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Stock Market Performance Less Bad than Yesterday

Aired September 18, 2001 - 15:58   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.
LOU DOBBS, CNN ANCHOR: I'm Lou Dobbs in New York. The market is retreating today but nothing like yesterday's sharp sell-off. That weakness seeeming quite mild, in fact compared to what we witnessed yesterday. The Dow Jones Industrials falling further below that 9,000 level after regaining it, hovering near three-year lows as we approach the close, the Dow now off 34.59 on the board that you see behind you at the exchange.

Because of the heavy volume those numbers are going to be in some disagreement as the computers and systems try to keep up with this heavy volume. Again the Nasdaq off 25 points, while the S&P 500 off almost 7 points. The Nasdaq giving back earlier gains as obviously has the Dow, finishing, we expect, lower on the day, unless we see an abrupt reversal here in the next few minutes.

Trading volume considerably lower than yesterday. Bond prices also plunging today for the second straight session. Let's go to our correspondents as we awain the close here, Christine Romans is at the New York Stock Exchange. Christine, quite a modest performance today in the market compared to yesterday.

CHRISTINE ROMANS, CNN CORRESPONDENT: Absolutely. Folks telling me it is a state of confusion. Markets don't know where they want to be, and that is exactly what you would expect after the kind of a sell-off we saw yesterday.

Looks as though, unless something crazy happens in the next minute, we are going to close below the 9,000 mark. When you look at a chart of the day you can see the state of confusion. The Dow actually moving higher earlier in the session, holding onto its gains, hitting its peak just before 2:00, and then just as is the pattern that we have been seeing all summer, you get a real direction of the market coming in the last hour or so, and that direction was lower.

A little bit of a modest uptick off the worst levels of the sessions, Lou, but you can see that we are closer to the bottom of the day's trading range than the top. Still, traders pointing out, 32 points on the downside. Simply it is good news after what we saw yesterday -- Lou.

DOBBS: Thank you, Christine Romans. Greg Clarkin over at the Nasdaq market site as we approach the close. Also, again, somewhat quieter performance today. GREG CLARKIN, CNN CORRESPONDENT: Exactly, Lou. We spoke to a number of trading desks today, and we are hearing really the same kind of theme: There is really just too much uncertainty. That is what traders say they are hearing from their clients, and a lot of folks really just don't know which way to go just yet on this market.

So, in light of that what we saw today was lighter volume, but still more selling pressure, even some of those airline stocks got a pop on the hopes of a bailout package gave back late in the session and we are seeing the Nasdaq down around the 1,550 level or so, it was as low as 1,548, so it has come a few points off that low, but still, not a lot of bright spots out there again today, Lou.

DOBBS: Amongst the bright spots, give us a few examples, Greg.

CLARKIN: Sure, we did see a couple of Internet stocks make nice gains. Ebay came out and said that they reaffirmed their guidance for the quarter. So corporate news kind of driving some of these pops, rather than (INAUDIBLE).

DOBBS: We're now looking at the New York Stock Exchange. The closing bell -- Greg, sorry to interrupt. We want to watch these numbers as the market closes. The closing bell is about to ring in just matter of seconds. Again, yesterday's sell-off pushed the Dow obviously into bear market territory. And the bell is -- has concluded the session off 21.45 for the day. The Dow is now down again just about 24 percent from its all-time high.

Christine, let's go back to you. I want to talk about first the airline sector, which was extraordinarily weak. Yesterday, we saw a bit of bounce back today.

CHRISTINE ROMANS: Yes, we sure did. A lot of folks telling me that market was oversold, that part of the market. And that's, you know, trader talk for people were selling it aggressively yesterday and just sold it too much in comparison with the fundamentals. They're watching what's happening in Washington and wondering if there's going to be a bailout package there.

So let's take a look at those airline stocks. You can see some of them moving up like 10 percent, 15 percent here today. And that was better now.

These are some of the movers for the Dow. You can see General Electric down $1.38. American Express down 2. Airlines, as I said, AMR up a bit there. So these are all groups that we're watching here today overall. And traders were pointing out, Lou, it was interesting that this market was moving on singular stocks and singular sectors. It wasn't moving as an overall market. So they said there was an optimism about the rebound in those airlines.

And at the same time, there was some pessimism later that helped pulled the market lower about names like GE, General Electric, on top of the most list, moving lower. American Express moving lower here as well. Boeing moving lower. These are all names within the Dow. All reasons why the Dow couldn't hold it into positive territory. Lou? DOBBS: Christine, thank you.

Greg at the close, what do you think?

CLARKIN: I tell you it was just again, another day of selling pressure. Nasdaq right now down about 70 percent from its March 2000 high. So obviously the composite has just been hammered. And today, a continuation of that kind of trading bound range that we see the Nasdaq in.

You know, Christine was mentioning the airline travel related stocks on the NYSE. If we take a look at some of the ones that trade on the Nasdaq, you're going to see again a mixed bag. Take Northwest Airlines. It was up 49 cents, but at one point, it was up about 8 percent. That gain right there that you see represents about a 4 percent gain.

Skywest was actually -- fell for a second day. Priceline.com, the online travel site, continuing to lose ground. And then Expedia, which now says that their bookings in wake of the World Trade Center disaster are off almost 60 percent. Expedia losing better than $4.00 today.

So again, Lou, those stocks were hit hard. As far as the big name technology shares go, a real mixed bag. We did see some gains for Microsoft and Oracle, but we did see Intel losing ground and Cisco, which had been nicely higher early in the day, turn things around and lost ground towards the end of the day.

And there you get the exact quotes there, Lou.

