SUSIE GHARIB: Reagan National airport is back in business. It's the nation's last airport to reopen after the September 11th terrorist attacks. A USAirways (U) shuttle flight to New York was the first plane cleared for takeoff this morning. Washington bureau chief Darren Gersh was on board, and reports that despite the fanfare surrounding the first commercial flight, analysts say the outlook for USAirways is shaky.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Well before sunrise today, the road warriors were back at Washington's Reagan National airport. They were checked, scanned, patted, and rechecked, but they came. Are you changing your travel plans at all?

UNIDENTIFIED TRAVELER: Only the fact that it's 5:00 a.m. and I'm standing in the airport.

GERSH: Passengers arrived two hours early to get through what is promised to be the tightest airport security in the nation. No exceptions for airline executives; that's Stephen wolf, chairman of USAirways.

STEPHEN WOLF, CHAIRMAN, US AIRWAYS: Oh, yes, excuse me.

GERSH: This is a big day for US Airways. Its shuttle service between Washington and New York is the airline's crown jewel, which is why it packed this plane with reporters and politicians to celebrate the first flight to leave Reagan National when it reopened this morning. 23 days after the terrorist attacks, the USAirways shuttle is back in business.

WOLF: It feels absolutely terrific. I'm even happier to have you and everyone else on board with me, but it is terrific to have it flying once again.

GERSH: There's a very real sense of relief at USAirways now that Reagan National airport is finally up and running again. This airline flew more flights out of this airport than any other before the attack-186 a day. Today it will fly eight flights; Monday 23. Clearly this is a time for rebuilding. Since September 11, US Airways has reduced capacity by 23 percent. It has laid off 11,000 workers, and is retiring older aircraft to simplify its fleet and lower operating costs. US Airways has a billion dollars in cash, expects $180 million more from the Federal bailout, and Wolf's goal is to make the money last.

WOLF: The key challenge for the industry right now is to conserve cash-and I don't care which airline we're talking about-until traffic comes back. Now, the good news is we're starting to see the bookings starting to firm up and be a little stronger each day. Nothing like what they were before, but indeed, improving on a daily basis.

GERSH: For USAirways and other airlines, the most profitable traveler is the business traveler, and they have been spooked by reports of long lines at airports. Wolf says they shouldn't be.

WOLF: The media sort of has this two-hour arrival curve at the airport before your airplane departs. That truly is not necessary. But we've got to improve our security systems and passenger flows in light of new security so people can get through airports promptly. That's a real focus of the company.

GERSH: But even as it copes with security concerns, analysts say USAirways must still tackle labor and operating costs that are too high.

RAYMOND NEIDL, AIRLINE ANALYST, ABN AMRO:US Air has a daunting task ahead of them, and they are not going to be able to succeed unless they can get their employees and their unions on board right away to work with them to make, to reform and make this a viable carrier.

GERSH: But Wolf says his airline is now focused on a core network that can be quite profitable, now that it is once again on the move. Darren Gersh, "NIGHTLY BUSINESS REPORT," on the USAirways shuttle.

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.

10/04/01: Analysis of 3rd Quarter Earnings Season With Chuck Hill of First Call

SUSIE GHARIB: Earnings season for the 30 Dow stocks officially kicked off today, and ALCOA (AA) was the first to report its third quarter numbers. The world's largest aluminum company met analysts' expectations of $0.39 a share, but that's down from $0.42 a year ago. ALCOA was hurt by weak demand in the transportation and construction markets, and it expects that trend to continue in the wake of the September 11 attacks. Those attacks are also the reason that Gateway (GTW) issued an earnings warning late today, citing a drop in demand across all customer segments. Gateway expects to lose between $0.14 and $0.17 a share in the third quarter. Estimates were for a $0.04 loss. Meanwhile, Dell Computer (DELL) reaffirmed its outlook for profits in the third quarter. It said it would earn $0.15 to $0.16 a share. Investors liked the news. The stock surged $1.68 to $22.32. That was up more than eight percent. But some analysts say this doesn't change their fundamental view of the company.

JAMES POYNER, ANALYST, C.E. UNTERBERG TOWBIN: No one argues that they don't throw off cash. No one argues even that they can't continue to gain some unit share. But the problem they face, the challenge they face is an endemically slow to no growth industry that they're becoming a larger part of and then secondly the average selling price of the unit continues to fall.

