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U.S. Stock Market Opens; World Markets Down Sharply; President to Speak on Economy
Aired October 10, 2008 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: Sell, sell, sell. The Dow dived nearly 700 points to a five-year low. That was yesterday, and today, global markets feed on the frenzy. More plunges from Europe to Asia. Now Wall Street braces for an opening and we are there.
It is Friday, October 10th. Heidi's off today. I'm Betty Nguyen and you are in the CNN NEWSROOM.
Just when you thought it couldn't get any worse, breathtaking losses shake stock markets around the world. Take a look. White knuckles on Wall Street, just 30 minutes before the opening bell.
Will it rebound from yesterday's gut-wrenching close?
That capped off the biggest seven-day streak of losses in history. And there are troubling signs overseas. Markets tanked in Asia. Japan's Nikkei index plunges 10 percent.
The situation almost as bleak in Europe. Overnight losses there, they are steep. And some markets even suspended trading.
The nation's financial crisis is so alarming that, at this point, President Bush is going to talk about it, and that is going to happen next hour. Of course, we will bring it to you live.
So what does all of this mean to you? Well, the CNN money team is here to break it all down for us. Richard Quest is in London, Andrew Stevens in Hong Kong, and in New York, Christine Romans and Ali Velshi.
I want to begin there, and Christine, if you can, please, tally up all this damage for us.
CHRISTINE ROMANS, CNN CORRESPONDENT: All right, here's your damage report. Overnight, huge losses for the Asian markets. You know you had Japan down almost 10 percent. That's the second time that's happened this week.
Why is that significant? Because Japan can be seen as the leading indicator for the global economy. Clearly fears of a global recession here. You had Russia is closed, you had other stock markets that were closed once they plunged at the open and then reopened again.
I mean it was very nerve wracking. There is a deficit of confidence and a surplus of fear, and that has been pretty much increasing all week.
Just this week the Dow is down 17.4 percent, that's $2.3 trillion in stock market wealth that has just disappeared. And if you look year to date, you can see the Dow is down 35 percent. The NASDAQ down 38 percent. The S&P 500 down 38 percent.
I mean, everyone knows what this math means but let's put it in very stark terms. $100,000 investment in stocks in the beginning of the year is today worth $62,000. If your retirement is very, very heavily in stocks, you're talking about a lot of losses that you have taken, at least on paper so far this year.
NGUYEN: All right, so how do we stop all this bleeding? And that's what a lot of people are saying, especially if you look at that numbers -- don't even try looking at that 401(k), it's not going to be a pretty sight.
Ali Velshi, joining us now with the latest on that.
Ali, you know, the Feds, the central bankers, even the president coming out today...
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes.
NGUYEN: ... and speaking. What needs to be done?
VELSHI: Well, the president is going to come out at 10:25. We've heard from the president or Ben Bernanke or Henry Paulson every day and it has had no effect on markets.
Christine just talked about this crisis of confidence, the way you stop the bleeding is you instill confidence into the market. Now what have we done so far?
We've offered this bailout of financial firms, $700 billion. The government on Monday offered short-term loans to companies for the first time. They directly will loan to companies that are having trouble raising money in the capital markets.
There was this coordinated interest rate cut on Tuesday, and now there's discussion that they may take stake -- take ownership stake in various banks in the United States that they have to fund.
And none of this is working just yet. Now what we have today is a Dow -- Susan will tell you about this -- that is set to open probably more than 300 points to the downside. And what a lot of traders are saying is that you need a forceful selloff, probably early in the day, with high volume and commitment to get us to something that we think of as the bottom of this market.
And remember, the bottom is not something you hit in one day -- sometimes it bounces around for months. But the bottom line is there are a lot of traders who say they're getting to ready to get in because they think that stocks might be worthwhile but they need to see this purge happen.
And we might be in the midst of the purge as we speak.
NGUYEN: So we're seeing the beginning of this bottom that you're talking about? Is that what you're saying?
VELSHI: We might be. That's what some people tell us. I mean...
NGUYEN: OK.
VELSHI: All lessons from history might be thrown out the window this time because things are so unusual but that's what some people are telling us.
NGUYEN: All right. Maybe that's a little bit of silver lining in all of this, Ali.
VELSHI: Yes.
NGUYEN: We do appreciate that. Also, Christine, thank you.
And as you know, the opening bell will take place at the bottom of the hour and when it does, we will show that to you. But in the meantime, though, let's go overseas, because again, in London, we are seeing some large drops there as well.
CNN's Richard Quest joins us now.
How are the markets responding?
RICHARD QUEST, CNN INTERNATIONAL BUSINESS ANCHOR: Well, we started off bad, in fact, we started off very badly in London. The Paris and the Frankfurt markets all down 10 percent at the open.