DOBBS: Right. It's clear, Greg, isn't it, that with this -- that we're going to see continued weakness in travel. And certainly the airlines even with this bounce back on the basis of a talk of a support package for the airline industry out of Washington.

CLARKIN: Without a doubt. Traders at this point say, you know, so that's going to help things, but until they get the real kind of proof, of that bailout package, that a lot of these stocks will continue to be under pressure. Even with that, they'll be under some pressure.

And you know, exactly really what traders are saying, Lou, I tell you, too much uncertainty kind of hanging over things. And a lot of folks just don't know which way to go at the moment.

DOBBS: Well, I will tell you this, with this what looks to be about an 18 point decline in the Dow today and a 24 point decline in the Nasdaq, about 6 points on the S&P, we're in pretty good shape following yesterday.

But thank you very much, Greg Clarkin from the Nasdaq marketsite.

Well Treasury bond prices, as they did yesterday, fell again. And they fell sharply. 30 year Treasuries down more than 2 full points in price, pushing the yield on the long bond. It's now at its highest level in two months. The government spending expected to rise in the wake of the recent attacks and the federal stimulus program that will be likely come out of Washington. Traders are now expecting a flood of new government debt to hit the market in the months ahead.

And major airlines, as we said, meeting with Transportation Department, looking toward formulating a package, an aid package in a number of forms, in point of fact. Tim O'Brien is in Washington, has that story for us -- Tim.

TIM O'BRIEN, CNN CORRESPONDENT: Lou, the CEOs of the country's biggest airlines met at the White House today with Transportation Secretary Norm Mineta. Mineta made no specific commitments, but he did make two general commitments that seemed to be shared by most, if not all of official Washington, to keep the airline industry financially healthy and to keep it safe.

NORM MINETA, TRANSPORTATION SECRETARY: There's no question the industry has been having financial difficulties, even before this heinous terrorist attack last Tuesday. Those events have made the problems more acute. We have, both industry and government, two key responsibilities as we meet here today.

First, public safety. And secondly, a financially healthy industry.

O'BRIEN: There seems little doubt the government is going to help the airlines, but whether the industry gets the $24 billion bailout it has requested, that's another matter. Earlier this afternoon, I spoke with Senator Phil Gramm, a former economics professor and long-time foe of government bailouts. But even Gramm said the airlines are entitled to compensation, at least for the losses they have sustained since last Tuesday.

(BEGIN VIDEO CLIP)

SEN PHIL GRAMM (R), TEXAS: There is a clear claim and that has to be paid, in my opinion Once you get beyond that, you got to start exercising judgment in recognizing that not only is it real money coming from real people. But the more you go in the direction of compensating beyond the clear claim, the stronger the claim that other industries have in asking for the same kind of treatment.

(END VIDEO CLIP)

O'BRIEN: Gramm points out that getting planes back in the sky is vital for U.S. commerce. It may take time. The government will chip in some. But so may the traveling public, paying higher prices for fewer tickets. Lou?

DOBBS: Tim, thanks. Tim O'Brien in Washington.

And obviously, a lot of impact here on Wall Street as a result of the terrorist attacks. And some of the changes that will influence this economy and this -- and these markets. I'm joined now by fund manager Chris Krisate (ph). Chris, this market today, we still have preliminary numbers that have been showing on the screen. They'll be preliminary here for a while. It looks like a pretty good performance for the day after.

CHRIS KRISTATE, FUND MANAGER: I'd say, Lou, a huge sigh of relief. Really, we've had the highest Rosh Hashanna volume we've ever had. We had high volatility. And we had institutions still unwilling to make a commitment. And with all that uncertainty, still a pretty flat market.

DOBBS: To see these airlines come back today, even with all of the talk of the bailout package out of Washington, did that surprise you?

KRISTATE: Not really. The bailout package did it, too. But the valuations in the airlines, Lou, if you can pick some that'll be in business in two years, and clearly American and United are in that camp, they're selling now at a fraction of book value. And people will still need to fly. And you'll certainly see some price pressure on those tickets.

DOBBS: The interruption in the economy, basically a standstill for four or five days. Any significant impact, do you think, in terms of market valuations?

KRISTATE: Certainly in the immediate term, that's going to affect our third quarter and certainly our fourth quarter GDP. But one thing that we haven't heard mentioned in all the news reports is the word lock box or deficit. We're going to spend a lot of money.

DOBBS: Are you grateful?

KRISTATE: I'm grateful that they're going to spend some money, sure. That's one good thing that'll come out of this tragedy.

DOBBS: The -- when I said, grateful, grateful not to have heard anymore about the lockbox.

KRISTATE: Sure, that's right.

DOBBS: Rather to get to the serious and concrete issues surrounding those policy The economic stimulus package that we're talking about is going to take many forms. There will be the overt form, the business of the bailout for the airline industry, but there's also just simply military spending that we can expect.

KRISTATE: There's military spending. And don't, of course, discount the liquidity injections of the Fed.

DOBBS: Right.

KRISTATE: Which have been fast and furious. And we think that'll help more than anything, probably.

DOBBS: Your best advice, Chris, to investors, because this is, as we have been reporting for some time and as everyone knows, a period of great uncertainty. What should an investor be doing here?

KRISTATE: I think honestly, you should steel yourself. Check your gut. And move out of some defensive stocks and out of cash, and into some more aggressive stocks particularly like the telecoms. We didn't -- 18 months ago, they weren't nearly as good as people thought they were. And now they're not nearly as bad as people are saying.

DOBBS: And the idea that one moves into telecom, are you suggesting here some caution at least? You sound aggressive when you say telecom.

