SUSIE GHARIB: Fed Chairman Alan Greenspan tried to reassure investors today, but Wall Street wasn't in a listening mood. The Dow plummeted 382 points, bringing its loss for the week to a staggering 1,229 points or almost 13 percent. The NASDAQ lost 56 points. Investors are concerned about a barrage of earnings warnings and massive layoffs on top of the deep economic and military uncertainties. Erika Miller reports.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Fear overpowered hope in the markets again today. Investors bailed out of stocks on continued worries about the nature of the US military response to last week's terrorist attack.

MIKE MURPHY, EQUITY TRADING DIRECTOR, FIRST UNION SECURITIES: The biggest concern here is uncertainty in our political situation. Until we get that defused, until America feels like they are in control again with their political destiny, I think that this market is going to be in sort of a hold to down mode.

MILLER: Adding to the selling pressure, fears that weakness in the economy will cripple corporate profits.

SAM STOVALL, SECTOR STRATEGIST, STANDARD & POOR'S: Certainly, the third quarter is likely to show negative year over year figures. And I think what most investors are realizing is that any kind of a profits turnaround is not going to take place in the fourth quarter, but is likely to be delayed until the middle of 2002.

MILLER: So far this week, the Dow and the NASDAQ have each plunged 13 percent, while the Standard & Poor's 500 has fallen 10 percent. Selling was heavy in almost all sectors, but airline stocks were hit especially hard after Standard & Poor's and Moody's cut the debt ratings of most major carriers, citing declines in air travel since the tragedy. Financial stocks also nose dived on concerns about massive insurance pay-outs and destruction in New York's financial district. Plus, many banks have warned they will suffer as Americans cut their spending and borrow less. Despite the heavy selling this week, some analysts say it may help set the market up for a rally.

STOVALL: Whenever we do have panic selling, it usually gets to a point where the market is extremely undervalued. And so that could provide some sort of a snapback rally that once again re-tests the lows before the market on a longer term basis heads higher.

MILLER: Even the bulls are warning investors should brace themselves for the possibility of more market declines tomorrow. It's triple witching, the quarterly expiration of options and futures contracts, a day typically characterized by wild price fluctuations. Erika Miller, "NIGHTLY BUSINESS REPORT," New York.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

09/20/01: The Government Admits The Economy Is Down But Not Out

SUSIE GHARIB: On Capitol Hill, the government's economic leaders urged Americans not to lose faith in the US economy. Fed Chairman Alan Greenspan predicted the economy will "recover and prosper." Treasury Secretary Paul O'Neill added that while the terrorist attacks will hurt the economy in the short term, it "remains strong and resilient." Darren Gersh has more.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: In his first public comments since September 11, Fed Chairman Alan Greenspan said the terrorist attacks have done significant damage to the US economy in the short term.

ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE BOARD: But as we struggle to make sense of our profound loss and its immediate consequences for the economy, we must not lose sight of our longer-run prospects, which have not been significantly diminished by these terrible events.

GERSH: For now, Greenspan said consumers are riveted to their televisions, instead of shopping or buying cars. And when the nation's airlines shut down and the borders went to high alert, crucial deliveries were delayed, disrupting just-in-time production lines. With so much uncertainty, Greenspan urged Congress to hold off on any plans for a broad economic stimulus package for at least a few weeks. Telling the Senate Banking Committee it is more important to be right than quick, the Fed chairman warned it won't be possible to address the economy's underlying problems until more temporary disruptions are repaired.

GREENSPAN: Until we can see what the economy looks like without them, appropriate policy initiatives in my judgment are premature.

GERSH: Treasury Secretary Paul O'Neill also urged patience. But with Congress rushing to help the nation's airlines, many senators wondered why they shouldn't try and help Boeing (BA), hotels, or small businesses and others hurt by the attack. O'Neill says the Bush administration is considering all options for a broader stimulus plan, but for now, the focus must be on stress-points in the economy, the most important being the airlines.

PAUL O'NEIL, TREASURY SECRETARY: We need to focus very clearly on where the lever points in our economy and make sure we're not treating the secondary or tertiary consequences, but we're fixing the hole in the system that will make everything else work.