GHARIB: Well, our guest tonight says that he's expecting more negative earnings warnings like Gateway's and a barrage of dismal third quarter reports. Chuck Hill is director of Research at First Call and he joins us live from midtown Manhattan. Chuck, nice to have you on the program tonight.

CHUCK HILL, RESEARCH DIRECTOR, FIRST CALL: Good evening, Susie.

GHARIB: Well, the last time we talked you said that you were expecting third quarter earnings to be down 17 percent but that was before those September 11 terrorist attacks. What are you expecting now?

HILL: I think we'll probably see earnings down about 22 percent for the third quarter and I'm afraid that the rate they're falling for the fourth quarter, that we're going to be somewhere close to that for the fourth quarter, even though we have a much easier comparison when we get to the fourth quarter because earnings fell off dramatically in last year's fourth quarter.

GHARIB: And you had been looking before the terrorist attacks for a turnaround maybe by the first quarter of 2002. Now what?

HILL: Well, I think we've pushed that back to at least the second quarter. I mean we've been in a sequence since this downturn started of whatever quarter we're in, at the beginning we think we're going to have a recovery two quarters out in earnings, but by the time we get to the end of the quarter, why, we push it back a quarter. We thought it might be different this time because of the Fed cuts earlier this year, it would impact the first quarter of next year significantly. But the attack changed all that. We're going to have down earnings for sure in the first quarter and no material improvement over the fourth.

GHARIB: And so that would mean five straight quarters starting with the first quarter of 2001 through 2002 of down quarters. What are the implications of that?

HILL: Well, it says we're in for one of the worst earnings downturns that we've had since the '50s. If we look at the recessions since the '50s, they've either been four or five quarters long in terms of how many quarters were down for earnings. We've also seen the down, the worst one was the Gulf recession, where they had two quarters down in the low 20s. We're going to be as deep as we've been and as long as we've been for any of those recessions since the 50s.

GHARIB: Chuck, there's been a considerable discussion and debate about how to account for the losses that are related to the September 11 terrorist attacks. How will investors, how will analysts deal with those losses? How will we know how a company has actually performed in the quarter?

HILL: Well, unfortunately it's going to muddy the waters a little bit. I mean some companies are coming out and saying they're going to take a charge as a result of the attack. Now, some of that may be legitimate. It's a direct cost of the attack that should be excluded from the earnings, the value of the stock would. But in other cases it's things that, you know, we're in a different environment now. We're going to have to live with this environment and we're not going to have the same kind of business conditions that we did before the attack.

GHARIB: Absolutely. Well, as you look at the third quarter reports that will be coming out in the next week or two, can you assess the companies that will be reporting tough earnings and the ones that might have a few bright spots? What sectors will do well, which ones won't?

HILL: Well, technology was already expected to be the worst one. Earnings are likely going to be down about 70 percent from a year ago. But now as a result of the attack, the transport earnings will be even worse than technology. Basic materials, the papers, metals and chemicals, will be another one that, where conditions will be extremely bad. Consumer cyclicals, which had there was some hope might be up in the fourth quarter, they're going to be down in the third, down in the fourth and probably down in the first. That's where we're seeing the most dramatic changes from the pace we've been running.

GHARIB: And there you're talking about autos, housing--

HILL: Autos, housing, retailing, etc.

GHARIB: OK.

HILL: But we just don't know yet, I mean how bad it's going to be. That's the big uncertainty, is what is the consumer going to do.

GHARIB: Well, we'll get our first wave starting next week and we'll check in with you again.

HILL: Thank you.

GHARIB: Thank you very much, Chuck. We've been speaking with Chuck Hill of First Call.

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.

10/04/01: Reassuring Frightened Investors With Financial Plans

SUSIE GHARIB: During these challenging times, companies are finding that they need to provide investors with information to help restore confidence. But there's a debate over just how much information should be shared. Angela Terrell Heath reports.

ANGELA TERRELL, NIGHTLY BUSINESS REPORT CORRESPONDENT: As the nation starts to rebuild after the attacks last month, investors large and small have a pressing question.

LOU THOMPSON, PRESIDENT, NATIONAL INVESTOR RELATIONS INSTITUTE: And that is does your company have a contingency plan, a crisis plan to deal with this new era of the war on terrorism.