KRISTATE: Oh, yes. Well, yes, I would say Lucent, for example, is our favorite player. It's down 90 percent. We think, not only will it not go bankrupt, but they will be a beneficiary of a wireless buildout and infrastructure buildout in lower Manhattan. And stocks like that, that have gone down 80, 90 percent, as long as you do the math and you're sure they'll be around in two years, we think they're going to be good investments.

DOBBS: And we'll be sure -- how are we going to be sure they're going to be around in two years?

KRISTATE: Well, that's the job of your analyst. That's our job.

DOBBS: You just moved to issue of visibility, I guess.

KRISTATE: Sure.

DOBBS: Chris Kristate (ph), thanks very much.

KRISTATE: Thank you, Lou.

DOBBS: Well, that's a quick look at the financial markets and what is happening in the economy, just after the market is closed. We will, of course, be back with MONEYLINE at 6:00 Eastern.

We'll have a complete wrap up for you of the day's business economic and other news. Former Defense Secretary William Cohen will join us to offer his insights into the military options being explored right down by the White House and Pentagon. And we're going to focus tonight on Osama Bin Laden's money, his sources of money and how the international banking and financial system is supporting the transfers of those monies, all that coming up at 6:00 here on CNN. And we, of course, will continue our coverage of America's new war in just a moment. I'm Lou Dobbs.

(COMMERCIAL BREAK)

JUDY WOODRUFF, CNN CORRESPONDENT: I'm Judy Woodruff in Washington.

JOIE CHEN, CNN CORRESPONDENT: And I'm Joie Chen at CNN Center in Atlanta. It is Tuesday, now one week into America's new war against terrorism.

WOODRUFF: Joie, this day is a first milestone on the road to recovery. But at ground zero in New York, where emergency crews keep working around the clock, the long hours often seem to run together in a haze of smoke and ashes. Mayor Rudy Giuliani now saying the chances of finding anyone alive inside the rubble of the World Trade Center are "very, very small."

CHEN: Let's check now some of the latest developments, and some new views of the devastation.

We have this afternoon new, very close-up video of the World Trade Center ruins. This was shot by photographers from the Federal Emergency Management Agency. The images, as you see, are as devastating as the latest numbers. 218 now confirmed dead in New York. More than 5,400 reported missing.

Also today, Attorney General John Ashcroft confirms that investigators are looking into the possibility that more than four planes may have been targeted for hijacking by terrorists like Tuesday. And he says that the government is moving to expand its power to detain people on immigration violations.

Meantime, the FBI is conducting a nationwide manhunt for 185 people who may have information about the September 11 attacks. U.S. officials tell CNN one of the suspected suicide hijackers, Mohammed Atta, met with an Iraqi intelligence official in Europe sometime earlier this year. They cautioned that that does not necessarily mean that Iraq had a role in the terrorist strikes.

Meantime, Philippine investigators tell CNN they warned the FBI six years ago of a terrorist plot to hijack commercial planes and slam them into the Pentagon and other buildings.

In Afghanistan, Islamic clerics have yet to begin a meeting to decide whether to hand over the prime suspect in last week's terrorist attacks. And that is Osama Bin Laden.

And in the wake of those attacks, on America, a move is bloodshed and terror in the Middle East. Israel now says it is stopping all offensive operations against the Palestinians after the Palestinian leader, Yasser Arafat, publicly reaffirmed his commitment to honor a cease-fire -- Judy.

WOODRUFF: And now we go to Afghanistan for more on the status of that meeting of Islamic clerics and the fate of Osama Bin Laden.

CNN'S Nic Robertson in Kandahar, Afghanistan.

Nic, the meeting postponed?

NIC ROBERTSON, CNN CORRESPONDENT: Well, we understand that it's been taking a long time for all these clerics to get in from around Afghanistan to Kabul. The country is pretty much devastated by 20-odd years of conflict here. And most of the roads here don't have tarmac on them. So understandable that it's taken those clerics some time to get there.

Some of them have to travel up to 400 miles. We've also been advised that their meeting could last two to three days. The way this council of 600 clerics works is that it'll work by unanimity. So those that are in the majority will be trying to convince the minority that they're right. It's not like a western democracy. It's not like Congress, but there'd be a simple vote.

And the majority would carry it. Everyone has to be onboard with the final decision. Now the two things we understand that they'll be debating is, one, what should happen to Osama Bin Laden should the demands from the United States be met and should the Taliban hand him over for trial outside of Afghanistan.

The other issue is what should Afghanistan do if attacked by the United States? And we understand that one of the options they could turn to would be to call for an Islamic Jihad or holy war against the United States, if that's the case. There's going to be two or three days, however, we've been advised before we find out the outcomes on those issues -- Judy.

WOODRUFF: Nic, how you would characterize the pressure that Afghani-Taliban leaders may feel that they're under right now?

ROBERTSON: This is probably the greatest pressure that they've been under since they came to power five years ago. Essentially their biggest ally here, Pakistan, has turned its back towards them and is now backing the United States and its fight against terrorism.

The Taliban recognized that. They recognized also that should there be a sustained campaign against them, they could lose their grip on the leadership here. However, they have always been very dogged in their determination to try and turn Afghanistan into their idea of a pure Islamic state, that is one where women don't work. That is one where women stay at home. That is one where men pray five times a day and grow their beards long. It is one that has many rules and restrictions completely unfamiliar to rest of the world and unfamiliar to many other Islamic countries.

So their ability to turn their back on the rest of the world in the face of great international pressure, they're probably some of the world's greatest leaders in that regard in terms of just ignoring what the rest of the world has to say, Judy.