GERSH: As he so often does, Alan Greenspan also put this moment into perspective. When history looks back on the loss of life from this tragedy, the Fed chairman said, the economic and financial implications will be "a mere footnote." Darren Gersh, "NIGHTLY BUSINESS REPORT," Washington.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

09/20/01: The Post Terrorist Attack Outlook From Joe Battipaglia, Chief Investment Strategist at Gruntal & Company

SUSIE GHARIB: Our guest tonight says that the near term direction of the stock market depends on the U.S. response to last week's terrorist attacks. He is Joe Battipaglia, Chief Investment Strategist at Gruntal & Company, and he joins us live now from midtown Manhattan. Joe, first of all, I want to say I know this has been a traumatic time for you personally and your firm and we're really happy to have you on our program tonight.

JOSEPH BATTIPAGLIA, CHIEF INVESTMENT STRATEGIST, GRUNTAL & COMPANY: Thank you very much. And I want to extend my condolences to any and all who were affected by this tragedy.

GHARIB: We have seen so many large losses in the stock market this week and an incredible loss of wealth. It's been staggering. Tell us what your take on the markets are and your outlook.

BATTIPAGLIA: Well, up until the attack the biggest concerns for investors were whether or not there was a recession on the horizon and that the outlook for corporate profits was deteriorating. We had a 25 percent correction in market values in the broader market sense prior to the attack. We've now had an added 10 percent decline, reflecting now what would be considered the war risks, the uncertainty risks, because now the President has said there will be a war on terrorism, but we have to see the definition of that war and we have to see the tangible evidence of what it entails in the next eight weeks.

GHARIB: So, eight weeks. Why eight weeks? Couldn't it take longer than that?

BATTIPAGLIA: Well, I think the next eight weeks, starting with tonight's address to the nation, I might add, will start to lay out what this war is actually about, what will be the economic price, what will be the tactical initiatives, how strong will be the coalition to fight terrorism. And if we move decisively to round up many of these terrorists, to cut off their finances, to take out their bases and installations, that will start to show up as a reassurance to the American people that we can, indeed, start to return to more normalcy. Indeed, Alan Greenspan, talking about the short-term effects and the longer term potentials, we've got to bridge those short-term effects

GHARIB: Joe, how do you factor in some of the other news we've been getting, some very bleak news on the earnings front and on massive layoffs on top of these bailout packages that we've been hearing from airlines and other industries? How does that figure into the equation?

BATTIPAGLIA: Well, investors no longer have to fear the recession or fear the drop in profits because we're in that situation today. And we also know that lining up against it is some very powerful stimulants. First, monetary policy and a tremendous amount of easing. Secondly, tax cuts, spending increases at the federal level. And then thirdly, the fact that inventories have been drawn down dramatically and clearly we're entering a rebuilding phase. But none of that kicks in until the consumer is confident and spends and businesses are confident and invest. And the only way we get there is to get this war on terrorism understood by the American people, by the world community and then have effective early victories.

GHARIB: So what do you see as the real risk here right now?

BATTIPAGLIA: I think the real risk-

GHARIB: I mean, is it the economy you're looking at or government response?

BATTIPAGLIA: To me, it's government response because if, indeed, we stumble here or are ineffective, it could mean a longer, more turbulent time for global markets to recover and that puts more pressure on stocks.

GHARIB: Real quickly, Joe, we just have a few seconds. What will you be looking for and listening from President Bush's speech tonight to give you some direction for your investment decisions?

BATTIPAGLIA: A clear sense of mission, a definition of what the war on terrorism is and a call for peace and determination by all world leaders to get this under way so that we can, indeed, conquer it and get back to a free world.

GHARIB: OK, Joe, thank you very much again for being on NIGHTLY BUSINESS REPORT.

BATTIPAGLIA: My pleasure.

GHARIB: We've been speaking with Joe Battipaglia of Gruntal & Company.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

09/20/01: Northrop Grumman's New High Tech Plan of Attack

SUSIE GHARIB: The potential for a long and protracted war is focusing new attention on the defense industry. But just how will America fight a war against a hidden and unseen enemy? As Pat Anson reports, one company has positioned itself to fight the first high tech war of the 21st century.

PAT ANSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: After a decade of contraction and consolidation in the defense industry, Northrop Grumman (NOC) has reinvented itself as a company that relies more on brains than brawn. Gone is the old emphasis on building fighters and bombers, replaced by a new focus on information technology, surveillance and so-called smart weapons, tools that Northrop's top executive says will be sorely needed in a war against terrorism.

KENT KRESA, CHAIRMAN & CEO, NORTHROP GRUMMAN: As we've seen in this horrible event last week, we are not immune and we need to beef up our internal defenses across-the-board on many different threats. Certainly intelligence is critical. You have to know what's going on. You have to know who the bad guys are and where are they and what are they doing.