It's not often you see that. In fact, I'm trying to remember. I can't actually remember, maybe once or twice, ever seeing a market open in Europe as far down as that. But they have pulled back a bit, just a tad.
I am not getting the balloons out or the streamers and shouting for joy, because the reason we are now just treading water, waiting for President Bush to speak in the Rose Garden and waiting to see what the U.S. markets open on Wall Street.
The real unpalatable, unvarnished, unpleasant truth of all this is we are in unchartered waters. And as Ali Velshi quite rightly pointed out no one really knows which way this is going to go.
NGUYEN: All right, thank you, Richard, for that.
Let's take it to Asia where the markets have closed and another huge selloff rattles nerves around the world.
CNN's Andrew Stevens joins us from Hong Kong. Hey there, Andrew.
ANDREW STEVENS, CNN CORRESPONDENT: Hey, Betty. It's a similar situation. Just what Richard was saying, we are in unchartered waters and in Asia, particularly, Asian investors are looking for New York to lead them in whatever direction and, obviously, the direction has been down relentlessly.
We had big, big balls here. Japan, as you said, down 9.6 percent. It was down 9.3 percent just two days ago, so that's an 18 percent fall over just three days. Hong Kong, where I am, down 8 percent today, down 16 percent over three days as well.
So there really is a fear in Hong Kong, across this region, and the fear is, what will happen to the really economy in the U.S. if the G7 doesn't come out with a grand plan, which actually turns this around.
If those money markets don't get unfrozen, the U.S. economy, the European economy are in trouble and that means there's trouble, obviously, for Asia, which, of course, is the -- sort of the manufacturing center, the engine of the export world.
So it's all pretty grim picture here, Betty.
NGUYEN: All right, thank you for that. And so let's see where New York and Washington leads us today.
And for that, let's start at the White House. President Bush, as we mentioned, is making a statement on the economy next hour. And CNN's Brianna Keilar is there. So what are you expecting to hear from the president today?
BRIANNA KEILAR, CNN CORRESPONDENT: Well, this is all about boosting confidence, giving some reassurance to the Americans and to the markets that help is on the way in the form of this economic bailout package.
We're not expecting to hear any announcements of policy changes but we are expecting President Bush to say that the Treasury Department is working to move forward, to get credit flowing so that there aren't more problems with home loans, getting car loans, loans to send kids to college.
But I should tell you that President Bush and Treasury Secretary Henry Paulson have been urging patience, saying this isn't going to be a fix to this credit crunch overnight.
And just to give you a sense of the realization on the part of the White House of what a global issue this economic crisis is, President Bush has invited the finance ministers of the G7, the so- called G7 countries, industrialized nations, to the White House.
That's going to take place tomorrow. That's how he's spending part of his Saturday, and we are expecting him to make some comments after that. But we are, again, going to hear him, making some comments in the Rose Garden in here in about an hour -- Betty.
NGUYEN: Absolutely. And we'll be listening very closely. Brianna Keilar joining us live from the White House. And again, that Rose Garden statement will happen at 10:25 a.m. Eastern Time today, and, of course, when it does, we will bring it to you live.
Twenty-five days to go, and every second counts in the final run- up to the presidential election. Republican John McCain moves into more Democratic territory today for a rally in Lacrosse, Wisconsin. McCain has been stepping up his attacks on rival Barack Obama, as he tries to nail down the state's 10 electoral votes.
Obama? Well, he's looking for votes today as well in Ohio. Right now he's due at a rally in the city of Chillicothe. We'll take that live in just a few minutes.
But a little bit later this morning, we will go to that McCain rally in Wisconsin. So we're watching it all for you today.
In the meantime, though, phony forms? 2,000 voter registration cards in just one county are suspect and our Special Investigations Unit is on the story.
(COMMERCIAL BREAK)
NGUYEN: Well, the election is just over three weeks away, and dozens of states say fraudulent voter registrations are being filed. Election officials suspect the liberal activist group, ACORN, is behind them and SIU's Drew Griffin looks into it.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT (voice over): There are 5,000 of them.
(on camera): These?
RUTHANN HOAGLAND (R), LAKE COUNTY ELECTIONS BOARD: These.
GRIFFIN: These.
HOAGLAND: Those.
GRIFFIN: And these.
(voice over): They are new voter registration applications turned in by the community organizing group ACORN, which has launched a massive voter registration drive.
And with 5,000 applications in this one county dumped on just before the October 6th deadline it looked to elections board administrator, Ruthann Hoagland, like ACORN was extremely successful, until her workers began finding problems.
(on camera): A lot of them?
HOAGLAND: 50 percent. We had close to 5,000 total from ACORN, and so far we have identified about 2100. GRIFFIN: So roughly half of them...
HOAGLAND: Roughly half.
GRIFFIN: ... are bad.
