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Lou Dobbs Moneyline

Dow Declines 171.32 to 9,919.58; Nasdaq Tumbles 51.49 to 1,791.68; Sun Issues Another Warning

Aired August 30, 2001 - 18:00   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.
ANNOUNCER: From the heart of New York City, this is LOU DOBBS MONEYLINE.

Here now: Lou Dobbs.

LOU DOBBS, CNN ANCHOR: Good evening. In tonight's headlines: A harrowing session on Wall Street today. Stock prices plunged, the fourth losing session for both the Dow and Nasdaq in a row. One of the biggest losers today, Sun Microsystems: It's stock down nearly 18 percent today on huge volume. That after issuing a sales warning. The worst session, in fact, for Sun stock in more than seven years. Also rattling investors today: word that consumer spending in July grew at its slowest rate in nine months.

Stocks today took a perilous decline. Both the Dow and Nasdaq tonight are at near five-month lows. We'll have extensive coverage of the fierce sell-off on Wall Street and the other big stories, of course, tonight.

Our reporters here to give us a preview, beginning with Fred Katayama -- Fred.

FRED KATAYAMA, CNN CORRESPONDENT: Lou, well, Charles Schwab has been telling investors to relax. Tell that to thousands of Schwab workers facing layoffs announced today.

HILLARY LANE, CNN CORRESPONDENT: Pfizer fights back after Nigerian families sue over tests of an experimental meningitis drug on children.

PETER VILES, CNN CORRESPONDENT: What was Michael Jackson doing at the Nasdaq today? Maybe he was teaching tech stocks how to do the moonwalk.

DOBBS: Peter, thank you. All of that and more coming right up on MONEYLINE.

But on Wall Street today more than $8 million in market value a second erased, investors roiled by a warning from Sun Microsystems. Yet another weak economic report. And more antitrust scrutiny for Microsoft.

Today's loss in market cap just adding to the trauma investors have faced over the past year-and-a-half. Since the peak in the Wilshire 5000 Index in the spring of 2000, stocks have lost $4.4 trillion in value.

Christine Romans is at the New York exchange and has the day's report for us on what was a very difficult day on Wall Street -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Difficult, some would say "ugly." Traders say ugly mostly because it's the fourth day in a row of losses, the third day of triple-digit losses. The Dow went down some 500 points this week.

Take a look at today's performance: the Dow down 171 points to 9,919 the closing level. Two stocks down for every one stock up. And Lou, this volume was the best volume we've seen in almost a month. Take a look at some of the Big Board losers here today. The pain was felt across the board. IBM, a competitor with Sun Microsystems in the server market, it joined its rival in heavy selling here today. 3M and AOL-Time Warner, parent of this network, both hitting five-month lows. Motorola an active stock here, following the chip stocks down. And Corning, after news of those job cuts and trouble across its product line -- fiber product line -- coming down sharply here today as well.

Traders saying that it didn't feel like panic selling, Lou, and that's what worries them. It was solid, consistent selling. When they get a panic they like they can maybe sense when there's going to be a turnaround. They didn't feel any kind of sense that was here.

DOBBS: OK; Christine, thank you.

Well, as bad as it was on the Big Board, the Nasdaq today fell nearly 3 percent. It has been a brutal year for companies on the Nasdaq, hundreds of them delisted. The number of Nasdaq-listed companies has plunged nearly 9 percent so far this year. If the year were to end now it would be the biggest annual decline in at least 26 years.

Greg Clarkin is at the Nasdaq marketsite, and has more for us on today's big sell-off there -- Greg.

GREG CLARKIN, CNN CORRESPONDENT: And Lou, what we saw today was really no good news whatsoever. Sun Microsystems saying that a loss looks likely. European investigators widening their probe into Microsoft. And then on top of that you had Corning out with real cautious comments. That's an NYSE stock, but still it's impact was felt on the fiberoptic-related companies here on the Nasdaq.

So on the day the Nasdaq down sharply, and it was lower right from the get-go. The Nasdaq losing 51 points, that's 2.8 percent. Closing now at 1,791. That is the first close below 1,800 since April 9 of this year.

Take a look at some of the stocks that were hit hard today. We mentioned Sun Microsystems: that stick down better than $2 on the day. Microsoft lower. JDS Uniphase down. Oracle shares sharply lower. And Cisco Systems a big loser.

Want to show you back here on the board quickly what kind of week this has been for the Nasdaq. Last Friday we saw a big pop, up to 1,960. You follow this through, it goes trait down Monday, Tuesday, Wednesday, and today down to 1,791. That represents about a 6 1/2 percent drop, Lou, over just the last four sessions. And I'll tell you, in speaking with traders today you hear a lot of folks talking about the Nasdaq going back to retest those April lows around 1,600 -- low 1,600s -- Lou.

