>> susie: 9/11-- the day that changed america and its impact is still felt. >> it's very emotional being here today. you know, the stock exchange coming back was an enormously important part of the revival of this city and the revival of the country. >> tom: how business and many aspects of our lives have

evolved in the last ten years. this is a special edition of "nightly business report" for friday, september 9. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: one wall street firm >> i'm susie gharib. we come to you from the site where the twin towers stood

a decade ago. i'm on the 20th floor of the new one world trade center. the building is still under construction. when it's completed it will be 104 stories and one of the tallest in the world. what was once called ground zero now contains a memorial showcasing waterfalls on the footprints of the destroyed towers. it will open to the public on monday. but today was all about remembering and honoring the people lost on that tragic day ten years ago. tom hudson will be along a little later in the program with the day's news and market action. but first we go to the new york stock exchange where traders took time to reflect. erica miller reports. >> this morning there was silence on what would normally be a noisy trading floor. just before the opening bell, singing from those gathered. at today's commemoration

with the former head of the nyse. chuck schumer and hillary clinton, new york senators at the time, the former governor and former mayor rudy giuliani all rang the bell on september 17th, 2001, the day the exchange reopened. many felt a mix of emotions. >> the worst memory-- memory i have of that day is watch a man throw himself out 16901s, 102nd floor, it stays with me always. i will never get over it. >> you have that horrible memory, and the horrible memory of the loss. but then you also have the inspiring memory of the thousands and thousands of new yorkers who rushed to the site. >> reporter: in the financial world much has changed since 9/11. america's unemployment rate now is double what it was back then. and the nation has endured two recessions. but one thing hasn't changed much at all, stock prices. since september 10th, 2001, the dow has risen just 14%.

that means an average gain of less than 2% a year. but today many weren't thinking about profits. they were thinking about losses. on 9/11 floor broker kenney pulcaryi decide on a lark to leave his world trade center office and join colleagues. >> only by the grace of god did my coworkers come back to get me, i don't know if you and i would be sitting here having a conversation today. >> as a fitting end to a somber day, the closing bell was rung by families of 9/11 victims. one wall street firm nearly wiped out on 9/11 was keefe bruyette and woods. the boutique investment firm was headquartered on the 88th and 89th floors in tower two of the world trade center. a third of k.b.w.'s workforce died that day, including co- c.e.o. joseph berry and chris duffy, the 23-year-old son of k.b.w.'s surviving co-c.e.o. john duffy. many people doubted the firm

could stay in business, but now ten years later k.b.w. is much bigger and is one of the leading investment banks in the country. it still specializes in the financial sector, but it's expanded internationally and it went public in 2006. its shares trade on the new york stock exchange. when i met with john duffy i asked him how he feels about the way things turned out. >> we're more than satisfied with what we've accomplished. and i don't think any of us would have been so bold back then predict that we would be of this size. but the people that work here are pretty passionate about the firm and take pride in working here. and where we have been presented those opportunities to grow in the last ten years, everybody was all in. so i take an enormous amount of pride in being part of that.

and and i know a lot of other people here do too. it's nice to be part of a winning team. >> susie: you know, john, the kbw story is so amazing. and how did you rebuild this firm, you and your coworkers were grieving. when you looked back, how did you pull this off? >> there was certainly no play book in terms of kind of how to rebuild the place when you had lost, you know, more than a third of your employees, about a quarter of your capital, all your financial records, you know, many, many key senior employees. we lost five of our nine directors. and the way we did it was we banded together and most of us got out of bed every morning and said well, i'm going to do kind of the best i can do. and we took it, you know, sounds trite but we took it kind of one day at a time. we all felt certainly in those early months that, you know, we didn't want to see the firm fail as a result of

the events of 9/11. as i said, that would have meant the bad guys won. >> susie: 9/11 also changed wall street, what would you say is the key difference between then and now? >> it's fill a very competitive world even though some of the names that we were competing against five or ten years ago aren't around. but you know, those people are in other firms. and there are new players on the landscape is so from a day-to-day business perspective, it's not a whole lot different. and we really haven't changed the focus of the firm at all during that period of time in terms of just following, you know, one industry. >> susie: well, kbw is still so specialized in banking and financial services and it's certainly been a tough time for that sector. do you ever think of expanding beyond that? >> we frequently ask ourselves should we go into energy or high-tech or, you know, some other sector. nobody around here knows