WOODRUFF: Nic, much of the speculation is that the Taliban will find it very difficult to do as the Pakistanis are demanding to turn over Osama Bin Laden. Failing that, are there intermediate steps that they might try to take?

ROBERTSON: Well, in the case of the 1998 bombings of the U.S. embassies in Kenya and Tanzania, one of the ideas that the Taliban authorities put forward was that if they were presented with enough evidence that convinced them that Osama Bin Laden was involved. And they said that they might consider giving him to a third Islamic country, another country for trial by Islamic scholars, Islamic scriptures dictate that no Islamic country can hand over a Muslim to another -- to a non-Islamic country.

So one of their only options, a climb down option, it would have to be would be to hand over Osama Bin Laden to another Islamic country for trial by an Islamic court. That would be a major climb down from the position they're in right now.

And certainly, we have no hard evidence to indicate that they're even considering it at this time. But that would likely be really one of their only ways out of the situation at the moment.

WOODRUFF: All right, CNN's Nic Robertson joining us from Kandahar by videophone.

Meantime here in Washington, President Bush continues to work on plans which presumably will target Osama Bin Laden, but Mr. Bush also took time out to praise America's giving spirit and to mark what he calls, the horrible week since the attack on the United States.

Let's check in now with our senior White House correspondent John King -- John.

JOHN KING, CNN CORRESPONDENT: Well Judy, another very busy day for the President, not surprisingly, as he tries to deal with the many challenges now before him because of those terrorist strikes a week ago.

First and foremost for the President today though was taking a moment to remember. Mr. Bush led the senior White House staff and the Vice President Dick Cheney into the south grounds of the White House earlier this morning. You see them forming here. Other aides on the balconies of the Old Executive office building and throughout the grounds.

Once assembled, Mr. Bush bowed his head with his aides, having a moment of silence. That 8:45 a.m. this morning. See them bowing there, the moment the first of those planes, jet bombs if you will, struck the World Trade Center in New York.

Mr. Bush later in the day had a Rose Garden event featuring a few governors from states affected by this and leaders of charitable organizations and other groups helping raise money for the relief effort. Mr. Bush praising the spirit of the American people on the one week anniversary, a day when many would look back at the tragedy.

Mr. Bush making the case that yes, this was a devastating tragedy for the United States. But from it, he sees a dose of triumph.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll fight terrorism on all fronts. We will not be terrorized so that our hearts are hardened. Nobody can threaten this country. Oh, they may be able to bomb a building and obviously disrupt lives, but we're too great a nation to allow the evildoers to affect our soul and our spirit.

(END VIDEO CLIP)

KING: The administration obviously waiting with a sense of anticipation, you might say anxiety hear, to hear just what Afghanistan's ruling Taliban will do with that Pakistani request to turn Mr. Bin Laden over.

At the White House today though, that question came up to the press spokesman Ari Fleischer. On the one hand, the Taliban said several days ago, it believe there was no way Osama Bin Laden could be responsible for these strikes. Now of course as Nic Robertson just reported, Muslim clerics deciding to debate Mr. Bin Laden's fate, whether or not to turn him over Pakistan. A sense of frustration at the White House today. Mr. Fleischer indicating the President is getting impatient.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, PRESS SECRETARY: Afghanistan, at least the rules in Taliban have been all over the lot. They've been given a series of messages to the United States government, one seemingly contradictory from the another. So the message to Afghanistan remains loud and remains clear. Those nations that harbor terrorists will not be spared.

(END VIDEO CLIP)

KING; Now as we've covered this tragedy the past week, we have noted the President's rhetoric changed from day one to day two. It was on the second day when the President called this event, last Wednesday, an act of war.

Generally, you find the key documents in such cases like this 10, 15, or 20 years later in a presidential library. But the White House today releasing hand scribbled notes from the President of the United States to a top communication advisor, Karen Hughes. This became the substance of the President's remarks later that day. The President writing "this is an enemy, runs and that hides, but won't be able to hide forever. An enemy that thinks its havens are safe, but won't be safe forever." The hand scribbled words there by the President of the United States have become a central theme in almost every public statement he has made since.

And as the President continues his discussions today, much more activity on the diplomatic front. The President speaking today to the United Nations Secretary General Kofi Annan, a conversation with the Canadian prime minister Jean Cretien, their second conversation in the past week. And due here at the White House in just two hours for face- to-face consultations about possible military responses, other diplomatic efforts war on terrorism, the French President Jacques Chirac.

Judy?

WOODRUFF: All right, John King at the White House. So unusual to see presidential notes like that made public by the White House. Over at the Pentagon, meantime, the projected death toll from the terrorist attack on the nation's military headquarters went up to 189 today.

More from the Pentagon now, CNN's military affairs correspondent, Jamie Mcintyre -- Jamie. JAMIE MCINTYRE, CNN CORRESPONDENT: Judy, that death toll rising because at least one of the injured from last Tuesday's attack has succumbed to those injuries, pushing the death toll up by 1. Meanwhile, more tough talk here as the Pentagon lays the groundwork for military action. Defense Secretary Donald Rumsfeld telling reporters today that the United States will deal with terrorist networks by "draining the swamp they live in and dealing not only with terrorists, but the countries that harbor terrorists." He said, "These people are attacking America's freedom."

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: The people who committed these acts are clearly determined to try to force the United States of America and our values to withdraw from the world. Or to respond by curtailing our freedoms. If we do that, the terrorists will have won. And we have no intention of doing so.

(END VIDEO CLIP)

MCINTYRE: Rumsfeld said the United States has a choice, either to change the way we live, which he said was unacceptable, or to change the way the terrorists live. And he said we choose the latter.