DOBBS: The low 1,600s. All right, thank you Greg. Greg Clarkin.

Well now taking a look at some of the stocks moving in after- hours trading -- yes, there is no rest, now, with after-hours trading -- Jennifer Westhoven at the Instinet trading desk -- Jennifer.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: Hi, Lou.

And the theme tonight is in chip equipment stocks after some negative news here. Now, it's not on the same par as, for instance, Sun Microsystems last night. But Novellus held an update -- it's the middle of its third quarter with analysts -- where it talked about the fact that its bookings were going to be at the low end of expectations. Analysts' questions all focusing in on how the company could change its contract to make sure that revenues that are booked, that the money actually comes in. That stock is trading lower; you see it down nearly $1. And other chip equipment stocks are also down: Applied Materials trading lower, and KLA-Tencor, all of them getting decent volume -- Lou.

DOBBS: Jennifer, two quick stocks, if you will. Check Intel and, of course, Sun, which fell precipitously during regular trading hours.

WESTHOVEN: Intel is down about 15 cents; that's about 6/10 of a percent, so it's not too much of a downer. But you might see why it would be down with these other chip stocks. Sun, however, it is the most actively traded stock, but it's only off by about a penny at $1 -- excuse me, $11.06.

DOBBS: Thanks for that correction. It was bad enough today without adding to it, thank you. Jennifer Westhoven, thanks.

The Dow first crossed 10,000 back in March of 1999. Today it fell back below 10,000, as it did briefly this spring. It may seem that the media puts too much focus on milestones and those big, round numbers, but Wall Street does keep a close eye on these key market signposts.

Allan Chernoff has the story.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): The drop below 10,000 is the latest psychological blow to the stock market. JOE CANGEMI, FRANCIS P. MAGLIO & CO.: This 10,000 level is a very, very tough psychological level for us to close under.

CHERNOFF: Ten thousand on the Dow is important, not merely because it's a round number; it also represents a clear break below the Dow's trading range of the past three months. repeatedly in July and August the Dow had bounced off lows between 10,100 and 10,200. But no it's fallen straight through.

ALAN ACKERMAN, FAHNESTOCK & CO.: The market's been in a tight trading range over the last few months; 10,000, psychologically, is a barrier that many people hoped the market would not pierce on the downside. Now that is has, it's raising levels of anxiety.

CHERNOFF: The Nasdaq Composite also dropped below a round number: 1,800. And that, too, represents a clear dip below recent support points.

MICHAEL CARTY, NEW MILLENNIUM ADVISERS: Whenever you get to a support level, traders tend to get very excited about that simply because they feel that we're in a downtrend and not in an uptrend. And no one likes to be catch the falling knife, particularly in the Nasdaq because those stocks are so sensitive.

CHERNOFF (on camera): The bulls still have an argument left in their arsenal: Traditionally, before a major move, the market retests its lows. In this case, the lows of late March and early April, when the Dow fell 9,100 and the Nasdaq Composite down to nearly 1,600. But, of course, the lower the market goes, the harder it is for the bulls to hold on to their case.

Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

DOBBS: Charles Schwab today said it would lay off 11 percent of its staff. The online and discount broker is struggling to cope with a stunning reversal in the market after building up its staff for a period of several years. And this move comes just as the company blankets the airwaves with ads that must be painfully ironic for Schwab employees.

Fred Katayama has the report.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, CHARLES SCHWAB ADVERTISEMENT)

UNIDENTIFIED ACTOR: Is this a good time to get out?

UNIDENTIFIED ACTOR: What if the downtrend continues?

UNIDENTIFIED ACTOR: First, just relax. When markets are down, we all get fearful about it.

(END VIDEO CLIP) KATAYAMA (voice-over): Try telling that to Schwab staff. With customers still fearful, Charles Schwab is cutting jobs again. This time up to 2,400 employees, or 11 percent of its work force. This comes on top of the roughly 3,000 job cuts announced in March. The combined cuts will shrink the ranks by nearly 25 percent this year.

MARK CONSTANT, LEHMAN BROTHERS: They're certainly more significant than that which we've seen at most of the investment banks. But you have to keep in mind that Schwab's head count grew a lot faster. You're now just back,now, to '99-ish type head count levels at Schwab, and you've got a business environment that's more like '99.

KATAYAMA: Schwab's staff ballooned more than 74 percent over the last two years to handle increased trading volume. By comparison, Merrill Lynch's staff grew just 10.4 percent over the same period.

But now Schwab's clients are trading 50 percent less than at the beginning of the year, slashing its commission revenues. Schwab's once-mighty stock has plunged, and so has its market value. At it's peak in March last year, Schwab was valued at nearly $60 billion, topping Merrill Lynch. Today it is worth less than half of Merill.

Employment in the brokerage industry has dipped 6/10 of a percent so far this year.