HOAGLAND: Correct.
GRIFFIN: Registered to a dead person, registered to a person who lives at a fast food...
HOAGLAND: Yes.
GRIFFIN: Shop?
HOAGLAND: Yes.
GRIFFIN: Or just all of them, amazingly, in the same hand?
HOAGLAND: Yes. Yes. All the signatures look exactly the same. Everything on the card filled out looks just the same.
GRIFFIN: Ruthann, fraud?
HOAGLAND: We have no idea what the motive behind it is. It's just overwhelming to us.
GRIFFIN (voice-over): It's not that some are bad. Once they started going through them, every one they looked at was bad. Hoagland decided to stop the review altogether, work on other apparently legitimate registrations and get back to the other half of what she now calls the fake pile later.
HOAGLAND: It's frustrating. It's very frustrating.
GRIFFIN (on camera): Here's another ACORN filled out registration form. It's for Jimmy Johns, 10839 Broadway in Crown Point. Jimmy Johns. We decided to track him down. Here he is.
Is there anybody here that's actually named Jimmy Johns? Nobody registered to vote here named Jimmy Johns?
This could really -- I mean there's been no fraud yet because people haven't voted yet, right?
HOAGLAND: Correct. We'll find out on Election Day.
GRIFFIN: But it certainly sets up a potential.
HOAGLAND: The potential, I suppose, is always there, it's just that -- the volume. The volume is just incredible.
GRIFFIN (voice-over): The elections board is run by both Republicans and Democrats.
It is fraud, says the Democrat director Sally Lasota. SALLY LASOTA (D), LAKE COUNTRY ELECTION BOARD: Well, if you look, it's the same signature for all three voters. It's -- so the one individual tried to -- did three separate applications but put -- you know you can tell the signature, we're not handwriting experts, but what's obvious is obvious.
GRIFFIN: ACORN's voter registration drives are under investigation or suspicion in several states. Just yesterday, local authorities raided this ACORN office in Las Vegas where ACORN workers allegedly registered members of the Dallas Cowboys football team.
Over the last four years, a dozen states investigated complaints of fraudulent registrations filed by ACORN and complaints of fraud by ACORN have exploded nationwide in just the last few weeks.
We tried to contact the ACORN director in Gary, Indiana, but when the phone messages went unanswered, we went to the office. It's abandoned. ACORN told us the state director for Indiana ACORN is actually based in this office in Milwaukee. But today we found it empty, too.
ACORN's attorney in Boston told us allegations his organization has committed fraud is a government attempt to keep the disenfranchised from voting.
BRIAN MELLOR, SENIOR COUNSEL, PROJECT VOTE: We believe their purpose is to attack ACORN and -- and suppress votes. We think that by attacking ACORN that they are going to discourage people who may have registered with ACORN from voting.
GRIFFIN: Brian Mellor says ACORN has its own quality control, has fired workers in the past, including workers in Gary.
Despite its past, the Obama campaign gave $800,000 to ACORN to help fund its primary registration drive, and ACORN has endorsed Barack Obama for president.
The Obama campaign reacted this afternoon saying, it is committed to protecting the integrity of the voting process, and said it has not work the with ACORN during the general election.
(END VIDEOTAPE)
GRIFFIN: And, Betty, you know, they went through 2100 of these. Every one of them was bad. I just want to point out, the 2900 other ones still haven't been looked at. They are going to look at them before the election to determine if there is even one single legitimate voter registration card filled out and a voter there would then get the right to vote.
But so far, a very, very bad showing there from the ACORN voter registration stack in Lake County, Indiana.
NGUYEN: No doubt. And we're talking about thousands here. Is there going to be some kind of criminal investigation? GRIFFIN: Yes, it -- we don't know if there'll be a criminal investigation yet. What the elections board will do is recommend this or recommend that the county attorney look into this.
Clearly the ladies in that office say this is fraud. It is very, very difficult to determine who filled these -- who exactly filled these out and committed that fraud. But it will be up to the county attorney to decide if they go forward.
NGUYEN: We've got three weeks until the election. A lot needs to be done. All right, Drew Griffin, amazing report there. Do thank you for that.
We're also keeping an eye on this person right here -- well, not really a person, but a hurricane by the name of Norbert. The category 1 hurricane is making a bee line from the Mexico's Baja California peninsula. Expected landfall? About 15 hours from now.
Rob Marciano has been watching Norbert and all the other weather happenings around the nation today. What are you seeing, Rob?
(WEATHER REPORT)
NGUYEN: Looks like a beautiful day down there.
ROB MARCIANO, AMS METEOROLOGIST: Yes, gorgeous stuff.
NGUYEN: Not a bad place to go for the weekend.
MARCIANO: Yes.
NGUYEN: OK, thank you, Rob.
