10B • THE UNIVERSITY DAILY KANSAN
WEDNESDAY,SEPT.26,2001
THE WALL STREET JOURNAL CAMPUS EDITION.
WSJ.com
What's News- In Business and Finance
© 2001 Dow Jones & Company, Inc. All Rights Reserved.
Stock Market Reels, Recession Looms
Stocks went into a frenzy after terrorist attacks.
The stock market suffered through one of its worst weeks ever, with the Dow Jones Industrial Average posting its biggest weekly percentage loss in 61 years. Share prices have rebounded some this week, but the near-term prospects don't look good for the market or the economy. Some analysts believe the market won't stabilize until investors recover from the shock of the attacks and regain confidence in the nation's stability. Compounding that, a host of corporations are warning that their earnings may be even lower than forecasts made before Sept. 11. The attacks may also drive many companies to cut jobs in the weeks to come.
Before the attacks, some economists held out hopes that the economy could avert a recession. But now most of the pros believe there's no way around it. The consensus: The downturn has begun and will last until the end of the year. Many businesses and families are putting off big spending—everything from taking vacations to building corporate headquarters—until the picture improves.
Many economists think the economy will rebound in 2002, and some think the turnaround will come early in the year. The government may try to give the turnaround a hand: Lawmakers are preparing a package of tax cuts and other economic-stimulus measures that could total as much as $100 billion next year.
Airlines and Insurers Get Aid From D.C.
Airlines and insurance companies faced devastating losses after the attacks, but the government moved quickly to stem the losses.
Air-travel bookings plummeted in the wake of the attack—and so did earnings forecasts. Many carriers slashed thousands of jobs or furloled workers; jet maker Boeing said it may be forced to lay off 30,000 workers by the end of next year. Insurers, facing an estimated liability of $30 billion on the attacks, boosted premiums and sharply reduced coverage for airlines. Meanwhile, hotels and travel agencies have been flooded with cancellation requests and predict big losses—and job cuts—in the months ahead.
The government delivered an aid package that will give the airline industry $5 billion in cash and $10 billion in loan guarantees. The government also will help airlines shoulder their increased insurance load.
Tech Industry Fears A Crash Is Coming
Meanwhile, lawmakers are preparing legislation that would give the insurance industry a breather. Under the proposed rules, the government would become the insurer of "last resort" for practically all businesses that suffer future terrorist attacks—in other words, if insurers can't pay damage claims, the government will.
The attacks dealt another blow to the already limping technology industry, as businesses and consumers defer and reconsider planned purchases of electronic gear. This hesitancy on the part of buyers is likely to overwhelm the potential "replacement spending" in equipment that was destroyed or damaged in the attacks.
And that's just the next few weeks. The signs don't look good down the road either. The uncertain economy is leading many companies to shrink many technology-related projects, or put them on hold.
In addition, spending on online advertising plummeted in the wake of the attacks—bad news for ad-driven Web sites, such as Yahoo, that
E-Commerce Hit
Online buying declined during the day of the attacks and the day following.
(Online dollar sales, 9 a.m. Sept. 11 through 9 p.m. Sept. 12 EDT)
THE WEEK OF SEPTEMBER 24, 2001
CATEGORY % CHANGE
Travel -70
Consumer electronics -58
Books -45
Apparel -41
Total online sales -58
vs. Conc Sonntag den 14.08.2017
were already reeling from an ad-
spending slump that started last
year.
There were some bright spots for the tech industry, however: Sales of mainframes, servers and storage equipment picked up in the days after the attack as companies bolstered their backup and recovery systems. Sales were also strong for equipment used to set up wireless networks, videoconferences and Internet phone calls.
Two of the biggest players in the high-tech field resumed the daunting tasks that faced them in the days before the attacks.
Microsoft Corp, got back to its antitrust battle with the federal government. Government lawyers said they would make Microsoft's new operating system, Windows XP, a central focus in the final round of court hearings in their antitrust case against the company. Among the restrictions the government is likely to seek against Microsoft; banning the company from engaging in anticompetitive contracts; forcing it to disclose more of the inner workings of Windows to other software makers; and giving computer makers more power to distribute rival software on their PCs while preventing Microsoft from retaliating.
For Walter S. Mossberg's review of Windows XP, go to www.ptech.wsj.com and click on Personal Technology.
Microsoft, which is planning to release Windows XP in late October, said the conduct restrictions being considered "are every bit as radical as the now-discarded proposal to break up the company." In a separate move, Microsoft announced it would modify plans for its Passport service to allow rivals and other companies to set up similar services of their own. Passport is designed to let Internet users log on just once to get access to a host of Web sites.