RICHARD REPETTO, PUTNAM LOVELL SECURITIES: Given what's going on in the market, you can't rule out more cuts at any place.

KATAYAMA: Credit Suisse First Boston's CFO said, expect a cost- cutting announcement next week.

(END VIDEOTAPE)

KATAYAMA: Schwab says its job cuts will result in charges of $225 million this year and produce savings of $65 million per quarter beginning in 2002. Analysts estimate those savings should help lift per-share earnings 7 to 8 cents next year -- Lou.

DOBBS: Well, Schwab today, but nearly every brokerage is facing precisely the same environment, right?

KATAYAMA: Right, Lou, and most have now announced a first round of layoffs. The question is, when will the second round come. Analysts expect more.

DOBBS: All right, Fred, thank you. Fred Katayama.

Well, Microsoft has a new legal battle, this one far away from home. The European Commission is expanding its investigation of Microsoft and whether it's unfairly bundled some of its software with Windows 2000. All of this coming as Microsoft defends itself in a separate investigation by the Justice Department. Bruce Francis with the report.

(BEGIN VIDEOTAPE) BRUCE FRANCIS, CNN CORRESPONDENT (voice-over): The European Communication says Microsoft may have violated competition laws by tying its Media Player to the Windows 2000 operating system. The commission is merging that investigation with another on low-end servers, a critical area for Microsoft.

The commission is now telling Microsoft that it believes the company has violated antitrust rules in that area as well. That's based on a complaint by a competitor, Sun Microsystems. The commission believes that Microsoft withheld technical information about linking PCs to servers.

Ed Black runs a trade group, backed in part by Microsoft's competitors, including CNN parent AOL/Time Warner.

ED BLACK, COMPUTER AND COMM. INDUSTRY ASSOCIATION: We're talking about the neural infrastructure of most organizations -- of companies, private institutions and even of government -- and having that market move into monopoly control would have very broad significance.

FRANCIS: In a statement, Microsoft's chief of European operations said: "We are confident that once it has completed its investigation, the European Commission will be assured that we run our business in full compliance with EU law."

The best news for Microsoft: The EC said it would not move to block the release of Windows XP on October 25, but analysts like Greg Vogel are still concerned.

GREG VOGEL, BANC OF AMERICA SECURITIES: There's potential for the same kind of issues that Microsoft is having here in the U.S., that they expand into the European market as well, and there would have to be some remedy then slapped on Microsoft's business and how they do business in that market as well, and that could be very limiting to Microsoft's ability to grow.

(END VIDEOTAPE)

FRANCIS: The EC can impose a wide range of remedies, including fines of up to 10 percent of revenues. In Microsoft's case, that could mean a fine of $2.5 billion. Sizable, but we know they have got that cash to pay it.

DOBBS: Well, first they have got to be forced to pay it. How does it look?

FRANCIS: That's right. I think this is a serious sign, and one definitely to watch for. There's a lot of room between now and an eventual decision by the EC, one that should involve some negotiation, one hopes.

DOBBS: Yeah, Bruce, I can't help but think back to March of 2000, when the Justice Department came with its case against Microsoft. It was precisely at that point we started watching things unwind in the market. You know, one could argue the causal relationships, but here we go again with Microsoft, it seems beset by -- in nearly every quarter.

FRANCIS: Yeah. I think you can't underestimate the timing of today's news and what happens in the Nasdaq. I don't think there's a perfect correlation there, I certainly don't think it helps.

DOBBS: Yeah, but government intervention -- the government not often helping markets.

FRANCIS: Don't underestimate that EU. Ask Jack Welch, right?

DOBBS: Bruce, thanks. Bruce Francis.

Well, ahead here on MONEYLINE, which star has fallen farther: the Nasdaq's or Michael Jackson's? A question you probably never considered. You may think still there's no reason to, but there's a reason that I bring it up.

Unsolved mysteries at the Internal Revenue Service, about 40,000 of them. The case of the missing returns.

And more Americans are on unemployment than at any time since the early '90s. I'll be talking with an economist who sees nonetheless recovery ahead.

(COMMERCIAL BREAK)

DOBBS: A report out today, the third this week showing signs of consumer weakness. In fact, consumer spending up 0.1 percent, that is the slowest reading in nine months. Reports out Monday and Tuesday showing consumer confidence and existing home sales had fallen as well. Personal income gaining a strong 0.5 percent, bolstered by the tax rebate. Another report out today: Weekly claims for unemployment benefits, which fell by 1,000 last week, but the total number of people receiving those benefits is now near a nine-year high.

Well, despite that slight decline in new jobless claims last week, news like the Charles Schwab announcement today, the decision to cut 2,400 jobs, shows just how the employment picture remains volatile. Louise Schiavone has the report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): For most workers, the highlight of Labor Day is time away from labor. But the last long weekend of the summer inevitably gives way to the reality of work, a reality embraced by some and reviled by others.