There is unprecedented security here at the Pentagon as parking lots around the building have been cleared and new, tight security procedures have been implemented. And a clamp down on information that's normally routine as well. For instance, the aircraft carrier Theodore Roosevelt scheduled to deploy tomorrow. Normally, the Pentagon would tell us that its location was to go to the Mediterranean, which its previously scheduled mission. Now all they'll say is it's heading for parts unknown -- Judy.

WOODRUFF: Jamie Mcintyre at the Pentagon. We will have the latest on the investigations in last Tuesday's attacks from here in the U.S. as well as overseas in just a moment.

(COMMERCIAL BREAK)

CHEN: As workers continue to sift through what remains of the World Trade Center, and hope fades for finding any survivors, there's a moment to take out. New York firefighters are remembering today some of their own. This is a scene outside the firehouse at 8th Avenue and 48th Street. 15 firefighters from just this one station are missing, some of the 300 firefighters who still have not been found.

Flowers, candles, photos of the missing cover the area outside the station. If you would like to donate to the New York fire department's widows and children's fund, the number to dial for that is 212-683-4832. You see it at the bottom of your screen right there.

For the latest from the area near the search and recovery operation, CNN's Gary Tuchman joins us now -- Gary.

GARY TUCHMAN, CNN CORRESPONDENT: Joie, as I stand here, I still have a very tough time grasping that a week ago today, there were people jumping out of windows behind me, 1,000 feet in the air, knowing they had no rational chance of surviving, but suffering so greatly they had no choice. Much of this is still unbelievable.

It's been exactly a week, but in some ways, it feels like months. It's going in slow-motion. Behind me the search continues. But bad news from the mayor of New York City, Rudy Giuliani. He said there's "a very, very small chance that anyone is still alive." Not a huge surprise considering the fact that no survivors have been found since last Wednesday morning, but nevertheless acknowledgment that while the search effort continues, it's unlikely they will find anybody.

5,422 people are missing. 218 bodies have been recovered. What means is 5,640 people are feared dead. Earlier this afternoon, the governor of New York state, George Pataki, announced that financial aid will be offered to families of those killed and those seriously hurt.

(BEGIN VIDEO CLIP)

GEORGE PATAKI, GOVERNOR, NEW YORK: We're going to provide free state, university and city university education, tuition, room, board, fees, books, whatever the costs are, to every single victim of the World Trade Center family member.

(END VIDEO CLIP)

TUCHMAN: Even while the rescue mission officially continues, they're recovering rubble. They have been for days. So far, according to the mayor of New York City, about 100 million pounds of rubble have been recovered and brought to a landfill in Staten Island. That's of a total of about 2 billion pounds of rubble. That's just a rough estimate. There's no one who can accurately calculate that, but it's estimated to about 5 percent of the total rubble that's there.

Joie, back to you.

CHEN: Incredible. Gary Tuchman for us in lower Manhattan at this hour.

Now onto the latest. From what the investigators have been able to learn so far. Joining us here in the newsroom, CNN's Mike Boettcher, who's been following up no all aspects of the investigation.

Mike, what are they looking at now?

MIKE BOETTCHER, CNN CORRESPONDENT: Well, we're hearing a name now that's coming back and back again over the last six days. And that is Mohammed Atta. CNN national security correspondent David Ensor is reporting, according to intelligence sources, that Mohammed Atta, who was on that first American Airlines jet that crashed into the World Trade Center. This man right here, Mohammed Atta met with Iraqi intelligence, an agent there, earlier this year.

Now this is a very significant fact in the investigation, but intelligence sources emphasize that this does not mean that Iraq was behind this attack. But it's very intriguing to them, and they are looking into this.

Now Mohammed Atta's a very interesting figure. Let's look at his associations that we have. We have a graphic showing that Mohammed Atta was tied with all of the hijackers on United flight 175 that crashed into the World Trade Center south building and United flight 93, that crashed into Stony Creek, Pennsylvania in a field there.

All 9 he had an association with. Through this apartment you can barely see behind there, that was in Del Ray Beach, Florida.

Now Mohammed Atta also had an association, of course, with the hijackers on his American Airlines flight. So he looks to be perhaps a boss on the ground. Let's take a look at his travel. This is actually Zacarias Moussaoui, who is someone else that the FBI is looking at. We'll come back to him.

We will talk about in terms of Zacarias Moussaoui. He's being investigated by the FBI. He is in detention. Zacarias Moussaoui went to a flight school in Norman, Oklahoma, and also to Minneapolis. He's been in detention since August 17th. There is the belief that Zacarias Moussaoui may have known something about another hijacking, and in fact, FBI agents who were at the flight school in Oklahoma City about two weeks before the crash, the crashes this last Tuesday into the World Trade Center and Pentagon, and they were asking questions about this man.

Now, the FBI has said before that they have not had information linking flight schools to a possible terrorist attack. This would seem to contradict that -- Joie.

CHEN: Mike, explain to me. You started talking about the possibility Of a connection between Mohamed Atta and all those other figures you named there. Did they all stay together? Were they visitors? What do they know about that?

BOETTCHER: Well, all of them used it as an at address. Some actually lived there, others used it as mail drop, and others rented that particular apartment. And the other interesting thing that really coincides with David Ensor's information is the fact that Mohamed Atta came here from Germany in August of -- well, in the summer of 2000. He went to Florida, went to flight school, and then in February of this year he flew to Hamburg, Germany. We don't know what he did there. We know he's linked to an apartment the German police have raided. So he was there in Germany earlier this year.

