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America Under Attack: Markets Are Subdued

Aired September 14, 2001 - 02:45   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.
COLLEEN MCEDWARDS, CNN ANCHOR: All right. Just want to update you on the market situation a little bit here. The New York Stock Exchange and the NASDAQ will remain closed this Friday. But elsewhere in the world, markets are open.

The mood has been quite subdued. Let's get an update, now, with Richard Quest, who is in London for us. Richard, how's it looking there, now?

RICHARD QUEST, CNN CORRESPONDENT: You're quite right, Colleen, the markets in the United States are closed. It will be eight -- 9:30 eastern time on Monday when U.S. stock markets reopen for business. That, indeed, is the longest closure since the Great Depression. And most analysts do not expect massive selling to occur, because policy makers, the FED, the European Central Bank, the Bank of Japan, they've all ensured investors that there's sufficient cash, or liquidity, in the words of the market, to support the financial system. Many are also anticipating that there could be a lowering of interest rates that would help revive the U.S. economy.

Now, turning to what it's been for the rest of the week in the Global Markets. In Asia, the Friday session has finished on surprisingly upbeat note. The NIKKEI average has closed four percent higher. Hong Kong' market, having been down earlier, again, that's up 1.3 percent. Singapore's Straits Times is off 2.6. It's very much an unwinding of the initial reaction that was seen earlier in the week, as of course, calmer minds now take over.

European investors have regained their composure, too, in the last two days, even though there's still a tremendous amount of uncertainty about how Wall Street will behave when trading finally resumes. An indication of the likely way that Europe will open when trading kicks off, that's in about 15 minutes' time, Cantor Index says that the London FTSE will start about 23 points on the low side, the DAX index about two points higher, the CAC 15 -- that will be up around 15 points. There's the sort of numbers we might expect on any normal day.

There was a partial resumption of U.S. Commercial and Cargo traffic on Thursday, two days after the attacks. Normal operations, though, look days, or even weeks away, and the airlines' financial losses keep mounting, with only a fraction of the 4,000 U.S. planes in operation. Daniel Solon is a consultant for Avmark International. He joins me now to take a close look at the attacks that have taken place, and indeed, on the industry. Daniel, we know that few flights are starting to fly, but the reality is for international travel to and from the United States. It's going to be many days, weeks possibly, before the schedule looks like anything approaching normality.

DANIEL SOLON, AVMARK INTERNATIONAL: Exactly. So, and of course, this is already approaching a slower period of traffic than the high summer months, so it is likely that it will be some while before things regain even normal operational status.

QUEST: What's the major difficulties. Is it the planes and passengers aren't in the right places? What's the --

SOLON: It takes a long time, really, to crank up again, when you have aircraft that are parked at the wrong airports, for obvious reasons of security. I would think that probably, within a matter of a few days, that aspect of it can be sorted out, but there will, of course, be all of the other disruptions; people's baggage having been routed to someplace that they weren't going, and all of the rest of it.

QUEST: The effect on the airlines is going to be dramatic. Not just because of the four days' loss of revenue from -- over this immediate time, but looking forward, there will be clearly, a great reduction in the number of people who want to travel.

SOLON: Well, I think that is true. Obviously, because of the impact of the tragic loss for surviving family members and friends of people who perished in these attacks. That tends to have a depressing effect, much more widely spread. But beyond that, we were already in a situation prior to these tragic events, when traffic was down, and notably business traffic -- the profitable high-yield part of the business within the United States, and traffic originating there for international travel had dropped off rather sharply before these events.

QUEST: Daniel, many thanks, indeed, Daniel Solon, for that. And that's all from London, for the moment. Now back to Colleen in Atlanta, for the rest.

MCEDWARDS: All right, Richard. Thank you so much.

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