KARLYN BOWMAN, AMERICAN ENTERPRISE INSTITUTE: Most Americans are very satisfied with their jobs. Polls taken about 20 years apart find that about 70 percent of workers say that they'd decide without hesitation to take the same job again.

SCHIAVONE: That's a contrast to a recent survey by organized labor.

GEOFFREY GARIN, PETER HART RESEARCH ASSOCIATION: Compared to five years ago, people in the work force are much more likely to say now than they were that employers have the upper hand, that there is no longer a level playing field.

SCHIAVONE: Companies have cut nearly a million jobs from January through the end of July.

JOHN CHALLENGER, CHALLENGER, GRAY & CHRISTMAS: It is much different than it was a year ago Labor Day, when the economy was just coming off the hottest summer on record, almost 5.7 percent growth, people had jobs, they were being offered perks.

SCHIAVONE: But this analyst notes that at the same time, on average, displaced workers are finding new jobs in under three months. As for loyalty, many workers seem to understand the effects of an unpredictable economy and don't expect a job for life.

(END VIDEOTAPE)

SCHIAVONE: In the 21st century, the workplace notion of loyalty has been replaced by the notion of commitment, the desire to do a good job and of course be acknowledged for it. And hopefully, that notion of commitment will carry through to the next place of employment as well -- Lou.

DOBBS: Thank you, Louise. Louise Schiavone from Washington, D.C.

Well, for more now on this economy we're joined by economist Ian Shepherdson who I think it's fair to say rather optimistic about where we are with this economy. And tell me this, with all that we're seeing in this market, all that we're seeing in terms of job cuts, what is the basis for your optimism at this point?

IAN SHEPHERDSON, HIGH FREQUENCY ECONOMICS: There is a couple of things. First, of course, the Fed has been cutting interest rates very aggressively. They started back in January, so we've had a few months now to get used to the idea. It's making it easier for companies to breathe while they get rid of their big piles of excess inventory, and it's also cheering consumers up a bit. They're still pretty miserable compared to a year ago, but they're not quite as miserable as they were.

DOBBS: So, we've got a misery index that we're going to examine closely. Ian, as we look at the revision in the second quarter GDP, one of the interesting aspects was first almost a 15 percent decline in business investment, a staggering number. Those interest rate cuts will not really counteract the effect of that. How do you see us responding as an economy, finding some resilience with which to bounce back against that kind of decline?

SHEPHERDSON: Yeah, the resilience certainly isn't going to come back in that capital spending any time soon, especially in the tech sector, where things are still absolutely awful.

But if you look at some of the other bits of the economy, particularly this big downdraft in inventories that we've been seeing, that's good news. It hurts in the short-term, it's very painful for companies not to give stuff away at cheap prices, it hurts their earnings. But once they've got rid of it, and once they see a bit of a pick-up in consumer demand -- and there are a couple of signs that things are moving -- then they're in a good position to start building for the future, and I think that's exactly where we are now. It's just not obvious in the earnings numbers yet.

DOBBS: In terms as you point out, the inventories and the (UNINTELLIGIBLE) particularly in manufacturing, while there was a decline in inventories, those inventories, upon closer examination, show that we are we're just basically, in manufacturing, about the same level as we were back in January. Does that concern you at all?

SHEPHERDSON: There's still a lot of work to be done. I don't want to try and give the impression that everything is great right now, it is not. but I think we're moving in the right direction. And what tends to happen when we move in that direction, is we start to see a bit of a recovery in industrial sentiment. Remember, the Fed told us just a couple of weeks ago that industrial production, all that stopped declining in July for the first time this year, so there are a few straws in the wind, nothing very great but better than it was.

DOBBS: Ian, good to have you with us. And it is always good to talk with an optimist.

SHEPHERDSON: Thank you.

DOBBS: And if you're a taxpayer living in the Northeast, you may not approve of the government's handling of your tax returns. As many as 40,000 of the tax returns have been lost or destroyed at a processing center operated by Melon Bank in Pittsburgh. The tax payments are estimated to be worth more than $800 million. The Treasury Department began investigating the matter after taxpayers started complained that their checks had not been cleared by their banks. Melon may have a little explaining to do.

Coming up next on MONEYLINE, police capture one of the FBI's most wanted fugitives. We'll have the story for you. Also we'll also have details of a lawsuit against Pfizer, charges that the drug maker illegally used an experimental drug on some Nigerian children.

And Michael Jackson opened trading at the Nasdaq today. We'll tell you what the gloved one was up to, and what it signals for competition between exchanges, next here on MONEYLINE.

(COMMERCIAL BREAK)

DOBBS: A 10-day nationwide manhunt has come to an end. Nikolay Soltys captured today, hiding in his mother's backyard. Police were tipped off by a 911 call from the fugitive's brother. Soltys is suspected of killing six of his relatives, including his pregnant wife and three-year-old son.