Now, intelligence officials are telling David Ensor that don't -- aren't saying what country he was in. But we do know, through the German authorities, he was in Germany during that time, and that could possibly be the country of this meeting, but we don't have that confirmed, Joie.

CHEN: All right. We will see what else develops there. CNN's Mike Boettcher following up on the investigation -- thanks, Mike. The massive invasion (UNINTELLIGIBLE) does continue into the people of the forces that might have been behind the attack. U.S. officials have said they had no specific warnings about the attacks, but that they were aware of vague threats against u.s. targets.

Details now on a plot first discovered several years ago that may have foreshadowed what happened on Tuesday. CNN's Maria Ressa reports from the Philippines.

MARIA RESSA, CNN CORRESPONDENT (voice-over): A small fire in an apartment in Manila six years ago led investigators to a plot that may not have been taken seriously enough at the time.

Ramzi Yousef, the man behind the first bombing of the World Trade Center, was planning to recruit pilots to hijack U.S. jetliners and crash them into government buildings. That apartment fire tipped off police to Yousef's hideout. He fled, but agents caught his right-hand man, Abdul Hakim Murad, and Murad soon was telling a chilling tale.

1633:25xxxUNIDENTIFIED MALE: ... related to us about a plan in the U.S. that Ramzi said in the continent of U.S. to hijack a commercial plane and ram it into the CIA quarters in Langley, Virginia, and also the Pentagon.

RESSA: Investigators also found evidence targeting commercial towers in San Francisco, Chicago and New York City.

UNIDENTIFIED MALE: The targets they listed were CIA headquarters, Pentagon, Transamerica, Sears and the World Trade Center.

RESSA (on camera): Investigators in Manila say the information was turned over to the FBI in 1995. Those who worked on the case here say the story sounded far-fetched then, until much of it became all too true a week ago.

(voice-over): Ramzi Yousef once listed his occupation as "international terrorist" on an i.d. card. He has long been considered a disciple of Islamic militant leader Osama bin Laden. It is bin Laden whom the U.S. considers the prime suspect behind the hijackings of the jetliners flown into the World Trade Center and the Pentagon in the deadliest act of terrorism in history.

Yousef's right-hand man in Manila, Murad, was a pilot who admitted he had been trained in Afghanistan, as well as the U.S.

UNIDENTIFIED MALE: He was principally recruited by Yousef's group and bin Laden's group to undertake a suicide mission.

RESSA: Ramzi Yousef was caught in Pakistan and brought back to New York to stand trial for the original bombing of the World Trade Center. He was sentenced to life in prison.

Also found on a computer in the Manila apartment: a separate plot to bomb 11 U.S. airliners on overseas flights. Murad also was brought to the United States to be tried with Yousef for that conspiracy. He, too, is serving life in a U.S. prison.

But the question remains: Did the U.S. recognize then how a deadly threat could become a reality now?

Maria Ressa, CNN, Manila.

(END VIDEOTAPE)

WOODRUFF: We'll talk about whether leads were missed and have more views of America's new war from the nation's heartland. We'll join our Jeff Flock in Missouri after a short break.

(COMMERCIAL BREAK)

WOODRUFF: The most visible destruction from the terrorist attacks a week ago is in New York and in Washington and, of course, in that field in western Pennsylvania. But all across the nation there is damage and pain, and people are feeling the aftershocks, both personally and financially.

CNN's Jeff Flock has traveled hundreds of miles across the Midwest, talking to people in various cities and towns about the repercussions from last weeks terror. He joins us now from the Springfield Branson Regional Airport in Missouri -- Jeff.

JEFF FLOCK, CNN CORRESPONDENT: That's right, Joie, one of 539 commercial aviation airports across this country. You know the big ones, perhaps, but most of them are this size or smaller. Perhaps you see the security checkpoint behind me. If you look out in front of this airport, you also see another security checkpoint. You can't drive up to this airport now without meeting a uniformed police officer. That's the way it is now, in terms of the new security.

We can report to you also that about 40 percent of the traffic they typically have at this regional airport has now been eliminated, and I want to talk briefly to the man who runs this airport.

And, give me some sense. You've got about a $7 million annual budget and you expert to have a major shortfall this year, because of the decrease in traffic, yes?

UNIDENTIFIED FEMALE: That's correct. If all the forecasts hold true, we'll be looking at about 25 percent downturn in traffic, which in turn, relates itself to 25 percent less revenues. And that means about a $1.2 million shortfall in revenues for operations of the airport.

FLOCK: Now, we're talking about things like parking, for example. Outside the FAA has ordered you to move vehicles away -- and the parking lots this close to the terminal, to move them out of there, right? So you lose the use of that parking lot.

UNIDENTIFIED MALE: That's correct. Just in the short-term parking lot, we estimate that to be about $25- to $30,000 a month, and of course you lose revenues from rent-a-cars, the restaurant and all the other services that are provided to the customer in the airport. FLOCK: Now, you've also go, obviously, increased security. They're talking about asking you to erect a wall out there that would potentially keep any car bomb or something from damaging the terminal, is that correct?

UNIDENTIFIED MALE: That's correct. If we're going to take a look at putting part of our lot back into operation, we may have to be looking at building a blast deflection fence. And, of course, we haven't gotten into that issue yet. We're waiting for things to smooth out a little bit.

FLOCK: In terms of the security, you've got increased security personnel, as well, correct?

UNIDENTIFIED MALE: That's correct. And those -- the value (UNINTELLIGIBLE) revenues does not reflect an increase in cost.

FLOCK: Rob, appreciate it very much. Thank you. As we try to, Joie, put some face and give you some perspective on the impact nationwide, truly this impact being felt even in the small towns here across America. Back to you.

