Monday, December 31, 2001
Top 10 national business stories
By Adam Geller
The Associated Press
NEW YORK Bad news often shapes the headlines, but many of the top business stories of 2001 were dictated by a more urgent force crisis.
After a decade of expansion, many businesses and investors prepared for an economic slowdown as the year began. That promised bad news, certainly, but only of the conventional variety, the kind usually chalked up to the cyclical nature of the economy and the natural course of markets.
But the Sept. 11 terrorist attacks and the repercussions shoved an economy teetering on recession to the brink of free fall, a crisis that was key to many of the top business stories of 2001 as chosen by U.S. newspaper and broadcast editors in a survey by the Associated Press.
Their overwhelming choice for the biggest business story of the year was the devastation to the nation's financial center in lower Manhattan in the attacks, including a nearly weeklong shutdown of the stock markets.
Ranking second was the injured economy's stumble into recession, a change that technically dates to the early part of the year, but was assured by the massive job cuts and reductions in spending that followed the terrorist attacks.
This is the second year that editors selected decidedly negative stories as the year's top business headlines. But the contrast between then and now is striking.
Last year's list of top stories included soaring energy prices that generated staggering profits for many companies. This year's list includes the stunning collapse of Enron, the energy giant that was one of the price spiral's biggest beneficiaries.
Last year's list also included what seemed at the time a big problem for the airline industry: airports so overtaxed that flight delays were out of control. In an industry that is back on the list this year for its 200,000 job cuts and massive service reductions, the bad news of the past seems merely ordinary.
Here, according to the AP survey of editors, are the top 10 business stories of 2001:
1. Financial capital attacked: The destruction of the World Trade Center sent legions of financial services workers fleeing Manhattan, paralyzing the nerve center of the business world. The New York Stock Exchange and other markets remained closed for nearly a week. When they did reopen, the Dow Jones industrial average plummeted, falling below 9,000 for the first time in 2 1/2 years.
2. Recession's grip: After a record decade-long expansion, the U.S. economy slipped into recession in March. The pronouncement was made in November by a committee of economists, who noted that a full-blown downturn might have been avoided if not for the terrorist attacks. The group made its announcement as businesses, trying to boost sagging earnings, stepped up job cuts.
3. Fed cuts: The Federal Reserve slashed interest rates 11 times in 12 months, the last four in a determined bid to prop up the economy after the terrorist attacks. The cuts brought the cost of borrowing money to its lowest level in 40 years. But while the rate reductions were designed to restart the economy, there was little evidence the campaign was working.
4. Enron collapse: Enron's stock, which traded at more than $90 a share late last year, plummeted to less than 50 cents after it disclosed questionable business and accounting practices, and rival Dynegy abandoned plans to buy the firm. Enron sought bankruptcy protection in early December in one of the largest filings ever.
5. Embattled airlines: Air carriers shed more than 200,000 jobs, slashed their schedules and announced billions of dollars in losses after the Sept. 11 attacks, as fearful travelers determined to stay on the ground. The crisis magnified problems brought on by the economic slowdown, which already had led many companies to cut back on business travel. In a bid to rescue the industry, Congress agreed to provide more than $2 billion in subsidies.
6. Microsoft case: An appeals court partially affirmed the antitrust verdict against Microsoft, but the Department of Justice subsequently offered to reach a friendly settlement with the software giant.
7. Bankruptcies surge: Bankruptcy filings by publicly held companies reached record levels, as some of the nation's most prominent corporations sought refuge from creditors. The casualties included steelmakers LTV and Bethlehem, instant film maker Polaroid, retailer Lechter's and airlines Midway and Sabena.
8. California power: Californians suffered through soaring energy prices and brownouts as the state's deregulation of the power industry failed. Pacific Gas & Electric, the biggest utility in the state, filed for bankruptcy protection.
9. Tire fallout: Ford and Firestone broke off a 95-year relationship as they battled over who was to blame for accidents involving Ford Explorers equipped with Firestone tires.
10. China welcomed: The world's most populous nation is at long lasted admitted to the World Trade Organization, which launches a new round of trade talks.
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