Skip to main content
CNN.com /TRANSCRIPTS

CNN TV
EDITIONS





CNN LIVE EVENT/SPECIAL

Dow Advances 149.33; Nasdaq Advances 41.43

Aired November 6, 2001 - 15:58   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, HOST: We're just a couple of minutes away from the closing bell on the New York Exchange. Stocks today rallying after the Fed cut interest rates by a half point, bringing the Fed funds rate down to two percent.

That is a 40-year low. The tenth interest rate cut of the year, as the Fed is trying to keep the economy from slowing further. Joining me now, Kathleen Hays to tell us me all about it. What does it mean?

KATHLEEN HAYS, CNN FINANCIAL NEWS: It means that the Fed is worried about the economy too, Lou. In fact, this is one of the most aggressive rounds of rate cutting that we've had since the 1981-82 recession, and that was a pretty bad recession indeed.

In its policy statement, the Fed laid out some worries. But if you take a look at the -- at the steps down in interest rates, you can see how rapid it's been.

At the beginning of the year, a lot of people were still predicting that this economy would be growing 2.5 to 3 percent by the end of the year. Instead, the tenth rate cut, the lowest level in rates since the early '60s. That's the Fed's key short term rate -- the Fed funds rate. They also cut the discount rate to 1.5 percent.

What are they so worried about? Well, they cited heightened economic uncertainty, deteriorating business conditions. In other words, they think things are still getting worse. And here's something to think about.

The focus not just on these conditions in the U.S., but overseas. A lot of the economists saying, "You know what? Maybe they are trying to give the European Central Bank a little bit of a nudge." They meet on Thursday. They didn't cut rates at the last opportunity a couple of weeks ago. Maybe they are trying to send a little subtle message.

DOBBS: I'm not sure I quite buy into that, because I don't think the European Central Bank needs much of a nudge. They are going to have to work through their policy problems and their economic problems. There is the closing bell.

Stocks rebounding after the Fed, as Kathleen said, cut interest rates by 50 basis points. Rhonda at the New York Exchange, and she joins us now. Rhonda. RHONDA SCHAFFLER, CNN CORRESPONDENT: Lou, this was a significant rebound and here's why: at this point, Dow Jones Industrial Average is less than 20 points away from the pre-attack level, the pre- September 11th attack. The Dow is the only average that hasn't caught up to it, and that is seen as key for this market.

Look what happened after the Fed announcement. You had some indecision, right when the announcement came out. That's very typical as traders try to figure out what it do next. What they decided to was buy. This was a very aggressive rally, Lou. Advancers came out well in front of decliners. Lot of volume, 1.3 billion shares. And a significant move for the Dow Industrials.

Let's take a look at some of the components in the Dow average. We'll show you where the gains came from. Hewlett-Packard had it's own story going on. Stock is up $2.86. Members of the Hewlett family say they're not going to support Hewlett's planned merger with Compaq. The companies themselves say they're still committed. Approval is expected, in fact, the Hewlett family only owns 5 percent of these shares outstanding. But, still, some late breaking news on that deal.

IBM, a big winner. Up better than 4. 3M slipped about $1.50. Merck up two cents. A broad rally and a significant move for the Dow as traders decided another rate cut from the Federal Reserve was just what was needed to get this market going. Lou.

DOBBS: The Hewlett family doesn't like the deal at this late stage?

SCHAFFLER: That is the story, Lou. And I'll tell you, since that deal was announced, of course, stock of Hewlett-Packard and Compaq have slipped.

DOBBS: they don't like the stock price, all right.

SCHAFFLER: No, they do not.

DOBBS: Thanks a lot. Rhonda Schaffler. Let's go over to the NASDAQ. Good things happening there as well. Greg Clarkin to tell us all about it. Greg?

CLARKIN: And, Lou, what we really saw was a very concentrated kind of run up in the last 45 minutes of trading or so. Really brought the NASDAQ up over 1800 for the first time in a significant fashion since late August. So, this rate cut really kind of giving the impetus to have the NASDAQ break above 1800.

Sharp gain on the day, up about 41 points or so, closing very close to session highs. And you can see the big jump there on the right side of the screen.

And if you go back it September 21st's low of 1423, closing level today, 1834, you're looking at a better than 400-point gain, a roughly 28, 29 percent jump in that period of time.

Take a look at some of the big name tech stocks, how they faired on the day. Let's start with shares of Microsoft. It was around break even or so when some of the later news hit this afternoon that some states are still going to go it alone against Microsoft. The stock actually began to climb along with the rest of the tech sector, up $1.50 on the day.

Cisco Systems lent a nice underpinning of support throughout the day on the heels of its earnings report yesterday; was up 62 cents. And Dell Computer really started to jump when word of that family feud with Hewlett-Packard and Compaq became public. That was up about 90 cents. Sun Microsystems gaining 31 to close at 12.37 So, all in all, Lou, a pretty solid day on the composite at 1834. Back to you.

DOBBS: Greg, thanks. Greg Clarkin.

Well, that's our quick check on the markets. We'll be back at 6:00 p.m. Eastern on CNN with MONEYLINE. Among my guest, former prime minister of Israel, Benjamin Netanyahu. We'll talk about the global fight against terrorism.

And an exclusive interview with the outgoing president of the American Red Cross, Dr. Bernadine Healey (ph). We'll be talking about the criticism her organization is receiving regarding the distribution of funds for the families and victims of September 11th. All of that and more, including Kathleen Hays (ph). We'll be back at 6 for MONEYLINE. Please join us then.

I'm Lou Dobbs in New York City.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


 
 
 
 


 Search   

Back to the top