CHEN: CNN's Jeff Flock for us in Branson, Springfield Branson Regional Airport in Missouri today -- Judy.

WOODRUFF: Well, Joie, back here in Washington, the Senate intelligence committee is planning to hold hearings on Tuesday's attacks to consider why U.S. intelligence was not able to uncover or help prevent the terrorist plot. Senator Richard Shelby of Alabama joins me here in Washington. He is the vice chairman of the intelligence committee.

Senator, with all this information coming in in the last few days about these men apparently involved in these plots, is there any doubt in your mind now that there were tips and evidence out there that was just overlooked?

SEN. RICHARD SHELBY (R-AL), INTELLIGENCE CMTE.: Well, I can't say that, Judy. I know the intelligence agencies are going back, as they should, and seeing what could have happened, what information they had, maybe it was overlooked, if any. But it's too early to say that.

But I've said before, if there was information that was overlooked that could have prevented this attack, that's an intelligence failure of great magnitude. On the other hand, as a lot of us suspect, if there was not even a clue and we were totally surprised, shocked, then that, too is a big intelligence failure. I think the intelligence communities have a lot of answers to a lot of questions that are going to be coming up, not only with the American people, not only with the administration, but certainly with our oversight committees in the House and the Senate.

WOODRUFF: Senator, as I'm talking to you, we're looking at pictures released today by the Federal Emergency Management Agency of the destruction at the World Trade Center site. My question to you, Senator, with all this information that is coming out, how could it be put together so quickly, and still nothing was known ahead of him?

SHELBY: Well, Judy, you're asking the central question that everybody is asking, and we will be asking too, in the committee and in the Senate. How did this happen with not even an inkling, not even a clue? And if there was not a clue, then something bad is wrong with our intelligence agencies.

WOODRUFF: At this the point, Senator, are you beginning to form ideas about a couple of things that need to be done immediately in the area of intelligence?

SHELBY: Well, a couple of things I can talk about, Judy. One, something we've been pushing for a number of years. I know this is my seventh year on the intelligence committee -- I've chaired it for four-and-a-half. We have tried to push hard to bring back recruiting the best and the brightest of our young people in America to be agents on the ground. There is no substitute for human intelligence.

Also, the second thing, we've got to modernize at an accelerated pace at the National Security Agency, make no mistake about it. And there are other failings there, but I believe myself, that what we really need to coordinate all of our intelligence agencies, rather than have a dukedom here and a dukedom here, we've got to have a powerful director of central intelligence with access to the president, such as Colin Powell and Don Rumsfeld have -- a cabinet level position. But ultimately, Judy...

WOODRUFF: Senator, why wouldn't the head of the CIA fill that role?

SHELBY: Well, they would, but I don't believe that role has been filled in the last several years because you have so many other agencies, and they're not coordinating like they should, in my judgment.

WOODRUFF: So are you criticizing individuals right now who are at the head of the CIA and the FBI?

SHELBY: Well, I thin -- well, we have a new person at the FBI, somebody that I have a lot of confidence in. And the CIA director is somebody that I'm very fond of. I like him personally, he has done a lot of good things. But I don't believe myself that he has the stature of Colin Powell or Donald Rumsfeld. And believe me, in the future, if we're going to prosecute and win a war against terrorism, intelligence is the key to it. Central to it.

WOODRUFF: Senator, just quickly, to bring people back in as you say, who are capable of doing the human intelligence, what is the incentive for these people to want to come in and do it then?

SHELBY: Well, I think first, to serve their country. That's why people go in the Army and the Navy and the Marines and the Air Force, and also a lot of people stay in government because they're dedicated to this nation. And there's going to be a lot more of that since last Tuesday. WOODRUFF: All right, Senator Richard Shelby. And we have not given a name to the head of the CIA, but of course it is CIA director George Tenet. Senator, thank you for being with us.

SHELBY: Thank you.

WOODRUFF: First Lady Laura Bush talks with Oprah Winfrey about dealing with adversity. We'll bring you some of what Mrs. Bush had to say, after this.

(COMMERCIAL BREAK)

CHEN: Who would you turn to if you wanted to reach out to the nation, particularly its children and families?

First Lady Laura Bush today appeared on the Oprah Winfrey TV show to talk about the terror attacks. Mrs. Bush talked about ways to comfort children. She was also asked about her own anxieties.

(BEGIN VIDEO CLIP, "THE OPRAH WINFREY SHOW")

OPRAH WINFREY, HOST: Those of us who aren't in the hot seat, who are not in a pressure point, are feeling a sense of uneasiness and anxiety, but you feel none of that.

LAURA BUSH, FIRST LADY OF THE UNITED STATES: Well, I mean, of course I feel like everyone does, sadness and anxiety and -- but I also feel -- I know that everything is being done to make sure America is safe. I know about that. So, you know, because I know that, I feel reassured.

(END VIDEO CLIP)

CHEN: The first lady said it was important for parents to reassure their children, and she said it is also important to let children talk about what they are feeling now -- Judy?

WOODRUFF: There are opinion polls out there, Joie, showing, of course, as we know, a united America, 88 percent saying they support U.S. military action. And the president's approval rating stands at 86 percent.

But it may be just a matter of time before some political divisions start to emerge, and for more on that, I'm joined by CNN's senior analyst, Jeff Greenfield.

Jeff, are you starting to see small cracks in the unity?