More than 1,500 Californians are back home tonight. The residents of Weaverville had been chased out by a raging wildfire. Officials now say that blaze was caused by sparks from a passing automobile. That fire is still burning, but most of it has been contained. Estimates put the damage at more than $4 million.

More protests in Oregon over water rights. Farmers and environmentalists facing off again in Klamath Falls, Oregon. At issue, who owns the water in the area's lake. The protesters say the citizens do, and they need it for their irrigation. The government disagrees, saying it needs to keep water levels where they are to protect some endangered fish -- sucker fish in point of fact.

For the first time ever, replacement National Football League referees will take the field this evening. Contract talks broke down between the league and the NFL Referee's Association. The league claims the union wants a 400 percent pay hike. The referees say they have made concessions, including a significant reduction in rookie salary demands. The NFL is offering a 40 percent pay increase immediately 100 percent by 2003.

How do these NFL referees stack up in pay against their piers? Let's take a look. A first-year ref makes more than $24,000 a year. That seems minuscule compared to rookie NHL refs who make $115,000 a year, but when you look at the number of games per season, NFL referees make the most per game. And a Major League Baseball umpire fares the worst, earning about $650 per game.

Drug maker Pfizer is now under legal fire for allegedly giving harmful meningitis drugs to some Nigerian children without receiving proper consent. Pfizer says it did everything by the book and says its study even saved lives. Hillary Lane is here now and has the story for us.

LANE: Lou, this is a $120 million class-action lawsuit that is filed by the families of seven Nigerian children who died, and 23 who were left with major disabilities after taking part in a test of Pfizer's antibiotic Trovan. 15,000 people in all died during an outbreak of bacterial meningitis in Nigeria in 1996. Pfizer, at the time, conducted a test of 200 children.

One hundred got Trovan in pill form. The others got Chloramphenicol, which was the gold standard intravenous antibiotic for meningitis. But the lawsuit says, in a lower-than-recommended dose. Doctors did know which patients were taking each drug. The suit contends that "rather than provide the children with a safe effective and proven therapy for bacterial meningitis, Pfizer chose to select children to participate in a medical experiment of a new untested and unproven drug without first obtaining their informed consent."

Pfizer responded today in a written statement, saying "the study was conducted with the approval of the Nigerian federal and state governments and with consent from the families of treated patients." So the major issues at question now: Did Pfizer have the necessary approvals, and did the families in the trial give their consent? Analysts say this may not be a case that settles quickly.

ANTHONY BUTLER, LEHMAN BROTHERS: Most of the time pharmaceutical companies will either pay the cases if they are liable, or will simply litigate them, which often takes years.

LANE: The Nigerian government is conducting its own investigation -- Lou.

DOBBS: Thank you very much. Up in the next in MONEYLINE, we will be talking about a real thriller at the Nasdaq today. Not the market drop, but Michael Jackson. We'll tell you why the gloved one was there. We'll also be talking with the CEO of Yellow, the freight hauler who just keeps on trucking' despite a slowing economy.

Wall Street's has been hammered this week as investors know. We'll be talking with a man who says don't look for a turnaround anytime soon. So much more optimism.

ANNOUNCER: Coming up, Lou speaks with the chief investment officer from First Albany, Hugh Johnson.

(COMMERCIAL BREAK)

DOBBS: Michael Jackson opens the Nasdaq today, and the markets take another big plunge. Any connection? Who knows? But we do know the sell-off was brutal, and we have several reports for you.

Christine Romans?

ROMANS: Lou, the Dow is down below 10,000 for the first time in five months. I'll take a look at the numbers behind the numbers.

CLARKIN: With the Nasdaq down 125 points already this week, I'll tell you where some traders see the composite going.

VILES: Greg had some competition at the Nasdaq today. Michael Jackson was in the house. Ahead, why the king of pop was checking out tech stocks -- Lou?

DOBBS: Peter, we'll also be talking with investment strategist Hugh Johnson. And I've got to tell you, when it comes to Wall Street these days, he's not exactly what we'd call optimistic.

Here's the problem: consumers are spending less. Sun Microsystems is earning less, and that has traders nervous. And it all adds up to the Dow Jones Industrials dropping below 10,000 for the first time since April 9th, down more than 500 points just this week.

Declining issues beating out advancers by a whopping two-to-one margin. Corning, among the most actives on the big board today. The fiber optic cable maker cutting another 1,000 jobs, closing a couple of plants, because demand for its products is simply falling.

