CNN LIVE EVENT/SPECIAL
Dow, Nasdaq Close Way Up
Aired October 3, 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. A rally on Wall Street after the president announces plans for an economic stimulus package that could amount as much as $75 billion. The Dow climbing above 9,000 first time since the tenth of September. But it is the Nasdaq that is a standout today.
The Nasdaq up more than 6 percent as we head into the final just two and a half minutes of trading. We have complete market coverage for you. Rhonda Schaffler at the New York Stock Exchange. Greg Clarkin over at the Nasdaq and we will begin with you, Rhonda, quite a day.
RHONDA SCHAFFLER, CNN CORRESPONDENT: It is, Lou. I mean, rally across the board. It is hard for the bulls to find argument with this one, the volume there, the advance decline line very strong. The market just built on the advance. You mentioned the economic stimulus proposal. It was after word of that came to Wall Street that we saw the market really start to accelerate its gains as the chart indicates.
The market got some help as some individual stocks that had some negative earnings news performed pretty well. There was also an economic report on the service sector before the news came from President Bush that was seen as encouraging to the markets. Market observers like the way this market has behaved. The last three days, some real interesting turn around action.
Before the bell even started trading here today, Lou, many thought the market was going to plunge.
DOBBS: Well, so much for them, Rhonda. Thank you very much. Also helping fuel the day's rally, acquisitive comments from Cisco Systems CEO. Greg Clarkin at the Nasdaq market site and has the details for us -- Greg.
GREG CLARKIN, CNN CORRESPONDENT: Yes, Lou, it was really one of those days where things lined up nicely. Now you mentioned the economic stimulus package, that helped carry the market for a bid about mid morning and then just when that leg of the rally was leveling off, CEO John Chambers of Cisco saying the company is comfortable with the estimates for the quarter and that really basically just propelled technology stocks.
Cisco Systems alone at last check was up about 21 percent. It had been up as much as 24 percent. So we saw all the networking stocks, all the communications chip companies that feed those chips into that networking equipment, those stocks just soaring today and the Nasdaq up about 100 points, Lou, before coming back just a little bit over the last half hour.
DOBBS: OK, Greg, thanks very much. Greg Clarkin from the Nasdaq market site. The closing bell -- we are approaching the closing bell on Wall Street. We are about 20 seconds away and ringing the bell today -- there they are -- retired baseball greats Bobby Thomson and Ralph Branca. It was 50 years ago today that Thomson of the New York Giants hit "the shot heard 'round the world" off of Brooklyn Dodgers' pitcher Branca to win the Giants the pennant. Those gentlemen were overseeing the close of a solid day on Wall Street. There's the bell!
The Dow is finishing up more than 2 percent, the Nasdaq up more than 6 percent. Back to Rhonda Schaffler who is there listening to and watching the closing bell ceremonies -- Rhonda.
SCHAFFLER: Lou, I think it is safe to say it was a home run for the markets today. Let's look at some of the Dow stocks that helped power the advance. Greg was talking a little bit about Cisco. We saw some decent strength in technology stocks across the board including IBM which you can see on that screen. It was one of the best Dow performers. Boeing having another nice performance. Home Depo strong, retailers as a group, moving higher.
United Technology is at the bottom, up better than 250. Even though there was a broad advance, there was one area of the market that did not participate and that is stocks. We are going to show you some of those: Eli Lilly, part of the problem, stock took a hit, down better than $3 as it warned on Q4 as well as all of next year due to slowing sales in Prozac. We also saw weakness in Pfizer, Merck and Schering-Plough.
Some argue that that's not a negative sign as some people move out of some of the defensive stocks, pharmaceutical had been a bit of a safe haven when the market had been selling off -- Lou.
DOBBS: Rhonda, we have that title, "Depressed Drugs," but those are relatively minor moves for those stocks, all except for Eli Lilly.
SCHAFFLER: That's right. In fact a lot of those stocks came back from steeper lows as this rally continued to build through the afternoon. DOBBS: Terrific, Rhonda, thank you. Rhonda Schaffler on the floor of the New York Stock Exchange.
