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News
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Top 10 business stories
graphic December 17, 2001: 2:17 p.m. ET

It was a challenging year for corporate America, investors and consumers.
by Shelly K. Schwartz
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  • HP to take merger to shareholders - Dec. 11, 2001
  • Fed makes 11th rate cut of 2001 - Dec. 11, 2001
  • No decision on AT&T broadband bids - Dec. 9, 2001
  • Japan slips into recession - Dec. 6, 2001
  • Enron in Ch. 11 filing - Dec. 2, 2001
  • Economists say recession began in March - Nov. 26, 2001
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    NEW YORK (CNN/Money) - It was a year marked by recession, the California energy crisis and steep declines on Wall Street. But most of all...it was a year marked by tragedy.

    Few among us will ever forget that bright morning in September when four commercial jetliners, hijacked by terrorists, brought America to its knees. New York's World Trade Center was lost, the Pentagon wounded and an empty field in Pennsylvania became the final resting place of 45 passengers and crew who dared to fight back. Thousands died and millions mourned.

    They mourn still.

    As the nation recovers and a new year dawns, the editors of CNN/Money pause to reflect on the top 10 business stories of 2001. Check out our year-end special report during the week of Dec. 17 for an in-depth analysis on each. These are our picks:

    9/11 - Ripple effects

    1.) Without question, the attacks of Sept. 11 had the most far-reaching implications on corporate America, investors and the nation's peace of mind. It dealt a devastating blow to an already faltering U.S. economy. The loss of real estate, jobs and income that month alone totaled $60 billion. Airlines required $5 billion in federal aid to stay afloat.  (For more, see (Sept. 11: The only story.")

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    The New York Stock Exchange reopened Sept. 17, ending the week with the Dow Jones industrial average off nearly 1,370 points at 8,235 - the worst five-day performance for the blue chip index since the Great Depression. And the tech-heavy Nasdaq fell 220 points to 1,423. Both indexes have since recovered to pre-attack levels, but remain well below their highs of early 2000.

    A thwarted recovery

    2.) Those who read the economic tea leaves predicted a sharp recovery for the second half of the year. That never materialized.

    In response, the central bank slashed short-term interest rates 11 times in 2001 - a record for the most cuts in a year. The Republican-led White House also stepped in, approving an economic stimulus package that included a $1.35 trillion tax cut for all Americans.

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    So far, neither have had the desired effect. Layoffs reached 1.8 million through November and the National Bureau of Economic Research said it now believes the economy officially slipped into recession in March. (See "The recession: Good riddance, 2001.")

    Dancing with bears

    3.) Wall Street was a disappointment all its own. Few investors fared well this year, save for the short-sellers who bet on market losses.

    Energy stocks, information technology firms and utilities fell the hardest, stemming from sky-high oil prices and cuts in corporate spending.

    Since Jan. 1, the Dow Jones industrial average has fallen to about 9,850 from 10,787, the Nasdaq has dropped to 1,990 from 2,470 and the broader S&P 500 index is hovering at around 1,158, down from 1,320.

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    According to fund-tracker Morningstar, mutual funds have shed 7.92 percent of their value year-to-date through Dec. 11. (See, "The Bear Market: From bad to worse.")

    The Energy Crisis

    4.) It was a long hot summer for many of the nation's utilities. The energy crisis, which put Pacific Gas & Electric into bankruptcy and resulted in rolling blackouts in California, stemmed from deregulation and consumer price caps.  Utilities reported billions in losses. 

    Enron (ENE: unchanged at $0.63, Research, Estimates) was the other energy sector casualty this year. The energy trader, once a take-no-prisoners powerhouse, collapsed under accounting irregularities, a botched buyout offer from Dynegy Inc. and the weight of its own debt. It filed the largest corporate bankruptcy in U.S. history. (See "The energy crisis.")

    M&A's MIA

    5.) It was much ado over nothing on the merger front this year, thanks to some high-profile partnerships that weren't to be. European antitrust regulators shot down General Electric's planned merger with Honeywell, while the Justice Department blocked the proposed $4.3 billion purchase of US Airways by UAL Corp. (UAL: up $0.74 to $14.44, Research, Estimates). Hewlett Packard's controversial play for rival Compaq Computer is still underway.

    One of the few to reach fruition was insurance leader AIG, which won a $23 billion takeover bid of American General Corp.(See "The busted deals.")

    Getting the dial tone

    6.) If last year it was the tech sector that led the losing streak on Wall Street, this year it was telecom. The networking segment hit the skids as corporate customers slashed new equipment orders. Shares of Cisco Systems (CSCO: up $1.21 to $20.44, Research, Estimates), Nortel Networks (NT: up $0.47 to $8.22, Research, Estimates) and JDS Uniphase (JDSU: up $0.35 to $9.48, Research, Estimates) lost 50 percent or more of their share value.

    And Internet Service Providers PSINet, Covad Communications Group and NorthPoint Communications went belly up. (See "Telecom turmoil.")

    A global recession



    7.) The problems facing Wall Street, however, didn't just wash up on U.S. shores.

    Japan, the world's second largest economy, slipped into recession last month, plagued by waning consumer demand, a troubled banking system and the added challenge of monetary deflation. And experts say the 12-nation euro zone could follow suit shortly. ("See "The global meltdown.")

    The MSFT saga continues

    8.) Microsoft's landmark antitrust case took some important turns in 2001. An appeals court last summer upheld an earlier ruling that the software company's conduct violated antitrust laws, but overturned a breakup order.

    The Justice Department and Microsoft (MSFT: up $1.64 to $68.68, Research, Estimates) worked out a settlement last month, but some of the states that filed the original suit have refused to go along, saying it does not go far enough. (See "Microsoft: It ain't over.")

    Grounded

    9.) Following Sept. 11, the White House approved $5 billion in federal aid for the major airline carriers. The industry is estimated to have lost $10 billion.

    But airlines were already in trouble. Every major carrier other than Continental (CAL: up $1.50 to $29.10, Research, Estimates)  and Southwest (LUV: up $0.66 to $18.91, Research, Estimates)  lost money in the first and second quarters, prompting Goldman Sachs airline analyst Glen Engel to project full-year industry-wide losses of $3.4 billion - even before the attacks. (See "Turbulence in the air.")

    The silver lining

    10.) It wasn't all bad news in 2001, however. The sale of existing homes this year is projected to reach an annual rate of  5.2 million, just shy of last year's all-time record of 5.21 million units. And personal spending levels grew by about 5 percent on a year-over-year comparison.

    Economists largely credit consumers with keeping the economy from falling deeper into recession. And they expect the purchase of big ticket items, including cars and household appliances, will help drive us out again next year. (See "Consumer is king.")  graphic

      RELATED STORIES

    HP to take merger to shareholders - Dec. 11, 2001

    Fed makes 11th rate cut of 2001 - Dec. 11, 2001

    No decision on AT&T broadband bids - Dec. 9, 2001

    Japan slips into recession - Dec. 6, 2001

    Enron in Ch. 11 filing - Dec. 2, 2001

    Economists say recession began in March - Nov. 26, 2001

    GE/Honeywell declared dead - Oct. 2, 2001

    UAL, US Air nix deal - July 27, 2001





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    Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
    Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
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