SUSIE GHARIB: Anxiety in Washington spread to Wall Street today. Stocks sold off on news of more confirmed cases of anthrax exposure on Capitol Hill and a cautious assessment on the economy from Federal Reserve Chairman Alan Greenspan. The Dow dropped 151 points, and the NASDAQ lost 75. Darren Gersh reports on today's developments on Capitol Hill.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: With the number of people testing positive for exposure to anthrax rising, Congressional leaders announced they would be closing down Capitol Hill office buildings so health workers could search for evidence of the bacteria.

REP. DENNIS HASTERT, HOUSE SPEAKER: We thought that the best and prudent situation was to ask and to do an environmental sweep to make sure that we didn't have any anthrax spores loose and moving around any of our office buildings, or in the Capitol itself.

GERSH: The House adjourned until next Tuesday, but Senate Majority Leader Tom Daschle vowed the Senate would keep working. Many of the hill staffers confirmed as exposed to anthrax worked in his office, but Daschle said so far, none of them were actually infected.

SEN. TOM DASCHLE, MAJORITY LEADER: Everyone will be OK. I am very confident about that, given the medication and the fact that it was provided early.

GERSH: This morning Wall Street was rallying on better than expected earnings news, but word anthrax was closing down the Capitol and news the bacteria was found in New York Governor Pataki's Manhattan office crushed any enthusiasm, although the sell-off was surprisingly mild.

MICHAEL FARR, CHIEF INVESTMENT OFFICER, FARR, MILLER & WASHINGTON: It sure seemed like a big deal to have this disease on Capitol Hill, in the United States of America, and see the markets trade off 150 points.

GERSH: Investors were also disappointed today by what some saw as a gloomy assessment of the economy from Fed Chairman Alan Greenspan. Greenspan told the Joint Economic Committee it was still too early to know how much damage the terrorist attacks had done to the economy, and he called the recovery since September 11th uneven. Car sales and housing remained firm, but airlines, hotels and consumer goods are off sharply.

ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE BOARD: All in all, I think we are looking at a situation which is by no means as bad as numbers of us are fearful it might turn out to be, but it also has not exhibited a sharp snap back.

GERSH: Greenspan warned productivity also would suffer in the short run as companies spend more on security and backup facilities.

GREENSPAN: And the consequence of that is you have an elevated level of input without changing output and so that you get a one-shot adjustment.

GERSH: Greenspan said the Fed's nine rate cuts this year have helped keep the economy standing, and although he didn't give any hints, many economists expect further rate cuts at the Fed's November 6th meeting. 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.

10/17/01: The Nation's Biggest Banks Deposit Declines For The 3rd Quarter

PAUL KANGAS: Also out with earnings today, the nation's biggest banks. Citigroup and J.P. Morgan Chase both reported sharp declines in profits. Erika Miller looks at what was behind the weakness.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT The news from the nation's two largest banks wasn't pretty, but it wasn't nearly as bad as many on Wall Street had feared. Citigroup and J.P. Morgan Chase reported lower third quarter profits, but both were in line with reduced consensus forecasts. Citigroup hit its target, earning $0.63 a share, down from $0.67 a year ago.

HENRY McVEY, FINANCIAL SERVICES ANALYST, MORGAN STANLEY: I'd say by and large it was an excellent quarter. They kept credit in check. That was a big issue with investors. Also, they did an excellent job on the investment banking side, and they continued to cut costs.

MILLER: But the weak economy and sluggish stock market dragged down results. So did losses related to the September 11th terrorist attacks, including massive insurance claims at its travelers unit, the temporary closure of the stock market and some bank branches, and a sharp decline in trading activities. But the company remains optimistic. It expects to post 15 percent earnings growth in the fourth quarter, assuming market conditions remain stable. Meanwhile, rival J.P. Morgan Chase reported a profit of $0.51 a share, a penny better than forecast, but down from $0.68 a year ago.

DIANE GLOSSMAN, BANKING ANALYST, UBS WARBURG: Under the circumstances, I thought the numbers were really pretty good. And while that may sound like an odd thing to say, given the negative comparisons year over year, you have to remember that the summer saw extremely low levels of activity in capital markets.

MILLER: The nation's second largest bank blames the weakness on many of the same factors that hurt Citigroup. And the company says it has no basis to think the fourth quarter will be better than the third. But some Wall Street analysts say now is a good time to buy Citigroup and JP Morgan shares.

GLOSSMAN: Both of these have been quite distinguished in being proactive in cutting expenses as they have prepared for a tougher revenue environment. So I give them both very strong marks.

MILLER: Less than half of the financial firms in the S&P 500 have reported quarterly numbers. So far, results are running seven percent below last year, but slightly ahead of consensus forecasts. 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.

10/17/01: Japan's Economy Is Getting A Jolt From The Terrorist Attacks On America

SUSIE GHARIB: Japan's economy was already stagnating before September 11. Now, economists there say that terrorism and recession will send the world's second largest economy into the red even more. As Lucy Craft reports from Tokyo, many analysts are still pessimistic about the country's prospects for growth.

LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: The terrorist attacks and aftermath have deeply shaken Japan, which relies on the U.S. to absorb 40 percent of Japanese cars, electronics and other exports. Japan's economy is expected to keep shrinking through fiscal 2002.

ANDREW SHIPLEY, CHIEF ECONOMIST, WESTLB SECURITIES: Certainly all hopes of recovery at this point, I think have been squashed.

CRAFT: The catastrophe could offer a golden opportunity, say some observers, for Japanese officials to get serious about getting rid of Japan's massive non-performing loans. Bad loans are officially estimated at around five percent of GDP, but some foreign analysts say bad debt could amount to as much as 25 percent of GDP. And they're still pessimistic about a bank clean up.

RONALD BEVACQUA, SENIOR ECONOMIST, COMMERZBANK SECURITIES: We have had so many fatal blows over the past 10 years, everything from the yen rising as far as 80 yen to the dollar back in 1995, the collapse of the stock market, the collapse of major corporations, the serin gas attacks, the earthquakes, the Asia crisis. Anything you can possibly think of has already happened and it still hasn't gotten the authorities to move.

CRAFT: Authorities can afford to keep dithering, say critics, because despite the nation's intractable financial woes, Japan still has a healthy current account surplus, enough cash to keep inefficient and nearly bankrupt companies on life support.

BEVACQUA: Things happen on the margin. There's always incremental changes going on. But a sort of a single blow that's going to finally and definitively begin to deal with the structural problems in the economy or at the very least begin to clean up the banks is not really in the works because of the political opposition, because of the unwillingness to use public funds and, again, because the political pressure to do anything doesn't really exist.

CRAFT: Despite having been elected on promises of radical reform, Prime Minister Koizumi (ph) remains tightly constrained by his own party, the conservatives which have ruled Japan for nearly all the last 50 years. Japanese conservatives have always put a premium on social and political stability, not economic dynamism.

SHIPLEY: And that's what I'm concerned about. We know the problems. We know the solutions. But is the Japanese political system mature enough or willing or able to adopt the reforms needed to kick start growth here? And the jury is still out, I think, in that regard.

CRAFT: In every previous downturn, Japan has counted on exports, especially to the U.S., to generate a recovery. With the U.S. headed for a recession of its own, Japan's only option is to stoke demand here at home. But foreign analysts are skeptical about Japan's ability to do that. Lucy Craft NIGHTLY BUSINESS REPORT Tokyo.

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.

10/17/01: Money File-Who Will The Collection Program Collect From Next?

SUSIE GHARIB: In the money file tonight, some Americans could be facing problems in the next few months thanks to changes in a government program. Here's Kathy Kristof to explain. She's a business writer for the "Los Angeles Times" and author of "Investing 101."

KATHY KRISTOF, AUTHOR, "INVESTING 101": Retirees may get an unpleasant surprise as a result of a government collection program that ramps up this fall. The collection program that ramps up this fall. The collection program was authorized by a 1997 law that gave federal authorities greater powers to go after Americans who owed the government money. Until now, this collection program was nabbing relatively small groups of government employees and contractors who owed money on defaulted student loans, back child support and taxes. But starting in November, some 232,000 Social Security recipients will be targeted. Government auditors believe these retirees owe $311 million annually in back taxes. If these retirees don't respond to the notices, the government will start deducting their back tax bills from their Social Security checks. Up to 15 percent of each payment could be confiscated until the entire tax debt is paid in full. However, many financial experts believe that the targeted retirees may not have enough money to pay the taxes and still pay their bills. If that's the case, they could qualify for so-called hardship exemptions. Those who qualify will be exempt from collection until their financial situation changes. But what retirees cannot do is ignore the notice. If you do not respond, the government will start to deduct the tax payments from your checks starting this February. If you get a tax notice, call the number on the notice or call your local taxpayer advocate's office. They are a division of the internal Revenue Service that's aimed at helping individuals who have tax problems. Their numbers are listed in the government section of your phone book.

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.

10/17/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened nicely higher today, thanks largely to yesterday's post-market earnings report from IBM (IBM), which was a penny above lowered expectations and Intel's (INTC) results which met analysts' estimates. With hopes alive that these two high-tech titans were indicative of a generally better than expected quarterly corporate earnings season, buyers bid up the Dow Industrial Average to a 94-point gain by 10:00 a.m., while the NASDAQ Index posted a 17-point advance. The early upturn soon began to fade following those less than optimistic comments from Fed chief Greenspan and then the market turned decisively lower during mid-session in the wake of still more anthrax incidents. By 1:30 this afternoon, the Dow fell to an 87-point loss. NASDAQ Index down 42. The sell-off gathered momentum for the rest of the session as the widening anthrax scare sent potential buyers to the sidelines. The Dow Industrial Average fell to a closing loss of 151.26 points, or 1.6 percent, and now stands at 9232.97. The NASDAQ Composite Index ended with a loss of 75.73. That's 4.4 percent and it now stands at 1646.34.

Big board volume up rather sharply from yesterday to 1.44 billion shares and 2 1/2 times as much down volume as up volume.

The Dow Transport Index down 69 1/4 points.