Meanwhile, Hewlett-Packard Co. and Compaq Computer Corp. got back to the stump, trying to sell customers, stockholders and employees on the idea of combining the two companies, Company executives argue that the combined corporation would create a large platform of products that work together and help the companies cut costs.
Reaction to the plan has been strongly negative, with stock-market analysts expressing doubts about the combination and investors sending both companies' shares sliding. The terrorist attacks, and fears about the economy, have only deepened the misgivings.
Railroads May Get Help From U.S.
Senate Democrats are considering a multibillion-dollar investment in passenger rail service as part of the package to revive the battered economy. The proposed infusion—as much as $37 billion—would be a boon for struggling Amtrak. Meanwhile, a Republican lawmaker planned to introduce legislation to provide $71 billion in funds, loans and other assistance for a nationwide high-speedrail network.
By Robert J. Toth
- Wall Street Firms Trim Campus Recruiting
WSJ.com College Journal
uate of New York University.
* Telling Tales Can Bolster Your Next Job Interview
THIS WEEK AT:
COLLEGEJOURNAL.COM
from THE WALL STREET JOURNAL
Bears prevail: Second-year M.B.A. students are used to receiving sign on bonuses from big brokerage firms during the fall semester. These days, just landing an interview slot is a coup.
A true original: To win a job offer, you must stand out from the pack when meeting with employers. Here's advice on how to use anecdotes about your experience to impress a prospective boss.
Advertisers Shift Focus In Wake of Attacks; Hard Sell Is on Hold
- Job-Search Secrets From a Recent Grad
Words of wisdom: What's the most helpful thing you can do to find a job after graduation? Stop procrastinating and start looking now, says Nancy Fann, a May 2011 grad.
The neon of Times Square has taken on a red, white and blue cast. In the wake of the terrorist attacks, advertisers are stripping commercial messages from the iconic displays and replacing them with images of American flags, charitable messages and patriotic phrases.
Across the country, advertisers and outdoor-advertising companies have been switching promotional displays to reflect a newly somber, patriotic mood. Commercial messages are being toned down or replaced, as companies rush to associate themselves with the community spirit unleashed by the attacks.
Patriotism Edges Out Promotion
Tempered Mood
"Everyone is seeing what everyone is doing and joining in," says Mike McGraw, an executive at Clear Channel Spectacol, a unit of Clear Channel Communications, that focuses on Times Square displays.
BY ANNA WILDE MATHEWS
Times Square advertisers are among the companies that are changing their outdoor displays to show patriotic and public-service messages
The shift is an early example of the tone emerging in advertising generally after the attacks: scaled-back, sober and emphasizing public service rather than a hard sell. "We wanted to do something to reflect that it is not business as usual," says Steve Sturm, vice president for marketing at Toyota Motor Sales, a unit of Japan's Toyota Motor. The company's Times Square video display shows an American flag.
Toyota is reassessing all its advertising. Promotional messages "have to be tempered...to reflect the mood of the American public and the somberness of the times," Mr. Sturm says.
overnight. FleetBoston Financial's Times Square video display had featured a list of New York automated-teller machine locations, including the World Trade Center. After the attack it started telling viewers they can donate to the Red Cross at Fleet branches. "The idea was to put the sign to public use right away," says Rena DeSisto, Fleet's senior vice president for corporate communications in New York. "It's not a time to be promotional."
Some advertisers saw aspects of their messages become irrelevant
take longer to return to something resembling "normalcy" simply because their messages are so much more public. Messages are going up across the country, many as part of a campaign organized by the Outdoor Advertising Association of America that uses the simple statement: "In God We Trust. United We Stand." At the end of the same day of the attacks, executives at JVC, a subsidiary of Japan's Matsushita Electric Industrial, decided to redo the company's big display in Times Square. It had read, "Excite Your Senses...World Leader in Audio and Video." The day after the attacks, the display switched to the Outdoor Advertising Association's message.
Such shifts are occurring throughout the advertising industry, from billboards all the way down to e-mail marketing campaigns. Some Internet retailers say they've delayed mass mailings out of concern that hard sells or boasts of rock-bottom prices may be seen as inappropriate in the attacks' aftermath. Some also say that Internet retailers have to be more careful than, say, outdoor advertisers, to avoid appearing exploitative by sending out a barrage of patriotic images and sympathy messages. E-mails strike many customers as a more personal form of communication than traditional advertising.