ANSON: Kent Kresa says the most serious threat to the country may be a surprise attack over the Internet, what he calls an electronic Pearl Harbor or cyber war.

KRESA: It's something which clearly is going to be coming because this nation is so critically involved with the growth of knowledge management, telecommunications, the fact that we're all netted together in some way. And our whole society depends on it. If you can take that system down, then you can change the society dramatically.

ANSON: Just how vulnerable are we to a cyber attack? I mean are we talking about, you know, computer viruses like we've seen in the past or something much more organized and destructive?

KRESA: Well, that's the key. We've seen what a simple virus could produce and I'm sure that in a coordinated attack by a much broader activity on the part of some rogue nation or terrorist group that it could be significantly worse and we could have some severe damage to our overall communications systems.

ANSON: Northrop is best known for building airplanes, but the company has diversified so much in recent years that aviation plays an increasingly smaller role in its operations. Defense electronics now account for over a third of the company's earnings and Northrop is one of the largest suppliers of information technology to the federal government. Like other defense contractors, Northrop's stock has risen sharply in the wake of the attacks. John Kutler believes the run up may be justified for Northrop. He says the company is ahead of the curve in devising military technologies for the 21st century. Northrop will soon begin production of an unmanned surveillance plane called Global Hawk and there's reason talk of resuming production of B2 stealth bombers, potentially a $30 billion program.

JON KUTLER, CEO, QUARTERDECK INVESTMENT PARTNERS: Northrop is very well positioned in general even before the events of last week. It has a good balance of information technology, defense electronics. It is not necessarily just a B2 company anymore. And I think because of that, they'll be well positioned in the next decade in defense spending in general.

ANSON: Pat Anson, NIGHTLY BUSINESS REPORT, Los Angeles.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

09/20/01: Commentary: The True Power Of Stock

SUSIE GHARIB: Tonight's commentator has a few thoughts about buying stock during uncertain times. Here's Allan Sloan, Wall Street Editor for "Newsweek" magazine.

ALLAN SLOAN, COMMENTARY: If your e-mail is anything like mine, you got a ton of messages last week urging you to buy stock this week to show support for America. If you did this, which I certainly hope you didn't, you're sitting on big losses. But that's not even the problem. It's natural to think that a strong stock market means a strong country and vice versa. But that's not the way the world works. When the U.S. market was insanely high two years ago, it didn't prove the U.S. system was superior any more than Japan's high prices in the '80s meant that Japan was superior. The fact that stocks have been horribly weak lately, especially since those homicidal maniacs attacked us, doesn't mean that America is horribly weak. And when prices turn around, which some day they will, it won't necessarily mean that America is getting stronger. You shouldn't confuse buying shares in U.S. companies with being patriotic or selling shares with being unpatriotic. I think that anyone who sold U.S. stocks short this week is a pig who is profiting from our victims' blood, but it doesn't make him a traitor. And you don't have a patriotic obligation to hock yourself to the eyeballs to keep consumer spending going to prop the economy. I plan to keep spending, but I can afford to do it. In the long run, what drives the U.S. stock market is the strength of our economy. But America's strength as a country and a society doesn't depend on the Dow or the S&P. It depends on our people and our innovation and our willingness to get along with each other. Stock prices send economic signals, they don't send moral or patriotic signals. I'm Allan Sloan.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

09/20/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened in retreat today, unable to follow through on yesterday's late rally which cut over a 400 point deficit in the Dow Industrial Average to a 144 point closing loss, and which also trimmed a mid-session loss in the NASDAQ Index considerably. Some of the early weakness today was linked to sharp sell-offs ranging from 3 to 4 percent in major European stock markets, and hardly helping was Fed Chairman Greenspan warning about the short-term economic fallout that will impact the nation in the wake of last week's terrorist attack. By 11:00 a.m., the Dow was down 248 points, or 2.8 percent, while the NASDAQ Index posted a 28 point loss after being down as much as 41 early on. A steady flow of corporate earnings warnings and brokerage downgrades triggered renewed selling throughout the morning, which sent the Industrial Average to a 337 point, or 3.8 percent deficit by 12:30 p.m. when the NASDAQ was off 54 points or 3 1/2 percent. Several rally attempts were quashed in afternoon trading by what appeared to be selling prompted by margin calls and mutual fund redemption needs. The Dow Jones Industrial Average proceeded to fall to a closing loss of 382.92 points. That's 12.4 percent and it now stands at 8376.21. The NASDAQ Index ended with a loss of 56.87 points at 1470.93.

