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Stock Watch: Jobless Rate Rises to 4.1 Percent, Easing Inflation Fears on Wall StreetAired June 2, 2000 - 2:01 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: It has taken a year of trying, and today it looks as if the government's top bankers may finally be succeeding in putting the brakes on the U.S. economy. The most dramatic sign is the biggest jump in the jobless rate since President Clinton took office. As reported today by the Labor Department, unemployment is up 0.2 percent to 4.1 percent. That is still considered low.
In other signs the economy's slowing, the Commerce Department reports factory orders suffered their biggest slump since the 1990 recession, 4.3 percent. And orders for durable goods dropped by 6.5 percent, the biggest decline in nine years.
The news appears to sit well with the stock markets. The reason: It may persuade the Fed to end its campaign to jack up interest rates.
CNN's Terry Keenan has the latest on the markets from the New York Stock Exchange -- Terry.
TERRY KEENAN, CNN CORRESPONDENT: Hi there, Natalie. Well, you're right. In a stock market that is very worried that this economy is on overdrive, these reports were just what the doctor ordered. And they also capped off a week of evidence that showed that the economy may be slowing down after the Federal Reserve has raised interest rates six times since the end of last June.
Just have to look at the market numbers to see how investors are embracing these reports. We have solid rallies right across the board. Let's go to the boards: There you see the Dow Jones industrials up 128 points. We're well off our worst -- our best levels of the day, but still up a full percentage point. Hewlett- Packard up 7, J.P. Morgan up $6. Financial stocks like the news and the perception that the Federal Reserve may be done raising interest rates.
But the most explosive action is at the Nasdaq where we're having a virtual melt-up in a lot of the technology names. The Nasdaq composite is currently trading up 5 percent. And to put this in some perspective, we are up 10 percent in the last two days alone, up 15 percent for the week. That would indeed be a record for the tech- heavy Nasdaq stocks.
And some of the big movers we're seeing today, Cisco shares, which of course are very widely held, up $3 1/2. We also have Intel up 3 1/2. So, clearly, investors like this report and the buying is coming on a lot of heavy trading volume.
Back to you, Andria.
ALLEN: Terry, it's Natalie, but that's all right. When were Alan Greenspan and company expected to meet again and possibly take some action?
KEENAN: They're going to meet in the final week of June. And there has been the perception that the Federal Reserve would raise interest rates perhaps one more time, maybe another time in August, and then not move ahead of the presidential election because the Federal Reserve has not moved in the months before a presidential election all the way back to 1932. The thinking now is that, given these economic reports that we have seen, perhaps the Fed is done with raising interest rates or we'll get just one more small rate increase, perhaps in June or in the meeting following that, which would be in late August.
ALLEN: OK, Terry Keenan on the market today reacting to this economic report, thanks.
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