those sectors. so we don't-- we don't give it a lot of thought in terms of an organic expansion. i think if an opportunity ever presented itself to acquire a firm, you know, that kind of had the same kind of brand in a different space, you know, and on the right terms we would consider that. >> susie: how is your business doing given this new phase of the financial crisis? >> i think there are challenges out there. economic environment, stock market, our revenues aren't as robust as they have been, as we would like them. there's more regulation. both the mna part of our business has been slow. and the capital markets activity has certainly slowed down since the first couple of months of the year. so it's a challenging market. but you know, we've been through challenges before. >> so this is a special anniversary of 9/11.

what is it like to face that memory again. how are you feeling? >> it's always a very emotional day. you wind up crying a lot and you wind up reminiscing and hopefully laughing about some of the good stories, you know, either about my son, some of his antics or you know, sweet memories of some of the other people that we lost. so it's good to get your emotions going every once in a while. so while it can be a very difficult day and you feel drained when it's all over with, as i said, you know, it's, we don't want people to forget and i'm certainly to the going to forget. so it's part of life. you know what are you going to be doing on 9/11. >> a-- the death and loss of friends i'm angry because of the destruction, but i am-- i am angry because these people changed all of

our lives, rever. >> tom: our 9-11 coverage continues in a moment. stocks staged a stiff sell-off, ending this holiday shortened week. the dow dropped 2.2% this week. the nasdaq fared better losing a half percent. the s&p 500 is down 1.7% from a week ago. investors were spooked by rumor greece may defau on its loans, mething greece was quick to deny. also germany's top member of the european central bank quit, highlighting the division among european regulators over how to respond to the debt troubles. and the selling follows the release of president obama's $447 billion jobs plan package. all the major stock sectors were lower. energy, materials and financial sectors fell by more than 3% each.

anand chokkavelu, banking analyst at motley fool, believes u.s. banks can handle a banking emergency in europe. >> versus a couple of years ago the american banking system can definitely weather a european banking crisis. much better than in say 2007, 2008 even 2009. >> tom: the biggest bank in the u.s.-- bank of america reportedly is considering cutting 40,000 jobs. an announcement may come monday. but bank of america did not confirm the action. its stock fell back below seven dollars per share falling 3%. it was the volume leader on the new york stock exchange. while investors sold stocks, they were buying u.s. government i.o.u.'s. the yield on the ten-year note fell to a new 40 year low sitting just above 1.9%. gold saw more muted buying. during the session it came within $11 of $1,900. it ended the day up $2 at $1,859.

>> very painful to watch, everybody was crying and moaning and, you know, just very depressed. >> susie: in the past decade, the nation has spent billions of dollars on preventing another attack on american soil. 9/11 led to the creation of the department of homeland security- - a powerful new cabinet post in the government. it oversees everything from transportation security to the secret service. but as darren gersh reports, experts think much of the spending on homeland security has been inefficient and there are better ways to protect the country. >> reporter: all the hardware, all the screeners, all the bomb- sniffing dogs that make up the homeland security front line are aimed at stopping what is a one in a million event. in fact, it is a one in 3.5 million event.

those are the odds of an american dying in a terrorist attack on u.s. soil. more and more security analysts are asking whether there is a better way to spend money to reduce those odds. >> we've spent a lot on shiny toys and we've pushed a lot of technology out. >> reporter: frank cilluffo was a key homeland security adviser to president bush following the 9/11 attacks. he says the era of the blank check is over. >> i would argue this is the time to start investing in people and investing in analytical capacities and start investing in ways to maximize those resources. >> reporter: now that budget cutting is the order of the day in washington, there is a growing willingness to take a clear-eyed look at homeland security spending-- its costs and it's benefits. >> what has happened systematically since 9/11 is that problems have percolated up into the in-box and then a lot of money has been thrown at them without any kind of real