Utilities fell over 3 1/2.

And the Closing Tick just mildly bearish, -199.

Standard & Poor's 500 off nearly 20 1/2 points.

Almost a 9 1/2 point drop in the 100.

The MidCap 400 fell just over 12 points.

And the Bridge Futures Price Index edged up .11.

A loss of 7 1/3 points in the New York Composite.

Same story with the Value Line.

Russell2000 Small Cap off just over 10.

And the broadly based Wilshire 5000 dropped 201 ½ points or 2 percent.

The bond market moved in a narrow range today with some early selling induced by a surprising 1.7 percent rise in September new housing starts, but prices then firmed up partly in reaction to the Greenspan comments, but probably more so due to safe haven buying triggered by the expanding anthrax scare. At the close of trading, tax-free and corporate issues were mostly unchanged while the Treasury market was mixed with weakness in the short end and strength in the long end.

The 5-year notes down 2/32.

No change at all in the bellwether 10-year note.

30-year bond though had a good day, up 16/32.

And the Lehman Brothers Long-Term Treasury Bond Index rose 3.20.

We have a market that is being poisoned by anthrax. It's just unbelievable how much selling took place this afternoon after the widening scare. 151 ¼ points on the down side for the Dow, 1.6 percent. And exactly in a reverse of yesterday, declines led advances today 19 and 11, 19 to 11. 54 new highs for the year, though, 43 new lows.

EMC (EMC) topped the active list on a heavy 41.8 million shares, the stock down $2.24. That's a loss of 16.7 percent today. The company reported a third quarter loss of $0.12 a share. The Street estimate was only for a $0.05 loss and that's versus earnings of $0.20 last year. And sales, listen to this, tumbled 55 percent.

AOL Time Warner (AOL) down $2.69. Third quarter earnings were about as expected. Merrill Lynch, however, downgraded the stock from "buy" to "near term neutral."

Nortel (NT) down a $0.10.

Citigroup moved up $0.47.

And then General Electric (GE) down $1.32, fifth in volume.

Lucent Technologies (LU) dropped $0.08.

AT&T Wireless (AWE) dropped $0.28.

IBM (IBM) closed up $1.05, but it traded as high as $106.40 this morning on those better than expected earnings out post-market yesterday.

Nokia (NOK) edged up $0.02.

Eli Lilly (LLY) dropping $4, tenth in volume. An FDA advisory committee is split over approving the company's biotech product called Zigris for the treatment of sepsis. Standard & Poor's downgraded Lilly's stock to "avoid."

Avon Products (AVP) rang up a gain of $1.67. Third quarter earnings rose nine percent to $0.44 a share, in line with expectations.

Cadence Design (CDN) moved up $1.40. Third quarter operating earnings, $0.22, way up from $0.14 last year. Revenues were up eight percent.

Delta Air Lines (DAL) down $1.84 in sympathy with what United said. You heard that earlier.

General Dynamics (GD) dropping $7.35. Third quarter earnings lower, $1.13 versus $1.47 a year ago. And the company sees full year earnings at the low end of estimates.

International Paper (IP) fell $1.28. Third quarter earnings dropped 74 percent from last year, $0.14 versus $0.53. However, that was better than the Street estimate of only a $0.05 a share.

And then Philip Morris (MO) down $0.68. Third quarter earnings rose eight percent to $1.07 a share versus $0.99 last year, in line, and the company sees full year earnings growing by nine percent.

Plantronics (PLT) one of the better percentage gainers of the day, up $2.69. This company makes telecom headsets. Fourth quarter earnings were $0.14, way down from $0.39 a year ago, but that was a $0.01 above estimates and Merrill Lynch upgraded the stock from "accumulate" to "buy."

Capital One Financial (COF) rose $4.76. Third quarter earnings higher, $0.75 versus $0.70 last year and a 38 percent jump in revenues. Prudential issued a "buy" on the stock.

Integrated Electrical Services (IEE) the big percentage loser. The company sees fourth quarter earnings of only $0.08 to $0.09 versus its earlier projection of $0.30 to $0.32.

Dana (DCN), the auto parts maker, down $3.26. a third quarter loss reported today of $0.05 a share versus earnings of $0.41 a year ago. Dana will cut its workforce by 15 percent and it's slashing its fourth quarter dividend to $0.01, down from $0.31 last year.

Oakley (OO) down $2.31. Third quarter earnings $0.21 versus $0.25 last year, in line with estimates. But the company sees a fourth quarter of only $0.09 in earnings.

Three Five Systems (TFS) down $2.93. After the close, the company came out with a third quarter loss of $0.19 a share versus earnings of $0.19 a year ago.

NASDAQ trading, a loss of 75 ¾ points. Volume popped up considerably from yesterday to nearly 2.3 billion shares. For every 13 stocks higher, 21 lower.

Intel (INTC) topped the active list, down $0.39, despite those earnings out after the close yesterday but in line.

Microsoft (MSFT), whose earnings are due out tomorrow, down $2.42.

Cisco (CSCO) fell $1.37.

Juniper Networks (JNPR) a $1.82 loss.

And then fifth in volume QUALCOMM