Marketplace: News Archives

Friday, October 13, 2000
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It's Friday, October 13th. I'm David Brancaccio.

Sometimes the mood of investors fits the general mood of world affairs. Sometimes it seems not fit at all. Today, as the investigation continues into the apparent bombing of a U.S. Navy ship and the U.N. Secretary General scrambles to set up an Israeli-Palestinian peace summit, stock prices went up dramatically. This was particularly apparent on the Nasdaq market, where the composite index rose 7.9 percent, 242 points to close at 3316 today. The purists like to compare percentage gains, but it must be pointed out that in terms of raw points, that's the third biggest jump for the Nasdaq ever on a single day. Yesterday the Nasdaq posted its fifth worst point loss. The Dow today gained 157 points or 1.6 percent. Marketplace's New York editor Michelle Brier begins our coverage.

Brier: "Lunchtime at a bar just off Wall Street. The crowd seems more interested in the latest news from the Middle East than the daily specials. Many in the mostly professional crowd voice concerns about the crisis overseas, worried about a possible impact on the economy here at home."

Wyss: "Well, let's face it, the last three recessions have all been brought about by recessions in the Middle East."

Brier: "David Wyss is chief economist at Standard and Poors."

Wyss: "Obviously they don't want the US dragged in but even more, is there any threat to having oil cut off? The '74 recession, the '80 recession, the '90-91 recession all caused by oil spiking very high and they are worried it could happen again."

Brier: "Unrest abroad often draws foreign investment dollars to the US. But our stock markets have been struggling with problems of their own and that could temper the flow of money says Stan Shipley, senior economist at Merrill Lynch."

Shipley: "While the us market remain the safe haven of choice and investors tend to migrate here, volatility in our markets is bad news for foreign investors. They are likely to stay with their home market then get into something they don't understand."

Brier: "Analysts say the greatest concern for US markets is the security of oil and so far there's no indication the fighting in Israel nor the bombings in Yemen will have any impact on oil supplies. In New York, I'm Michelle Brier for Marketplace."

Crude oil was down more than a dollar today. The benchmark ten-year treasury note down with the yield up to 5.73 percent. And you can be sure that we have more on the 7.9 percent rise for the Nasdaq, when we do the numbers.

In Britain, a special government panel has ruled that genetic tests for Huntington's disease are reliable enough for life insurers to use the test results when assessing insurance applications. As Marketplace's Helen Palmer report from the Health Desk, this decision has stirred controversy in Britain with implications to U.S. insurance practice in the U.S.

Palmer: "Huntington's Disease is a fatal inherited brain disease that typically strikes between age 30 and 50. Alison Holmes's grandmother and aunt both died of it and she's mad that insurance companies can now use the test."

Holmes: "It makes me very angry - there'll be a whole class of people who are uninsurable."

Palmer: "Accurate genetic tests like this one make that scenario perfectly possible, says Bob Wilcox, of the American Academy of Actuaries Life Practice Council."

Wilcox: "The fact that they're unable to purchase insurance is unfortunate."

Palmer: "But he argues that all that's new here is the method - you have to have a physical exam now if you want to buy life insurance and allow the insurance company access to your medical records. It's a matter of correct risk assessment, he says, after all, you don't find it unfair that you have to pay high insurance rates if you choose to go sky-diving."

Palmer: "But of course, when it comes to sky-diving you have the choice. With genes you don't and that's why Professor Ruth Hubbard, of the Society for Responsible Genetics, says the real issue isn't testing but discrimination."

Hubbard: "Life insurance, like health insurance, are pretty essential. We need life insurance to get a mortgage, to get a loan of any sort and for all kinds of reasons."

Palmer: "She say what's need are laws, to protect individuals from genetic discrimination. From the health desk at WGBH Boston, I'm Helen Palmer for Marketplace."

As Congress tries to finish work by next week, the Senate today debated the 78 billion-dollar spending bill for the Department of Agriculture. Marketplace's John Dimsdale reports the bill contains plenty of subsidies for farmers despite the promises of reforms four years ago designed to wean farmers from government support.

Dimsdale: "Last year, half of the nation's farm income came from the government a - shock even for the chief economist at the Department of Agriculture, Keith Collins."

Collins: "It's even more startling to know that only about forty percent of all farms even receive those payments. So for those farms receiving the payments, their share of farm income from the government is even much higher than fifty percent. I don't think, in the long term, this is sustainable. It's not what we have in most industries of our economy."

Dimsdale: "The prices farmers get for their products have been especially weak for the last several years and are at the low point in the cycle right now according to Collins. But he says the export subsidies, crop insurance and emergency help to recover from natural disasters foster a dangerous dependence on government largesse."

Collins: "And we also have a commitment through the WTO to try and move toward more open freely traded markets and we have to be very careful how we implement our agriculture subsidies so they are consistent with that."

Dimsdale: "The ballooning farm support undermines U.S. leverage to push for international reductions in subsidies for farmers, especially in Europe where the U.S. has long complained that government payments make it tough for U.S. farmers to compete. The European Union's agriculture counselor in Washington, Jerry Kiely, gets to do a bit of gloating."

Kiely: "In fact, if you compare what the U.S. has given this year compared to what we give our farmers in direct payments, the average U.S. farmer will receive three to four times what the average E.U. farmer will receive."

Dimsdale: "The farm spending bill for next year has other controversial provisions including lifting some sanctions against Cuba and allowing U.S. pharmacists to import cheap drugs from overseas. So far the White House is planning to sign it. In Washington, I'm John Dimsdale for Marketplace."