analysis to see whether they reduce risks enough to be worth their costs. >> reporter: in a new book, ohio state professor john mueller argues the right question to ask is whether the gains we've made in homeland security are worth the cost. a good example is the air marshal program, which costs $1 billion, but mueller says it has little chance of preventing another 9/11 style attack. beefed up building security is another example. >> it turns out the probability of a terrorist attack would have to be a thousand times higher than it is at present to justify those expenditures. >> reporter: congress is beginning to ask those hard question. house lawmakers overseeing homeland security spending voted to slash more than $600 million from the d.h.s. science and technology acquisition budget arguing the department hasn't shown a clear link between more spending and better security. >> in a capitalist society it is not unusual for people to hype their products and the buyer is the one that has to make the

final decision. and in many cases over and over again it seems the buyers have not been doing it in a responsible manner. >> reporter: but budget cuts alone aren't the answer. how and where those cuts come is important too. >> we need to be very aggressive in determining are we getting our money's worth? the money is definitely going down, the question is can we use a scalpel and remove the stuff that we should remove and devote the resources we do have where we need them most. >> reporter: darren gersh, "nightly business report," washington. >> tom: the one industry that felt the impact of 9-11 the most: the airlines. the planes of united and american airlines were used as weapons in the terrorist attacks. the years that followed brought heightened security, increased costs and bankruptcy. as diane eastabrook reports the attacks not only transformed the airline industry, but the way americans feel about flying. >> reporter: lauren freedman calls herself a road warrior often flying several times a month for business.

since 911, the internet retailing consultant says flying has been anything but fun. >> i can't just leave for the airport like 20 minutes before i have to get there. there's always going to be a line. and also what you have to do in the line like which boots do i wear which shoes do i wear. can i slide the toiletries in the bag or do i stick them in there. >> reporter: the september 11th terrorist attacks immediately transformed the airline industry, starting with a two- day halt of all air travel to and from the u.s. and ending with beefed up security measures at airports nationwide. today passengers must navigate concrete barriers on their way to terminals. once there they stand in long lines so carry-on items and sometimes their own bodies are scanned for weapons. and everywhere there are signs with rules and warnings. >> some of the hassles of flying aren't a direct result of 911. the industry was struggling in the months before the attack and experts say the events of 911 really served as a catalyst for change.

>> reporter: analysts say before 911 too many carriers were courting customers at a time when airline costs were soaring. in the months following the attacks, traffic plunged roughly 30%, sending the industry into a tailspin. the air transport association says in the decade after the attacks, u.s. airlines lost a combined $63 billion that resulted in 39 bankruptcies, eleven mergers and 165,000 lost airline jobs. today, the remaining carriers have improved their financial fitness, but airline analyst william warlick says problems remain. >> obviously all carriers are still struggling with low margins, low returns on investment capital relative to their capital costs. and so the industry is still in a position where additional restructuring has to occur for the industry to remain profitable over time. >> reporter: carriers have increased revenues with additional charges for bags and meals. still the specter of 911 continues to be a drag.

last year homeland security taxes increased three fold. and northwestern university transportation expert ian savage thinks there have been other costs. >> we then have the issue with the oil prices and to what extent that was associated with the disruption in the oil supply from iraq versus general demand from china and elsewhere which is relates to oil price increases. so, i think it's kind of difficult to disentangle this from what happened in oil prices. >> reporter: while frequent flyer freedman admits air travel isn't what it used to be. she's getting used to the new reality. >> it's not a problem when everything goes smoothly. it's when it doesn't go smoothly that it's an issue. >> reporter: diane eastabrook "nightly business report," chicago. your whole worldview kind of got shifted in that instant it was just unbelievable. there are really no words to

describe what happened that day. >> susie: the rebuilding and redevelopment of the world trade center site will continue well beyond this ten-year anniversary. one world trade is scheduled to open in 2014. a new transit center and second office tower are also taking shape. those construction areas are the most noticeable changes to the lower manhattan landscape. but, as suzanne pratt reports the surrounding neighborhood is also evolving in some surprising ways. >> reporter: on september 11 2001, lucy preston was living on a different continent. today, she resides just a few blocks from the former world trade center having bought an apartment in lower manhattan in 2008. not only does it come with a stunning rooftop deck, but it's in what she calls an ideal community. >> we've been living here for last six years and there's a real feel of neighborhood redeveloping. there's a lot more shops and bar