And the Nasdaq also hit hard, of course, closing at its lowest point since April 9th, now down 125 points for the week after falling 3 percent today. Decliners on the Nasdaq leading advancers, again, by two-to-one margin. It was, as we said, a sell-off. Sun Microsystems leading the way, as I said. Microsoft also getting hit on news that Europe is looking into the way Microsoft bundles its media player with its Windows operating system. Now let's go to Christine Romans at the New York Exchange for a sense of what traders and investors are saying there -- Christine?

ROMANS: Lou, four down days -- where do we go from here? Well, it helps to take a look behind the numbers to see where things are, technically speaking. Folks talking about the fact that today the volume was pretty good, almost 1.2 billion shares changing hands here, the best volume we've seen since August 2nd. Also they're saying, even though 10,000 is an emotional mark, now it's resistant. They're pointing out that 9,938 is a 200-week moving average. We've been mentioning this level. The Dow closed below it. This is a level that is very rarely breached, and it is usually breached in very severe down trends.

Scant support, traders say, between 10,000 and 9,106. Lou, 9,106 is that low, intraday low, from March 22nd. And all eyes are on Mr. Greenspan now tomorrow to see if the fundamental traders can take over where the technicians have left off.

WATERS: I can just imagine how assured and reassure all those investors are watching you, Christine, are, as you say that there is support at 9.100.

ROMANS: Absolutely. There's a little support at 9,300, in case you want to try stop it there.

DOBBS: OK, Christine, thanks. Christine Romans.

Now let's go to Greg Clarkin at the Nasdaq marketsite -- Greg?

CLARKIN: Lou, let's start by mentioning some of these April lows that we talk about a lot. You have to go back to April 4th, and that's when the Nasdaq really bottomed out. It closed at 1,638 that day, but on an intraday trading basis, it hit 1,619. So when you hear traders refer to retesting the April lows, those are the figures that they're referring back to.

So what else is on their minds today? Well, basically, after the Sun Microsystems news, traders are wondering, you know, who's next out here. What technology company is going to step up and say that business is weaker than expected or continuing to weaken? That's a real fear. At this point, one trader said to me, you know, at this point why would you buy these tech stocks? He said, in terms of some of the big-name technology companies, it's probably dead money for six to nine months, in his words, at least. So there's really no impetus out there to buy.

There are some holiday jitters as well, in terms of a short-term outlook. Right now, a lot of folks don't want to be in these positions of technology shares ahead of a long three-day weekend. And on top of that you can expect to see traders disappear tomorrow, make for some choppy trading, as one trader put it. Tomorrow trading desks will be manned by absentee landlords while the big guys are away. They said, you know, there will be some traders there, but they expect to see some volatile price swings, especially as the day progresses -- Lou. DOBBS: Well, at least everybody gets a three-day break, no matter who is down there.

CLARKIN: Exactly, whether it's buyers or sellers.

DOBBS: Thanks, Greg Clarkin.

Topping tonight's MONEYLINE movers, Coca-Cola gaining more than $1 a share, one of only four winning Dow stocks on the day. Positive comments by ABN Amro's meeting with Coke management lifting that stock. Coke outpacing rival Pepsi on overall soft drink volume, and it reported strong water sales.

Tech Data today, gaining more than $5 a share. The provider of IT products and services beating second quarter estimates. Though still sharply lower from a year ago, Tech Data upping its third quarter guidance.

AES, falling nearly $3 a share. The global power company offering $1.4 billion in cash for a 43 percent stake in a Venezuelan telecommunications company, CANTV. Shares of AES losing more than half their value from the 52-week high.

Well, despite current conditions that typically trigger the beginning of a bull market, Hugh Johnson cautions the end of the profits recession is not in sight. He joins us now from Albany, New York, along with economist Ian Shepherdson, who is rejoining us.

Hugh, good to see you.

(VIDEO GAP)

DOBBS: The first question I've got is do you really believe, after saying you thought that there would be a September recovery in this market, that it's just simply not at hand now?

HUGH JOHNSON, FIRST ALBANY SECURITIES: No, I wouldn't say it's not in hand, because we still have all of the conditions that signal the end of a bear market and the start of bull market. They were here in July, they're here today. The only problem is is that we don't have any confirmation from investors -- that's what bothers me. In other words, the markets themselves are sending me a signal that, you know, it might be little bit early.

So the only thing we really need -- we've got the conditions -- is we've got the see the stock market do better, we have to see interest rates start to edge up. All of those signs from the financial markets themselves that say look, we've passed the bottom. And we just don't have that yet. I'm looking for it.

DOBBS: You're looking for it. Investors are obviously looking for something here. Are they looking for some earnings performance, perhaps?

JOHNSON: You're absolutely right, Lou. They want just some sign of light at the end of the tunnel. In other words, comments like we got the other day from Cisco, comments to the effect that, look, sales and earnings for my company are still dismal, but they're not as dismal as the second quarter. That is, sequentially, they're getting better. And you see that sign from enough companies collectively, investors will start to become more optimistic and that will reflected in the stock market going higher. I think you've got that coming ahead.

