred, good morning to you.
FRED KATAYAMA, CNN CORRESPONDENT: Good morning, Bill.
Well, this wall behind me yesterday was a sea of red, but as you see here today, right now you see this flicker of green. That's a premarket indicator for the 100 largest stocks indicating that it's in positive territory. So the Nasdaq may open flat, just slightly higher at their open. Trading could be a bit less active than yesterday, because a lot of traders are off for the Jewish New York, Rosh Hashanah.
Now, we're seeing further signs of fallout from the attack on the Pentagon and the World Trade Center. Oracle, the database software maker, says it expects its corporate software business will continue to be weak. It says revenues from its software licensing division could fall as much as 15 percent compared to the same period a year ago, because business was disrupted.
Well, we're hearing a different story from eBay. The online auctioneer says it is still sticking with its forecast for the third quarter, even if you include the results of business on the days following the attack on the World Trade Towers.
And also good news from Papa John's -- that's a pizza restaurant chain. Papa John's saying that it now expects its earnings -- third quarter profits to be in the middle to upper middle part of its range of forecast. The reason being, it says sales at its franchise restaurants were better than expected.
So there's a little bit of glimmer of hope, although there are still a lot of people worried about how the markets will react today, given if you look back at history, often on the second day following a cataclysmic event at the start of trading, we do see the markets -- they tend to end the day lower. We'll see what happens here at the Nasdaq today -- back to you, Bill.
HEMMER: All right, Fred, thank you very much -- Fred Katayama, Susan Lisovicz -- much appreciated.
Back here on Broad Street, the security is still tight and the smoke still in the air, but the tears here, Paula, have not gone away. They will be with us for a very, very long time -- back to you.
ZAHN: Sorry to hear that. All right. Thanks so much, Bill.
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