TERRELL: Some analysts say before the markets can fully recover, Wall Street must firm calm investors' fears. They say firms should let investors know they've taken a second look at their disaster plans.

THOMPSON: It's important that they assure them that they have taken these older plans and have brushed them off in light of what we're dealing with today or if they haven't, didn't have plans at all, it's OK to say we're developing them.

TERRELL: One shareholder advocate thinks the Securities and Exchange Commission should require companies to tell investors how they plan to deal with emergency situations.

NELL MINOW, EDITOR, THE CORPORATE LIBRARY: If the SEC really wants to take quick action to reassure the investment community, I think the best and quickest thing that they can do is come out with some very clear requirements for companies and disclosing what their risk assessment is in a way that addresses the kinds of issues that were raised by the terrorism on the 11th.

TERRELL: Minow says if companies are more open about whether they have an evacuation plan for offsite storage, that would go a long way towards building investor confidence. Former SEC Chairman David Ruder agrees there should be some communication with investors in times like these.

DAVID RUDER, LAW PROFESSOR, NORTHWESTERN UNIVERSITY: I would say to a corporate management if you're going to engage in what we call best practices, that the best practice would be to try to assure your shareholders that you're looking at the problem and you're doing what you can to make things better.

TERRELL: But he warns that companies must be careful about what they say.

RUDER: To the extent that they disclose what they're doing, they are in a sense making some sort of promise or assurance to investors that they're going to avoid risk in the future.

TERRELL: Ruder says disclosing too much information leaves companies open to lawsuits and thinks the risk is too great to justify any disclosure beyond a very bland statement. Experts say more than half of American companies have disaster plans in place. But some firms fear sharing that information with investors could compromise the security of those plans. Angela Terrell Heath, 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.

10/04/01: Commentary: The Economic Cause & Effect Of The Terrorist Attack

SUSIE GHARIB: But critics say it will now be harder to get much needed privacy legislation through Congress. Since the September 11 attacks, many people have been encouraging Americans to buy stocks. Tonight's commentator is one of them. Here's Martin Anderson, fellow at the Hoover Institution at Stanford University.

MARTIN ANDERSON, COMMENTARY: Twenty-three days ago a sneak attack plunged America into a world war on terrorists. Fear of the weakened economy drove the stock market into a steep dive. Were those fears justified? At first glance, yes. For the first time in our lives the homeland was attacked and over 6,000 men, women and children were murdered. And the terrorists could strike again. But maybe the terrorists have miscalculated the will and power of America, much as Japan did in 1941. America is a gentle, peaceful giant, but when aroused it can be ferocious, out killing and out producing any enemy on earth. As "Time" magazine recently pointed out, we have been through similar events in the past that caused the stock market to sell off. Ever since the fall of France to the Nazis in the 1940s, there have been 28 of these crises. In 25 of the 28 crises, the initial market declined, turned back into solid gains within six months. During the Gulf War in 1991 the market fell 4.3 percent and six months later it was 18.7 percent higher. The average for 25 of those past places was an initial drop of 4.6 percent in the stock market followed by a 12.1 percent gain just six months later. Ours is the strongest nation on earth. Threats to our liberty have always made us even stronger. This will be no exception. I'm buying. I'm Martin Anderson.

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.

10/03/01: Paul Kangas' Wall Street Wrap Up

JEFF YASTINE: Well, the reopening of Reagan National put investors in a buying mood as the trading started this morning. The Dow Jones Industrial Average opened higher, spurred on by leftover buying from yesterday, and an announcement from Dell Computer. More on that momentarily. Market breadth was narrowly positive in the morning session-not great, but it was enough to push the Dow about 45 points higher by midday. In early afternoon trading, the NASDAQ tried to push higher with Microsoft (MSFT) and Intel (INTC) both showing nice midday gains. In late trading though, the rally in both indexes began to fade as investors tried to lock in profits from the last few days and the Dow went on to close near the day's lows, settling off 62.9 points at 9060 and the NASDAQ rose 16 1/2 to close at 1597.31.

Volume, 1.5 billion shares, down a touch from yesterday. Up volume exceeding down volume by about 126 million shares.

Transports backtracking a bit, down nearly 12 points.

Utilities up a fraction.