Big board volume fell to 1.9 billion shares, down from 2.12 billion yesterday, but no contest between up and down volume, about six times of the down variety, more than the up variety.

The Dow Transport Index off exactly 132 points or just over 6 percent.

Utility Index managed to gain 2.30.

The Closing Tick neutral at -7.

Standard & Poor's 500 off 31 1/2.

A loss of 17.83 in the 100.

MidCap 400 off nearly 16 points.

And the Bridge Futures Price Index fell .32.

A loss of nearly 15 1/4 in the New York Composite.

Value Line off 11 1/4.

15 1/2 point drop in the Russell2000 Small Cap.

And the broadly based Wilshire 5000 dropped 284 1/2 points or 3 percent, not as bad as the 4.4 percent drop in the Dow. The bond market moved lower on profit taking brought on by concern that the government will soon issue more debt to pay for the higher spending required to halt the slide in the economy along with increased military costs. Tax free and corporates lost about ¼ point. Treasuries fell across the board. We have a look at the 5-year note, down just 1/32.

The 10-year note off 6/32.

30-year bond down 31/32.

And finally in its first day of trading since the attacks, the Lehman Brothers Long-Term Treasury Bond Index was down almost 20 points.

This was the seventh consecutive down day for the Dow Industrial Average and in that period it's lost 1,667 points, or 16.5 percent. Today off nearly 383. Three times as many losers as gainers. Let's make that about four times as many losers as gainers. Only 21 new yearly highs and 595 new yearly lows.

Disney (DIS) topped the active list on nearly 51 million shares. Late today the company confirmed reports saying the Bass family sold 135 million shares of Disney to meet a margin call. The company bought back 50 million. Goldman Sachs placed the remainder. Prices ranged as low as $15 a share.

General Electric (GE) falling closer to $30, down $2.13.

AOL Time Warner (AOL) off $1.70.

Tyco International (TYC) lost $2.75.

And then Citigroup lost $2.09. J.P. Morgan Brokerage downgraded Citigroup from "buy" to just a "market performer."

EMC (EMC) managed to edge up $0.02.

Lucent Technologies (LU) down $0.17.

The NASDAQ Cubes off $1 exactly.

Cendant (CD) fell $0.81, tenth in volume.

Compaq Computer (CPQ) down $0.28.

AG Edwards (AGE) fell $2.87. The company in with second quarter earnings lower, $0.50 versus $0.93 last year. Revenues were down 12 percent. However, Standard & Poor's maintained a "hold" recommendation on A.G. Edwards' stock.

ALCOA (AA) down $1.89. BB&T Capital cut its 2002 earnings estimates for ALCOA but kept a "buy" rating on the stock.

Eastman Kodak (EK) off $5.03. Yesterday it was down $2.22 when the company forecast third quarter earnings would be as low as $0.65 at best versus its earlier projection of $0.90 to $1.20.

FedEx (FDX) managed to gain $0.12. The company in with first quarter earnings of $0.41 versus $0.58 a year ago. But those earnings were $0.10 better than the Street estimate.

Texas Instruments (TXN) fell $2.17. Salomon Smith Barney made negative comments about the third and fourth quarter outlook for chip companies.

And United Technologies (UTX) losing $6.01. Salomon Smith Barney downgraded that stock from "buy" to just "neutral."

PG & E (PCG) gained $1.22, one of the better percentage moves on the up side. The company this morning filed a reorganization plan to come out of bankruptcy.

Willis Group Holdings (WSH) up $1.15. This was the insurance broker for the real estate group that bought the World Trade Commission in recent times. This firm stands to benefit from looming insurance rate increases, but it is not exposed to loss coverage. It's just a broker, not an insurer per se.

Texas Instruments (TXI) down $8.80. Texas Industries, I should say. First quarter earnings, $0.23, way down from $1.13 last year.

US Airways Group (U) down $1.25. Standard & Poor's cut credit ratings with negative implications on US Air and practically all the majors like American, Delta (DAL) and United (UAL).

SPX (SPW) down $19.25. The company sees third quarter results at risk because of the attack on America. It makes auto parts, among other industrial products.

And the bears assaulted battery maker Rayovac (ROV), off $2.95. The company sees fourth quarter earnings of only $0.25 to $0.27 a share. The Street was looking for $0.50 a share.

NASDAQ trading, nearly a 57 point loss in the Index. Volume, however, well down from yesterday, just barely over two billion shares. For every 9 stocks up, over 28 down.

Microsoft (MSFT) topped the active list, down $3.1.

But Immunex (IMNX) up $1.78. Immunex' stock w