and restaurants opening here. we've got a whole foods in tribeca, which is fantastic. >> reporter: preston is one of thousands of people who moved to lower manhattan post 9-11. in fact the residential population of the area, also known as the financial district, has more than doubled in the last ten years. in the weeks and months following that tragic day, few might have predicted the neighborhood would come back so strongly, so quickly and be so transformed. sure new buildings are still under construction at what still sometimes called ground zero, but lower manhattan has become hot if not even hip. longtime resident and downtown alliance president liz berger says affordable rents initially attracted intrepid newcomers. but, many people have remained for other reasons. >> the majority of people who live in lower manhattan are in families, a quarter have children. a significant portion have been

here for five years now and say they are staying for another three, and more than 80% say the reason they're here in the quality of life. >> reporter: and what a life it's becoming. there's close proximity to waterfront, easy access by public transportation to throughout the city. there's also lots of history, attractive green spaces and now there's even a shake shack. restaurateur danny meyer says lower manhattan was the perfect spot for one of his famous burger spots, as well as two new restaurants he soon plans to open. >> this neighborhood above almost any i know in the city really hits a sweet spot where you have so many people that work here and need a place to eat during the day and so many people that live here and have no place to eat unless they cross the highway and go into tribeca. and, if it just didn't make sense you wouldn't see all kinds of restaurants. >> reporter: and how can a neighborhood be complete without a fun place to play?

renowned architect david rockwell designed this one. >> 9-11 put architecture front and center to the public in a way it hadn't been before and the significance of place making. what's interesting here is that this playground also visually has to be a great outdoor space for all the financial institutions, for the museum for deutsche bank for the seaport. so it can't just be a place for kids, it's got to be a place for kids that becomes visual attractor for the neighborhood. >> reporter: to be sure lower manhattan is still a thriving business district, home to goldman sachs, merrill lynch in the world financial center and the federal reserve bank of new york. but now there's bed bath & beyond, soul cycle and new schools for all those kids. so, after all the death and destruction that came on 9-11, now there's new life in taking root in lower manhattan. suzanne pratt, "nightly business report," new york.

>> susie: thank you for joining us for this special: remembering the tenth anniversary of september 11. as we say goodnight, we leave you with memories and images from that day. >> it was a beautiful day. clear skies. ten years ago i had the perfect life. but i'll never forget what happened on that day. i turned around right as the plane, when i was in the taxi, hit the first time. >> the first thing i saw were papers flying and i thought to myself, there's no ticker tape parade going on in new york. i looked up and i saw that there was a hole-in-one of the towers. my instinct was to grab my camera and ran a block towards the world trade center. >> everyone was sort of like froze, sort of staring up. trying to fathom what could have happened.

>> my first reaction after i saw the second plane hit, i turned to my colleague and i said this is our pearl harbor. i thought the firemen are here. i figured they would put out the fire. i was down to one minute of videotape. so i went back upstairs. and i remember hearing the rumbling and feeling the rumbling. >> when i saw them collapse, it brought me to my knees. >> it was beyond belief. >> i don't think we could digest what we were actually seeing. it was almost like being in a science fiction move yee where buildings were toppling right before our eyes. >> we were completely covered in that white soot and you couldn't breathe. >> we found some terry cloth towels, cut them up so we could breathe in the smoke and ash that was out there.

>> don't worry about us. we're okay. >> there was just an incredible feeling of, it sounds cheesey but togetherness. >> just one group of people helping another. >> i mean we were the lucky ones, really, because we were able to walk away. >> you know, everyone had friends, friends of friends who didn't make it. >> it was a horrifying day. it was unreal. it was something that one never thought could happen in new york. i'm still not over it. >> -- on a day like that where people come together to help out, you know. >> we relive that event every day of our lives. we will never forget. we will never be allowed to forget nor should we ever forget.

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