By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It's Friday so "It's Only Money," a review of the big and not-so-big-stories of the week. I'm Maxine Shapiro with KERA Marketplace Midday.
It was a week when the airline industry almost took center stage from Iraq. A report released on Tuesday by the Air Transport Association put the public on notice - a war with Iraq could add an additional $13 billion loss for the largest U.S. airlines. It would mean 3,800 daily flights could be cut, and 100,000 more jobs could be lost. The ATA report can't even draw a positive correlation with the 1991 Gulf War. The industry went into that war with profits of almost $4 billion. The report was quick to point out that after the war, sales plummeted. For a war that lasted less than 50 days, it took the airlines four years to recover.
On Wednesday, AMR - parent company to American Airlines - was cut from the S&P 500. Besides not meeting the minimum standards, a possible Chapter 11 bankruptcy for the company weighed heavily on the decision. The stock hit an all time low of $1.25. So can American get the concessions it needs from its unions to avoid bankruptcy protection?
But by the end of Wednesday's trading session, there was a little rally in the major indices. Europe took that as a sign to rally overnight and yesterday saw the best day in the market since October. When President Bush announced he's going to hold off on pushing for a vote from the U.N. Security Council, well - let's just say investors were relieved no bombs would be dropped on Monday. This was no "war rally." Though I'm sure some people feel going it alone without U.N. support is just what the market needs, for the majority any delay is a positive sign for diplomacy.
And in the who-thought-this-would-ever-come-out-of-their-mouths category, Texas Tech coach Bob Knight, humbly announced he would not accept his salary because, his team did not meet expectations. And stock market investor Warren Buffet - worth a mere $36 billion - said President Bush's proposal to eliminate taxes on dividends would unfairly benefit the wealthy. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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