JEFF GREENFIELD, CNN SENIOR ANALYST: I think you have to make a distinction. The unity behind the United States defending itself, I think, is solid and will remain so. But beneath that, you put it very well, you're beginning to see the first signs of what I think are going to be some political divisions. And the first one really goes right back to that interview you did with Richard Shelby -- not in what he said, but you can already see the signs of fingers being pointed. Conservatives are quarreling very much with some of the decisions President Clinton made. They're actually going all the way back to the days of Jimmy Carter. The Church Commission of 1975, and the subsequent reining in of the CIA. Decisions of Stansfield Turner, Jimmy Carter's CIA director, in getting rid of a lot of the experienced intelligence agencies, what is called, in the jargon, "human."

And I think you're going to see from more conservative folks, a lot of finger-pointing on who made our intelligence agencies weaken. And on the liberal side, I think you're already beginning to see some questions being asked, not quite so loudly, but some questions are bound to be asked, depending how much the administration wants to expand the role of government and, in the view of critics, curtail what people think of as civil liberties. I think those are two areas where division is likely to be heard, the louder one coming from those who are critical of the weakening of our intelligence agencies.

WOODRUFF: Jeff...

GREENFIELD: But they're not the only ones.

WOODRUFF: Picking up on your point about the government role in all of this, Ari Fleischer at the White House today asked about efforts to bail out, or rather to support the airline industry. And he was very careful to say this is not a question of ideology, here. The president wants to wait and see how much support the industry is actually going to need from government.

GREENFIELD: Right. But I think with -- in the broader political community, it still is, to some extent, a matter of ideology. There was an attempt to provide money to bail out the airline industry, I believe it was last week, and a number of people in Congress said: "Wait a second -- why are you bailing out the airline industry? The insurance industry may need it, various other sectors."

And that has, as you know better than I, Judy, have to do with what states are the senators from and where their ideology is. So you're going to see a lot of this.

WOODRUFF: How are we going to know, Jeff, if some of these disagreements turn into a real moving away from positions that important, powerful figures in this country have held for their entire adult lives?

GREENFIELD: Well, that's -- I think you raise a terrific point. For a lot of people, their political beliefs are deeply held, and so if you're asking a lifelong conservative, for instance, to vote to expand the role of government, to move away from a privatization position, that will be very tough. And I think that's one measure of how serious people are.

On the other side, I think you are going to see some liberals saying, you know, there's a point where civil liberties ends and the defense of the republic begins, and we have move that bar further than we would have liked to. That's going to be a real test, I think, of how big a crisis our political leaders believe we're in: their willingness to move away from some deeply-held positions.

WOODRUFF: Our senior analyst Jeff Greenfield, joining us from New York.

Remembering a week no one alive today is likely ever to forget: Garrick Utley shares his thoughts when we return.

(COMMERCIAL BREAK)

WOODRUFF: Exactly one week later, CNN's Garrick Utley reflects on the events that may haunt us forever.

(BEGIN VIDEOTAPE)

GARRICK UTLEY, CNN CORRESPONDENT (voice-over): It was such a beautiful morning in New York, a day to go to the park, if we had some free time. Or, if it was off to work, at least we could make plans to see friends that Tuesday evening, or that Broadway show we had been waiting months to get tickets to.

And if we were working in the World Trade Center that morning, there was that magnificent view of a world which offered no threat to American life. And then out of that clear, blue, peaceful sky: the unspeakable. And then the unspeakable was followed by the unthinkable: that it could happen again.

The terrorists chose their target well. Towering buildings are the city's identity. Rooted in bedrock of hard granite, they soar and thrust themselves ever higher, immovable, inviolable monuments to work, and for work, that New Yorkers have built for themselves.

Until the tallest monument became a trap, and then a tomb.

(SCREAMING)

UTLEY: Suddenly, a strange, frightening storm covered lower Manhattan.

UNIDENTIFIED MALE: I hope I live. It's coming down on me.

(SCREAMING)

UTLEY: And day turned to night. Was there chaos and panic? Of course there was. Was it followed by order, discipline and even a numbed calm during the massive exodus from lower Manhattan? Yes, it was. And there was something more.

(on camera): In just a few hours, this big city of eight million people turned into an intimate community of eight million people. Of course, there has always been this image of New York City as a tough town, and it can be. But when you cut beneath the surface, and Tuesday's trauma cut deeply beneath it, the reaction here was not that much different that what it would have been in any American town.

(voice-over): We have held nighttime vigils. Fire stations have become places of pilgrimage to honor those who died. An armory became a gathering place where hope dies slowly. A blood bank, an opportunity to give that most personal gift -- of life. Except there have been so few lives found under the ruins to save. Everyone in New York, it seems, knew someone, or knew someone who knew someone, who is missing.

For a city that believes that no challenge is too great, this is going to be a test. And a sign that the city will pass that test was heard during President Bush's visit to the rescue workers.

CROWD (chanting): U.S.A.! U.S.A.! U.S.A.!

UTLEY: It was a chorus of patriotism, a spontaneous oath of affirmation and determination. The toughness is still there.

On Monday, it was time to get back to work. American flags were handed out to commuters on the ferry from New Jersey to lower Manhattan, where the welcoming skyline now has a gaping hole. For those who drove to work, traffic was horrendous, delays interminable. New York life getting back to normal, or as normal as it can be, now.

On Wall Street, the markets reopened.

UNIDENTIFIED FEMALE (singing): God bless America...

UTLEY: Yes, the markets did plunge, but they did function, as the city does -- a city where everyone desperately wants life to be the same as it was, and hopes it will be -- hopes.

Garrick Utley, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: And for all of us in the rest of the country, on so many levels, New York will never be the same. I'm Judy Woodruff signing off for now. Our coverage continues.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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