The Closing Tick bullish at +380.

In the broader market, the S&P 500 and 100 each falling a little over 2 points.

The MidCap 400 gaining about 2 points on the day.

The CRB rising about 1 3/4 points.

New York Stock Exchange Composite Index falling about 1 1/3.

The Value Line rising about 2.

The Small Caps gaining nearly 4.

And the Wilshire losing about 8 1/3 points.

Bond prices finished lower today. The Treasury Department surprised traders with a sale of $6 billion in 10-year notes. Normally the sales are announced days in advance. But the Treasury said it wanted to provide liquidity. There's been something of a bond shortage lately because of the dislocation of many New York bond trading departments. The Treasury may also do a five-year note sale, perhaps next week.

So corporate and tax free issues finished lower, and so did Treasuries.

The 5-year note falling 2/32.

The 10-year note dropping 9/32.

And the 30-year falling 2/32 as well.

The Lehman Brothers Long Bond Index losing about 4 1/2 points.

Well, the blue chips in retreat today. They couldn't make it three in a row for the Dow Jones Industrials, losing 62, almost 63 points on the day. Advancers beating out decliners by a mere 9 to 6 margin. 71 issues with new highs; 48 at new lows.

EMC (EMC) topping the active list for a second day, rising $0.59 on 25 million shares.

GE (GE) falling $0.76. The Dow component eliminating 4,000 jobs from its aircraft engine unit.

Citigroup edged up $0.14.

Corning (GLW) falling $1.30. The company said third quarter profits would come in at $0.06 a share. That's half of what Wall Street was expecting. It will also take a restructuring charge of $1 billion and cut 4,000 more jobs.

AOL Time Warner (AOL) slipping $0.21 on the day.

Compaq (CPQ) gaining $0.20.

The NASDAQ Qs (QQQ) rising $0.30.

Nokia (NOK) picked up $0.64. Analysts believe more people are buying cell phones after last month's attacks.

Texas Instruments (TXN) rising $1.79. Microsoft (MSFT) launched its new Pocket PC software today and Texas Instruments said its chips support those applications.

Lucent (LU) holding steady.

Among the widely helds, British Airways (BAB) falling $1.90. Traffic loads dropping 22 percent last month from the year ago period. British Sky Broadcasting (BSY) rising more than $4.

The company says it expects to be cash flow positive by year's end.

Equity Office Properties (EOP), it rose $0.12. Standard & Poor's is putting a handful of real estate investment trusts in its major indexes for the first time and this one will replace Texaco (TX) in the S&P 500 next week.

GM (GM) ended off $1.51.

Marriott (MAR) falling $1.40. It said profits dropped eight percent in the third quarter. The fourth quarter shouldn't look much better either.

Procter & Gamble (PG) tumbling more than $2.

Tycom (TCM) soaring nearly $5. Tyco (TYC), the parent company, is buying back the 12 percent that it spun off to the public last year. It sold those shares at 32 in the IPO. Now it's buying them back for $14.

Actuant (ATU) climbing $4.50. Fourth quarter profits rising 10 percent from last year and it shattered analysts' estimates of $0.45 a share.

American Axle (AXL) up $1.85. The R.W. Baird Brokerage (ph) firm issuing a "strong buy." Despite the slumping car sales, the brokerage believes the company's sales prospects to the auto makers could boost earnings by 12 percent.

Thomson Multimedia (TMS) getting a boost in the wake of the updates from Cisco (CSCO) and Dell Computer this week, the stock gaining nearly $3.

Global Crossing (GX) dropping $1.02. That's a 48 percent loss there. The company is changing its corporate structure, its management and will sell some non-core assets. Goldman Sachs and others fled the stock on record volume.

And shares in Paxar (PXR) were tagged for a nearly $2 loss, Paxar warning about third quarter profits and revenues. Its main customers, apparel retailers, are obviously having a tough time in the economy.

The NASDAQ Composite eking out a gain of 16 1/2. Volume dwindling to about 2 ½ billion shares and there were 3 stocks up for every 2 down.

Microsoft (MSFT) moved up a fraction. We told you about the Pocket PC software that was being rolled out today.

Cisco Systems (CSCO) also a gainer on the day.

QUALCOMM (QCOM) losing $2.81. It's being hurt by Nextel's (NXTL) d