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America's New War: Market Watchers Looking For Three Days of Follow Through

Aired September 25, 2001 - 06:11   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.
CAROL LIN, CNN ANCHOR: And certainly a lot of investors wanting to jump these days but yesterday a nice little market rally.

LEON HARRIS: Yes, big time.

LIN: So we're going to see what's ahead today. We're going to go to Amanda Lang. She's at the New York Stock Exchange this morning.

What do you make of yesterday's rally, Amanda?

AMANDA LANG, CNN CORRESPONDENT: Well, market watchers are saying that it's not surprising that this was a market that was oversold and, of course, it's a market that's suffered since we reopened last Monday, every day was a down day, and what they're saying is we need to see follow-through. Very nice move to the upside and very nice volume yesterday. They'd like to see three days of it before we can really call this a turn in the market. They're not saying that we need to see three days of 300-odd point gains on the Big Board, but they are saying that you need decent gains and particularly you need volume behind the move to the upside.

There's a lot of factors that could be affecting this market that could account for a jump like we saw yesterday. And until we see it continue, they say, we're still really trading at a bottom for this -- what is, you know, clearly a bear market and was in August and we're not really out of the woods yet.

LIN: All right, well we're just going to continue to navel (ph) pick, though, because it was such a dramatic turn in the market, what are they reading into the rise? I mean what did yesterday's rise mean in and of itself?

LANG: There are a couple of factors, Carol, one of them is that when we say oversold I mean this is a market of stocks not the stock market, as they say, and many of the blue chip companies that have been around since, you know, our grandparents were buying stocks are now selling at valuable levels, are selling at prices that many of us haven't seen in recent years and that makes it attractive to some investors.

We're also, of course, hearing from some people that you get other factors, short covering, those people that have bet on market declines. When it looks like the market might rise, they buy stock to cover their positions. It's kind of a technical issue ,but it does mean that there's upward pressure on the market. It's a short-term factor, though, so we enjoy this while it happens and it certainly was welcome respite from what...

LIN: Sure.

LANG: ... we've been seeing in this market. But we need to see some follow-through.

Europe is a bit of a concern today. We're seeing negativity coming out of Europe and that could, of course, mean that we may see a little bit of negativity here.

LIN: Already, and we've got these consumer confidence numbers coming out today and some other figures. What can you tell us about those and how they might move the market?

LANG: Consumer confidence at 10:00 a.m. and existing home sales. Now the consumer confidence number will be closely watched because it does include, at least in parts of the survey, some data from September. In other words, since September 11, since those terrorist attacks on U.S. soil. So that's going to be pretty key in telling us really our first bit of information other than anecdotal information from retailers how the U.S. consumer is responding. Most of the report, though, is still pre-September 11, as with existing home sales. A little bit backward looking.

And what market watchers are saying is probably not a big impact, although if it's a hugely negative number, unfortunately I hate to tell you this, it's likely going to be an impact on the down side rather than any other way. It's probably not going to send the markets higher all by itself.

LIN: All right. Well you know, the market like the weather in Atlanta, if you don't like it, just wait 15 minutes.

LANG: Exactly.

LIN: We'll see what happens. Thanks, Amanda, good to see you.

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