THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Well, the markets today tumbling. Right from the opening bell, the Dow Jones industrials plunging more than 650 points, about 7 percent. The Dow officially falling into bear market territory. That is defined by a 20 percent decline or more drop from a market's all-time closing high.
The Dow hit its record high of 11,722 just over a year and a half ago. It's now down 24 percent from that all-time high. The Nasdaq down about 6 1/2 percent on the day's session, closing at levels not seen since October of 1998.
Going to turn to our correspondents following the day's sell-off on Wall Street, and we're going to begin with Rhonda Schaffler at the New York Stock Exchange -- Rhonda.
RHONDA SCHAFFLER, CNN CORRESPONDENT: Lou, this will be a day when records are set, the biggest one-day point loss for the Dow industrials and the busiest trading day on the floor of the New York Stock Exchange. But the Dow at this point does not look like it will close at its worst levels of the session. For a brief time, the Dow dropped more than 700 points this afternoon as that chart illustrates. It did bounce back from that.
The other thing that's important to mention here, Lou, is that throughout the day, the selling, while heavy, has been orderly. We have just about a minute and a half before that closing bell rings, last 90 seconds to get an order. There is no panic on this trading floor.
I have been on this floor when there is panic. There is none today.
This was a day when the markets opened and they functioned, and while the sell-off was severe, the markets still were made.
Lou, one thing I want to point out to as we head up to the closing bell, you were here for the very emotional bell-ringing this morning. To ring the closing bell this afternoon is an NYSE security officer who was responsible for evacuating 130 people from the World Trade Center -- Lou.
DOBBS: An exceptional day, and as you say, wrapping up the day's session, Rhonda, it began the same way, orderly trading throughout.
Let's go now to Greg Clarkin over at the Nasdaq marketsite, where trading has been both brisk and down -- Greg.
GREG CLARKIN, CNN CORRESPONDENT: And Lou, I'll tell you, today's performance by the Nasdaq impressing a lot of folks. They're taking comfort in the fact that the Nasdaq is ending the session really right about where it began the session. It opened with about a 110, 110- point drop, and that's pretty much where it finds itself now. Volume, percentage loss, point loss, not even close to being in the top 10 today. So those internal benchmarks really holding up nicely. And Nasdaq coming out of this session fairly well. We never saw the wave after wave of selling a lot of folks anticipated after that early wave of selling -- Lou.
DOBBS: And Greg, as you say, the market not approaching even on percentage or absolute terms.
We're going back to the New York Stock Exchange. You're listening to the closing bell on this historic session after these markets were open today after four days of closure following last week's devastating terrorist attack on downtown Manhattan Wall Street. The Nasdaq, as Greg Clarkin said, not fitting into the top 10 in either percentage or point terms. However, that is not the case for the Dow, this is the largest point decline ever for the Dow Jones Industrials.
But again in percentage terms, it appears that this -- in percentage terms, this decline today, as large as it is in point terms, did not hit the top 10 point declines ever of percentage terms again for the Dow Jones Industrials.
Let's go back to Rhonda Schaffler. Rhonda, as you said, orderly trading. Nonetheless, a significant decline. The sectors that are hardest hit today, airlines, of course. What else?
SCHAFFLER: Well, Lou, let's start first with a couple of the big losers on the Dow because this was a brutal day of selling. We want to show you what was responsible for much of the Dow's losses. It did include some of the cyclical names, as well as financial stocks on the Dow.
American Express, Boeing, Citigroup, General Electric, General Motors, among those stocks hitting very hard. The airlines on a percentage basis were the worst performers. That was not surprising when we consider the news we've heard from airlines over the weekend.
The Dow Transportation Average sliding better than 400 points. There's the damage for the airlines stocks. Continental, Delta, UAL and Southwest all sharply lower. Southwest faring a little bit better on a percentage basis.
Also the insurance stocks were among those hit very hard. Allstate, American International, Chubb, Cigna and MetLife with losses. But Lou, there was buying here. It was both defensive in nature and defense stocks. And that's what we're going to take a look at now.
That would include companies like General Dynamics, Northrup Grumman, Raytheon, Level 3 and Lockheed Martin. They were among some of the winners here. This was, Lou, the busiest trading day in the history of the New York Stock Exchange. You pointed out the damage with the Dow in terms of points. But this was a day where traders spent a lot of time reaching out to each other, hugging each other, just happy to see each other. Again, it was not the best of days in the markets, but for these traders here, just three blocks away from ground zero, it was a day where they can at least feel comforted with each other -- Lou.
DOBBS: Rhonda, as you say, they have heightened and mixed emotion there. Those traders, the floor traders and specialists, many of them have lost friends, relatives and certainly professional colleagues a few blocks at the World Trade Center. But they all, obviously expressing through their presence and hard work today, a commitment to getting the markets open, back trading. And $13 trillion by far the world's largest marketplace back in action.
And let's go to Greg Clarkin over the Nasdaq marketsite. Greg, your thoughts after this difficult down day?
CLARKIN: Well, Lou, I don't know if you an hear the applause behind me, but on the floor here at the Nasdaq, that same delegation that rang the opening bell downtown at the NYSE is here. And that is Treasury Secretary Paul O'Neill. You had Richard Grasso from the NYSE. Rick Simmons right behind Mr. O'Neill there from the Nasdaq.
A lot of relief, a lot of smiles on those faces after what would have to be considered by many measures as successful day of trading. They overcame a monumental task to get the markets opened today. And they performed fairly well. No systems problems, Lou. The technical aspect of things seemed to hold up very nicely today. It was never really swamped by volume. Let's take a look, if we can, at some of the big technology stocks, give you a sense of how they fared on the day.