DOBBS: Let me ask you, Hugh. We just started -- we just talked about Tech Data moving up $5 a share today -- and not to focus entirely on Tech Data or any other stock, but general -- on the basis that it performed better than what Wall Street expected, although it was sharply lower than a year ago in its performance. How long is that sort of thing going to go on in this market?

JOHNSON: Well, you know, it's -- the issue now is not how you did versus what happened a year ago. We know that earnings are going to be lower than a year ago, at least in the third quarter and the fourth quarter. But just some piece of good news is enough to trigger some buying in an individual stock. And for the overall market, you need that to come from, say, five or 10 companies. They can't be just any five or 10 companies. They have to be companies that are obviously market leaders: IBM, Cisco, Sun, and those types.

DOBBS: And how soon does that happen?

JOHNSON: Well, that's a good question. September is an important month, obviously, as the warning season. We start to hear about the third quarter. December, we hear about the fourth quarter. I don't know if it's September or it's December, but I think sometime in the next, say, one to three months, you'll start to get better news on the sales and earnings side of the thing, and that should move the market higher.

We're probably pretty close to a bottom, I think, now. At least I hope so.

DOBBS: OK. Ian -- I'm going to bring Ian Shepherdson back in with us here, Hugh.

You've heard what Hugh said. Does it make sense to you, in terms of the economic recovery that you now see at hand?

SHEPHERDSON: Yes, I think there are two stories. I think Hugh's right, on the tech side, we've got to hear the news from the companies themselves. Some of those big names have got to come out and say, look, things aren't getting worse and we can see them getting better over the next few months.

But outside tech, I think we need just the big economic numbers: the purchasing manager's survey, the confidence numbers, production. Once they start moving up, even just a little bit, that's going to be such a contrast with what we've been seeing in the last few months, I think it's going to snap the market around very quickly.

DOBBS: What about the old saw that the market is suggesting to you what will be reality in this economy six months hence. This is not suggesting great things for the economy right now, if that's how it were to hold.

SHEPHERDSON: No, that's true. The market now is telling you things are pretty bad. But I think that six months from now, there's a reasonable chance things are going to look much better. And between now and then, that means that I think the market has to do something.

If you look back at the performance of the market in the last recession, it moved very quickly. It went from being very beat up to being very bullish in a very, very short space of time.

DOBBS: OK. Hugh, it's always good to have you with us. Ian, thanks for coming back and joining us. And I tell you, you gentlemen are the basis of what looks like a very conflicted market right now. I hope that we, like you, could see some reality to the optimism over the next little while. Thank you gentlemen.

Still ahead here on MONEYLINE, the king of pop at the Nasdaq. He wasn't there to make a trade, but the Nasdaq is hoping to profit from his appearance. We'll be telling you all about it.

And coming up next, a leading economic indicator: trucking. It's one of the best, in fact. This is one of the first sectors to ever sense a recovery. We'll see if they are sensing recovery now.

(COMMERCIAL BREAK)

DOBBS: This just in to CNN, breaking news...

(VIDEO GAP)

DOBBS: ... rebound on the economy, we've invited the chairman and CEO of Yellow, Bill Zollars, to join us tonight. Bill, good to have you with us.

BILL ZOLLARS, CHAIRMAN & CEO, YELLOW: Thanks, great to be here.

DOBBS: Bill, I know that certainly you have been affected by this slowdown. You have (UNINTELLIGIBLE) a number of employees, I believe -- what -- 1,500, as well you've had to put significant cost controls in effect. What is the state of your business tonight?

ZOLLARS: Well, Lou, the way to describe it I guess would be we are bouncing along the bottom. I think we're really well-positioned for the turn. Everyone is looking for the turn. And today, we had another bad day on the street, and I'm sure that everybody is looking forward to the turn as much as we are. But right now, I would describe it as bouncing along the bottom.

DOBBS: Bouncing along the bottom. And in terms of your shipping, you're seeing no uptick at this point?

ZOLLARS: Well, here's what happens historically in our industry: As we go into a downturn, we see customers ship fewer shipments and then we see the shipments start so get smaller. The upside kind of turns that around, and when the economy comes back, shipments become bigger and then we get more shipments. Where we are right now is kind of in the bubble. Shipments have gotten bigger, but we haven't seen the uptick in shipments that we would expect over the course of a return to a normal, healthy economy.

DOBBS: Your company's performance in all of this, you have got to be pleased. I know that you've -- since taking over the company (AUDIO GAP), you changed the focus of the company, put more emphasis on the customer, but even with all that you have done, this has to be particularly frustrating to you. With all you've accomplished as...