For billboard advertisers, it may
Bluefly Inc., a New York-based Internet retailer of discount designer goods, was scheduled to send out a "hot deals" e-mail promotion Sept. 12, the day after the attacks. The e-mail would have touted designer dresses at 70% off, a selection of "hot items" for $19.99, designer ties and merchandise for children. The retailer instead delayed its e-mails until last Thursday. Bluefly added a preamble that touched on the delicate balance between returning to normal activity and reflecting on the tragedy: "While we fully recognize that shopping may not be a priority of yours at this time, we are resuming our regular weekly e-mail schedule in an effort to try to return to normalcy."
Lamar Advertising is putting up about 150 giant billboards and at least 1,500 smaller ones around the country, as well as giving discounts to customers who want to mount public-service messages. Clear Channel is donating space from 50 huge, 14-by-48-foot billboards, as well as hundreds of slightly smaller displays. The campaign will link the company's name with charitable associations, by featuring the address clearchannel.com, where people can
'Return to Normalcy'
"We want to do anything we can for support," says Rob Richards, Clear Channel Outdoor senior vice president.
It can be an expensive decision for advertisers. HomeBanc Mortgage pays more than $10,000 a month to advertise on a 28-by-84-foot billboard in downtown Atlanta. It had featured the company's Internet service, but now will show a Red Cross phone number, along with the message "God Bless America." The bank's logo won't completely vanish: It is in the lower right-hand corner.
donate to a relief fund.
Companies that want to make a statement don't want to appear to be exploiting the message for commercial gain. In Dallas, radio station KBFB-FM, owned by Radio One, is covering its logo and name on some billboards with an American flag and the message, "God Bless America." Photos of some of the station's on-air personalities still will be on display.
"I wanted to make sure it wasn't self-serving," says George Laughlin, general manager of the station.
Wall Street Journal staff reporter Erin Whit contributed to this article.
Survival Gear Gets Big Boost In U.S. Sales
Before the terrorist attacks of Sept. 11, her Utah Shelter Systems sold about one shelter a month, mostly to people worried about tornadoes or earthquakes. This past Thursday alone, she took six orders, all from people seeking protection against chemical or biological attack. "When I went to bed I still had 93 e-mails to answer," Ms. Packer says.
business is picking up for Sharon Packer, who runs a small Salt Lake City firm that sells Swiss-made bomb shelters starting at $16,000. Before the terrorist attacks
Phones are ringing off the hook at Neuterk health Technologies Inc. in Woodsboro, Md., where anxious customers are paying $259.99 each for Survivor-brand gas masks and $495 for enclosed-bubble protectors for babies and pets.
By Wall Street Journal staff reporters Joseph Pereira, Barbara Carton and Kelly K. Spors.
Fears of more terrorist assaults are providing a huge boost to the survivalist industry and other purveyors of emergency supplies and advice. In part, this is because the U.S. has no mass civil-defense shelter system. The Federal Emergency Management Agency doesn't offer recommendations on what to do in the event of a chemical or biological bombing, calling such events unlikely. "We don't view it as a significant threat and it's really not part of our policy," says spokesman Marc Wolfson.
So survivalist merchants work to fill this void. Utah Shelters, for instance, sells refuges designed to be dug into the ground, which range in price from $16,000 for a 32-foot-long steel silo to $33,000 for a 10-by-50-feet chamber that Ms. Packer, the firm's co-owner, calls "a virtual second home...complete with air conditioning, chemical toilet, light fixtures and vented air."
At the American School of Defense, a distributor of nuclear, biological and chemical protection gear in Kansas City, Kan., owner Jade Edwards says he typically sells about 100 M-95 brand gas masks a month; he sold 1,000 last week. Kurt Wilson, owner of Survival Enterprises, which sells survivalist products over the Internet and at a store in Coeur d'Alene, Idaho, says sales of ready-to-eat food and kerosene lamps have doubled in the past two weeks." "Business was slow for a long time," he says, "Now they call me up and say 'I've got $2,000 to spend.'"
A successful future starts with The Wall Street Journal.
You won't find a better resource than The Journal for news and industry trends that can help you prepare for everything from life after college to your next spring break.
A student subscription to The Wall Street Journal includes both the print and online (WSJ.com) editions. So, you can be sure that you'll receive the most up-to-date news as well as special tools to help you plan your career.
With The Journal you'll get:
Knowledge and insight on how textbook theories work in the real world Customizable news when and how you want it Briefing Books and 30-day archives great for company research and interview preparation Summaries of the day's top news stories Small Business Suite tips and tools for starting your own business
For more information about special subscription rates for students, call 1-800-975-8602 or visit info.wsj.com/students
THE WALL STREET JOURNAL
©2001 Dow Jones & Company, Inc. All Rights Reserved.
Don't forget the
when placing a classified. With proof of KUID