CLARKIN: Yes, Lou.
DOBBS: Greg, before you do that, let's go back to that picture, if I could ask just for a moment.
DOBBS: Let's go back to the picture of the Treasury Secretary talking, because I think it is worth noting that with Rick Simmons, the CEO of the Nasdaq is Richard Grasso, obviously Treasury Secretary Paul O'Neill talking.
We've had a historic display of unity on Wall Street with Dick Grasso, the chairman of the New York Exchange there at the Nasdaq marketsite. The first time in history that the chairman of the New York Exchange has ever been present at the closing bell at the Nasdaq.
As this morning, we had another first. That is that the CEO, Rick Simmons of the Nasdaq was present at the opening bell of the Big Board. And that was an important symbolic display of unity on Wall Street and the commitment and cooperation in purpose of these financial leaders, who have been demonstrating for the past week under the difficult of circumstances.
Greg, I'm sorry. Back to you.
CLARKIN: That's OK, Lou, indeed it was. You know, I spoke to some of the NYSE delegation as they were filing in here, a few minutes ago. They said, you know, they've never been up here. So you know, these fierce rivals really kind of putting aside a competitiveness and getting together to get the market up and running today.
Here's just a sampling the big caps. You can see they were all on the downside. The travel stocks as expected big losers today. We saw Northwest Airlines. Skywest losing about 35 percent of their value. A lot of the smaller, regional carriers reside on the Nasdaq. Mesa Air, one of them, they were down.
And then also those online travel sites, Expedia, Priceline.com, all up very sharply today. On the upside though, a lot of the companies, the technology companies related to security. Invision Technologies, these folks make the detection systems for airports to screen the baggage. That stock rising. At one point, it was up 200 percent today. You can see the big pop on that at the close.
Polycom, this is a company that's into video conferencing field. The feeling is that with business travel being affected, video conferencing becomes more popular. They were among the big winners as well today. So a handful of stocks posting nice gains. And overall, the Nasdaq down triple digits, but still, a lot of folks coming away fairly pleased with the performance really of the markets today.
DOBBS: And as you pointed out, Greg, today's decline in both percentage terms and point terms not qualifying amongst the 10 worst declines on the Nasdaq in historical terms.
Well, the Federal Reserve and central banks all around the world today taking concerted, coordinated action to stabilize markets and to support currencies. Kathleen Hays, our economics correspondent, has that part of the story.
KATHLEEN HAYS, CNN CORRESPONDENT: Thank you very much, Lou. And of course, an important part of the story it is today. And it wasn't just the Federal Reserve. This is a global effort to prop up the world's financial system, to try to get the economy moving ahead again. The Federal Reserve cut its key short-term rate, the Fed funds rate, by 50-basis points. The European central bank also cut. The Bank of Canada cut. The Swiss National Bank cut.
In the policy statement accompanying the Fed's action, which is closely watched by people on Wall Street, the Fed said it will continue supply unusually long volumes of liquidity to financial markets as needed, until more normal market functioning is restored. It also even before the tragic events of last week, that employment, production, business spending remained weak. And last week's events have the potential to damp spending further. The big question now, will the U.S. economy avoid recession.
Well, guess what? A lot of people say we're already in recession, and this just makes it worse, including former Fed governor Wayne Angel, who said he expects the Fed to cut again on October 2 by 25-basis points, maybe even a half percentage point.
So in light of all this, why didn't the bond market do better? The bond market had a bit of a set back today, after a big rally last week. Well, one big reason is they think that the Federal Reserve will succeed, along with massive stimulus from the federal government. The Federal government is dusting off an old, powerful tool, fiscal stimulus, tax cut. $40 billion in relief. Delaw Smith from The Conference Board here earlier today, Lou, an old friend of yours as well. Delaw says don't forget, that's a powerful thrust, a big part of the economy. He thinks it's going to work.
DOBBS: OK, Kathleen. Thank you very much, Kathleen Hays. I want to turn now to get some perspective on the day's activities on Wall Street to Michael Holland. He's the chairman of the Holland Company.
Mike good, to have you with us.
MICHAEL HOLLAND, THE HOLLAND COMPANY: Good to be here.
DOBBS: The -- what we have watched today, getting these markets back in action some ways, would you agree, is more important than the point loss or gain on the day?
HOLLAND: The point loss or gain was insignificant, no matter what happened. The huge story was that in a war zone, that just occurred a few days ago, the New York Stock Exchange, the American Stock Exchange, the Nasdaq all functioned spectacularly without a hitch. I would say in a word, Lou, in today in New York, the bad guys lost, the good guys won.
DOBBS: And we're going to see the good guys asserting themselves increasingly in these markets. And the economic imperatives around the world, as well as military now it appears, and in other initiatives. But in terms of these markets over the next several days, do you expect to see continued order? This was a down market, but orderly. Do you expect to see it...
HOLLAND: Today was the day. If anyone wanted to disrupt this market, and I'll imply, you know, bad intentions to some people. Others who were simply weak-kneed. And I'm talking primarily outside the United States, if they wanted to do something today was the day they failed.
The first two hours this morning were the day for disruption and instability. As you just have reported and your reporters have just told us, it was a spectacular success. The system was tested. It was tried and came through with blazing good marks.
DOBBS: OK. Michael Holland, thank you as always.
HOLLAND: Thank you, Lou.
DOBBS: Well, that is the latest on what has been an incredibly emotional and volatile but orderly day on Wall Street.
Here in New York, I'm Lou Dobbs reporting. Thank you.
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