(VIDEO GAP)

(COMMERCIAL BREAK)

(AUDIO AND VIDEO GAP)

DOBBS: ... Procter & Gamble has been engaging in corporate espionage. Joining me now, the journalist who broke the story, Andy Serwer, editor at large of "Fortune" -- Andy.

ANDY SERWER, EDITOR AT LARGE, "FORTUNE": Lou, how are you.

DOBBS: Well, I'm good. In terms of this story, the suggesting of industrial espionage in the hair products business, that's pretty remarkable.

SERWER: It's an extraordinary story, Lou. We've discovered that Procter & Gamble was engaged in an espionage campaign against its competitors in hair care, specifically Unilever, and they found that -- when the P&G executives found out about this, the higher-ups, they informed their counterparts at Unilever. Unilever began its own investigation. That's been going on since April. The two companies are right now engaged in very high-level negotiations to settle the matter.

DOBBS: And this sort of thing, as we know, does occur. But for how long did this go on?

SERWER: Well, it started in the fall and lasted until early spring, and as you're suggesting it does go on, but it does cross the lines sometimes, and P&G hired these operatives, they have now described it as a rogue operation where some people got out of control. There is dumpster diving, and there's been some suggestions that some of these operatives were misrepresenting themselves.

DOBBS: OK. Eddie Serwer, good story. Thanks.

SERWER: Thanks.

DOBBS: Eddie Serwer.

Well, in a world where image is everything, two of Wall Street's most recognizable brands, the Nasdaq and the New York Exchange, are always fighting for their share of limelight. Today, Michael Jackson, ringing what passes for the opening bell at the Nasdaq marketsite, and with it one of the biggest publicity stunts in the index's 30-year history.

Peter Viles has the story of a media event, and what it is saying about the markets.

(BEGIN VIDEOTAPE)

CROWD (singing): Happy birthday to you, happy birthday to you.

VILES (voice-over): The "Today Show" took it live.

MICHAEL JACKSON, MUSICIAN: I love you, and all the fans, thank you.

VILES: So did MSNBC, CNN, and CNNFN. A true multimedia moment: The king of pop presiding over the opening of Nasdaq trading.

(on camera): Now, Michael Jackson's a big celebrity, and he's put out some decent records over the years, but don't you have to ask yourself, what does Michael Jackson have to do with the stock market?

(voice-over): If you're looking for an investment angle, it's not there; this is about two brands in search of a few minutes of free media exposure.

DAVID WEILDS, EXECUTIVE VICE PRESIDENT, NASDAQ: We are part of the popular culture of the United States, and just as many people such as Michael Jackson are part of the popular culture. This is about defining who we are. It's about broader press exposure.

VILES: It's a game the New York Stock Exchange also plays, and plays well -- whether it's Muhammad Ali or supermodels, the goal is similar.

KAREN BENEZRA, EDITOR, "BRANDWEEK": I think the idea of Nasdaq or the NYSE basically, saying, "hey, we know you, we know what you like, we know big brands, here's a safe place to be with us."

VILES: Which in good times leads to new listings. The Nasdaq has hosted 36 IPOs this year, raising five billion plus; the Big Board, 37 IPOs, for 24 billion. A hotter topic lately, delistings. The Nasdaq holds a big lead in that category. As a courtesy to both, we looked at five-year return rather than year-to-date. The NYSE Composite holds a slight edge.

Back to the image, though: If Jackson were to lend his singing voice to the Nasdaq -- well, the Big Board's been there and done that, with a singer named Fat Boy Slim.

Peter Viles, CNN Financial News, New York.

(END VIDEOTAPE)

DOBBS: Coming up next, "Ahead of the Curve." Stay with us.

(COMMERCIAL BREAK) DOBBS: Updating the story we reported to you some moments ago, that American West aircraft, American West Airlines Boeing 737 is, as we've said, about to make an emergency landing at Sky Harbor Airport in Phoenix, Arizona. Flight 344 took off from Sky Harbor, bound for Puerto Vallarta earlier this afternoon.

We are told that the aircraft is now nearing the airport. There have been some reports that the aircraft is in sight of the airport, but those are not yet confirmed, and these pictures of course are coming to you from our affiliate in Phoenix, Arizona, and we will here at CNN keep you up-to-date on the development as flight 344 makes its way back to Sky Harbor Airport with that shredded tire in Phoenix, Arizona.

Well, taking a look at what we could expect on Wall Street: Tomorrow, we'll be receiving of course the factory orders report for the month of July and the final University of Michigan consumer sentiment report for August, and this coming at a time when consumer confidence is a critical part of what will determine the course of this market. We'll be joined here on MONEYLINE tomorrow night by Eugene Profit, the president and chief investment officer of Profit Funds. He'll be here, and we hope you will join as well.

For tonight, that is MONEYLINE. We thank you for being with us. I'm Lou Dobbs. Good night from New York. "FIRST EVENING NEWS" is coming up next.

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