CNN LIVE EVENT/SPECIAL
Dow, Nasdaq End the Day With Gains
Aired September 24, 2001 - 15:57 ET
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: Good afternoon. I'm Lou Dobbs in New York. Wall Street rebounding from one of its worst weeks ever. The market surging today, climbing off the lowest levels in three years. The Dow up more than 300 points with just about 2 1/2 minutes before the close, this ending an eight-session losing streak. The Nasdaq recovering a quarter of last week's big losses.
For more now on the markets, Rhonda Schaffler at the New York Exchange, Greg Clarkin at the Nasdaq marketsite.
Rhonda, let's turn to you first.
RHONDA SCHAFFLER, CNN CORRESPONDENT: Lou, this was just the session that investors and traders had been waiting and hoping for. The Dow did not close, it will not close at its best level of the session, but it only gave back about 50 points from the best level. For a while, the Dow was trading over 400 points.
This was a broad rally, many sectors moving higher, including some of those sectors hit hard last week, like insurance stocks, airline stocks. We also saw even the retailers put in a strong performance on the day -- Lou.
DOBBS: Rhonda, thanks. Let's turn to you, Greg, over at the market site.
GREG CLARKIN, CNN CORRESPONDENT: And Lou, for only the second time this month, the Nasdaq looks like it will finish with a gain, up about 71 points, 72 points right now. That's about a 5 percent gain. It, too, came back a little bit off the session highs of 1,507. It sits right now at 1,495. So maintaining that momentum into the closing bell, and that's something that a lot of folks are really examining, see if there's going to be any spillover effect for tomorrow -- Lou.
DOBBS: And Greg, in short form, what's driving this market today?
CLARKIN: Right now, we've just seen a lot of those beaten-down stocks from last week. Just about every major technology sector is nicely higher. We're looking at semiconductor stocks sharply higher: software, hardware, Internet stocks, networking stocks. About the only group that had a little trouble today were the biotechnology shares. So a lot of those stocks that were hammered last week, especially the big caps, really coming back in a big way today.
DOBBS: And if I may, Rhonda, going back to you, what's the principal driver there at the Big Board?
SCHAFFLER: Some of this is an oversold bounce, as they say. But there were also strategists who were telling people to go out and buy stocks. Goldman Sachs Abby Joseph Cohen, for instance, raising the asset allocation in a model portfolio. So you had some upbeat comments from Wall Street.
To echo what Greg says, what people want to see now is follow- through. The hope is that even a little bit of gain tomorrow will go a long way to continue to keep investor confidence boosted and so much better than what we saw just a week ago on this day, when the Dow had its worst one day point loss ever.
DOBBS: One of the floor traders there, Rhonda, just walking by and applauding either you or the close. And there we are, the balcony, just a few seconds from the closing bell. There it is.
The balcony, obviously some of the emergency, New York emergency workers and the fire department represented there, as they have been over the course of the past week now.
Rhonda, let's go back -- the Dow closing up, looks like just about 4 percent. How about the advancing issues?
SCHAFFLER: Advancers leading decliners by close to a three-to- one margin, so that's pretty impressive, as far as broad strength. The volume not as heavy as what we saw last week, and one trader suggested to me, you know, maybe that's a positive sign that the people that wanted to sell did so last week. As far as the Dow's performance today, it was the best one-day point gain since the spring.
Let's take a look at some of the Dow leaders that led the way. It's across the board. Companies like American Express, Boeing, Citigroup, General Electric, Home Depot, Honeywell -- which today announced it's going to take a charge at the furloughed workers. That stock did manage to move up. IBM and Wal-Mart.
Also, remember the airlines last weekend, hit hard? Over the weekend, of course, Congress approving a funding measure for airlines, and the group did bounce up today, as did the Dow transport average, up about 75 points -- Lou.
DOBBS: And I think we should at least point out it was a modest bounce for those airlines today. But overall, a terrific day on the big board. The Nasdaq, back to Greg Clarkin -- Greg.
CLARKIN: And, Lou, let's give you all those market internals here as well. One-point-nine billion shares traded, some good volume. Advanced decliners, we saw advancing issues way out ahead of declining issues, by about a better than 2-to-1 ratio throughout the day.
Now, I mentioned the big caps before. Take a run through some of the big name technology shares, you can see the pop that they got today. Microsoft, up two bucks, Intel, Dell, Oracle, also nice gains. Networking stocks had a big day. We saw JDS Uniphase come out this morning and give really basically a stable outlook. We see the business is still poor, but it's getting better. We'll be kind of a better view of the future, and that gave a big pop to JDS U. That stock was up.
Cisco was up, Ciena was up. Juniper Networks, also with a nice gain. SO the networking stocks really on the heels of those positive comments out of JDS U. -- had a big pop today.
Overall again, Lou, the strength is really kind of broad-based, here. Again, biotech was the only kind of semi-weakling today.
DOBBS: Greg, thanks a lot. Greg Clarkin.
And as Rhonda Schaffler pointed out, Abby Joseph Cohen, one of the principle strategists on this market today, raising her stock allocation. She joins us now.
Abby, what is there here that made you decide that it was time to raise your allocation?
ABBY JOSEPH COHEN, GOLDMAN SACHS: There are several different factors, Lou. The first and most important is that we think the stock market is just too cheap. This is an economy which has short-term troubles, not long-term troubles. And we think the S&P 500 is dramatically undervalued. Add on to that a whole host of other factors. We thought it was time to step up and to buy some stocks.
DOBBS: And as you put it in your note this morning, "stand up." And obviously, some investors did that today. How much of this, in your judgment, today was margin-related short covering?
COHEN: I have no way to judge how important that was, but we know that important long-term investors were also in there buying. Many long-term investors, such as pension programs, endowments and good old-fashioned balance portfolio managers, closed last Friday recognizing their portfolios were just too low in stocks for the long- term, and they went in there buying.
In addition, we've had confidence boosting measures taken by the Federal Reserve, the federal government, state and local governments, indicating to us that whatever is going on in the economy, the duration and the depth of it will be mitigated by policy action. That was very good news, indeed.
DOBBS: And you're talking about here, federal spending stimulus?
COHEN: The Federal Reserve lowering interest rates, the Fed providing liquidity, the SEC allowing companies to repurchase shares more easily, and of course, the federal government putting together a package for the airlines for New York City, and perhaps a more generalized stimulus package.
DOBBS: How important -- you identified some $34 billion in announced stock buybacks, corporate buybacks, how important do you think they were to today's activity in the market and for the weeks ahead?
COHEN: The announcement by corporations that they might be repurchasing shares, I think is more of a confidence measure. However, companies do have the cash to do it if they want to. They also have the cash to acquire other companies. We think there will be a lot of business combinations, ongoing.
There's one other element that was very important here today as well. We're calling it the Elton John factor -- we're still standing. We here in lower Manhattan made it through an arduous week last week. We walked to work past smoldering ruins, past National Guardsmen, yet the banking system was uninterrupted. The financial markets re-opened, worked smoothly, handled record volumes. We rested up over the weekend, thought about things and concluded the stock market was too cheap.
DOBBS: OK. And you raised your allocation as a result. Abbey Joseph Cohen, always good to talk with you. Thanks for being here.
Well, that's a look at the markets for now. I'll be back with "MONEYLINE" at 6:00 Eastern.
CNN's coverage of America's new war continues.
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