The Nasdaq posting a triple digit gain on the session for the first time since early July. We head to the Nasdaq marketsite now, and Greg Clarkin.
CLARKIN: Lou, I mentioned Cisco System really being the star of the show. Let's take a look at what that stock did on the day and again, after CEO John Chambers said the company was comfortable with estimates for the quarter, that just took off. Ends up with about a 20 percent gain, so up $2.57 on the day.
Other big name tech stocks moved right along: Dell Computer getting $2.43, Oracle is up better than a buck and if you look at Microsoft, you will see that they gained nicely as well. Intel was higher. The chip sector and the software sectors really the standout sectors today.
We saw the indices that measure those sectors up anywhere from 9- 11 percent throughout much of the day. Sun Microsystems also gaining nicely, and Lou, you had a day where out traders came in this morning wondering when the Nasdaq was going to reclaim 1,500. Well now they stand just a handful of points shy of 1,600 after this powerful rally.
DOBBS: And volume and the breadth of the market today on the Nasdaq?
CLARKIN: It was about two to one in terms of breadth. We had advancing issues over declining issues. Volume pretty significant. Last look it was about 2.4, 2.5 billion shares and traders say that really indicates that institutional big money was kind of coming back into these technology stocks today.
DOBBS: And that is very important, as you point out. Greg Clarkin, thank you.
As we reported to you, President Bush today outlining his economic proposals for economic stimulus and that package of proposals could amount to $75 billion. Kathleen Hays is here with a closer look at the proposal and the possible effect -- Kathleen.
KATHLEEN HAYS, CNN CORRESPONDENT: Of course, we hope we know what we hope the effect is, that is to get the economy back on its feet. Let's look at the numbers of the package. We just mentioned that it could total as much as $75 billion, they are talking 60 to 75 billion on top of the $50 billion in relief funds already pledged, already in the pipeline. So that is even more than the $100 billion people were talking about.
Bush and O'Neill saying that they want also to see some tax relief for individuals, maybe speed up the income tax cuts, maybe some more tax rebates for businesses. How about things like investment tax credits. This is aimed at shoring up consumer and business confidence, getting businesses investing again -- that's one reason why we went into a recession or a recession-like economy, because businesses have pulled back so much -- and giving job relief to people who have been put out of work after the attacks.
We had notable economist on earlier today talking about this. He's all for it, and says, at least for now, that government should go ahead full throttle.
(BEGIN VIDEO CLIP)
ROBERT HORMATS, GOLDMAN SACHS: The key point I think is not so much the short-term stimulus, which should be very bold and very aggressive, and I do think large numbers are appropriate. The key point is not to build this into the baseline so that we are going to be faced with big problems, fiscal problems, five, six, seven years from now when we don't need that stimulus. So do it big in a temporary way, but don't abandon fiscal responsibility over the medium term. That's the key balance here.
(END VIDEO CLIP)
HAYS: And of course that will have Democrats saying we are worried that if we spend too much now, our surplus is already declining. We might jeopardize it for later. You know, Greg and Rhonda mentioned the services number from the purchasing managers being above 50 again, indicating some expansion there, more good news.
And I think there's more and more anecdotal reports, Lou, that maybe the economy is coming back a little quicker than people thought.
DOBBS: Well, especially when you hear economists and terrific people like Bob Hormats talking about bold, aggressive stimulus, but fiscal responsibility. That is a difficult balancing act.
DOBBS: Kathleen Hays.
That's a check of the markets to this hour. We will be back at 6:00 p.m. Eastern with MONEYLINE. We hope you will join us. Among my guests this evening the former Assistant Secretary Of Defense Larry Korb, of the council foreign relation. We will be talking about the maze, the dangerous maze that the Bush Administration has to work its way through and particularly the Middle East.
Mort Zuckerman, will also be joining us, the editor of "U.S. News and World Report." Until then, I'm Lou Dobbs in New York.
ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com