MARCIANO: See you, Betty.
NGUYEN: You know, the calendar does say fall but it sure does look like winter in parts of the Pacific Northwest. Check out Stevens Pass. There's enough for an old-fashioned snowball fight at this year near Seattle, Washington, and between 4 and 6 inches fell Wednesday. More yesterday in Oregon, though, making for some slick roads on the way to Mt. Hood.
We're staying on top of all that for you.
So looking at the money, the bottom line here, well, we're looking for a bottom and a bounce back. Wall Street opens in just a few minutes and we are watching it for you, don't go anywhere.
(COMMERCIAL BREAK)
NGUYEN: Well, the big news that's developing today, right there, the stock market. We are waiting for it to open in about seven minutes from now. The futures, though, already down 400 points today. So we'll see how it does at the opening bell and bring that to you.
In the meantime, though, the Dalai Lama recovering from gallstone surgery. The 73-year-old exiled Tibetan spiritual leader had the procedure earlier today at a New Delhi hospital. A spokesman for the Dalai Lama says the operation was a success. He was hospitalized in August for abdominal discomfort.
Martti Ahtisaari is described as -- quoting here -- an outstanding international mediator and for his achievement, he is the newest Nobel Peace Prize winner.
Ahtisaari is the former president of Finland. The Nobel committee cited him for his role in establishing independence for the African nation of Namibia. Ahtisaari is also honored to resolve other conflicts, including Kosovo, Northern Ireland, Central Asia and Iraq.
Well, the stock markets go south, and President Bush is calling on some of the world's key finance chief. He's invited those from the G7 to the White House tomorrow. Yes, he is working over the weekend for this one, folks.
He wants to hear how Britain, Italy, Germany, France, Canada and Japan are being affected by this financial crisis, and what they can do to fix it. The ministers are in Washington for the annual meetings of the International Monetary Fund and the World Bank.
President Bush taking to the airwaves this morning to reassure Americans the government is aggressively working to stabilize the financial markets. He's scheduled to make a statement in the Rose Garden one hour from now at 10:25 Eastern, and we, of course, will bring that to you live.
Making their mark, time to recognize the newsmaker of the week. And on this Friday, it's a fairly easy choice, shall we say. The U.S. stock market, of course, in its seven-day string of record losses. We're waiting for today's opening bell.
So here to set the stage, CNN's Christine Romans and Ali Velshi. They join us from New York.
And Christine, we've been looking at the numbers, not so good, even for the futures. Looks like they're down at 400 already.
ROMANS: Yes. The futures -- Dow futures are pointing to another steep loss here at the open. It's becoming self-fulfilling at this point. You had Asian market weakness, and then U.S. market weakness yesterday, and the Dow fell off a cliff yesterday afternoon, you know, some 300 points, I think, in a half hour closing.
As you can see there, that's yesterday's close at 8579, now waiting for that to open. But -- but then last night you had the same thing happen again. Big losses in Asia, big losses in Europe and feeding into some more fear this morning.
I mean there is a lack of confidence and an abundance of fear, and that's what's driving this whole thing. And we have seen the Dow down more than 17 percent just this week. That's just dirty socks, but that reflects kind of what's happening overall in the market. That's 17 percent in one week, $2.3 trillion of stock market wealth evaporates. Over the year, 30-plus percent losses just this year for the Dow, the NASDAQ, and the S&P 500. It is an ugly, ugly bear market that we're in.
Now everyone's trying to figure out where we go from here. What will be the news trigger to turn anything around or to at least stop the losses, and so far we just haven't really seen that.
Again, we're all looking back to '87 for some guidance, we're looking back to the '70s for some guidance. You have veterans in this market who are scratching their heads and trying to figure out what they can compare this to. And many of them are saying they can't really compare it to anything. They've never seen something quite like it because it is the backbone of the system, the banking system, that seems to be the problem here.
The credit market is frozen, and so much of our economy and so much of our day to day life depends on credit to grow and to just do daily business.
Now, Ali, we know that policymakers have thrown everything at this problem.
VELSHI: Yes.
ROMANS: And still stock markets continue to go down.
VELSHI: Well, as you pointed out the other day, they've probably have things to throw at it that we haven't seen yet, things that they're coming along and inventing. But let's talk about what they've done so far.
First of all, we had that $700 billion bailout package. We know full well that the first effective -- that the first sales that are made from that won't take place for several weeks.
We have the short-term loans that the Federal Reserve has decided it will make to companies who have trouble raising money in private debt markets. That was announced Monday. That will be at least next week before that kicks in.
And then on Tuesday we saw those coordinated interest rate cuts around the world. And while those are meant to have an immediate effect by instilling confidence that money will get easier to borrow, the bottom line is money -- the problem with money wasn't that it was too expensive, it's that it is hard to get.
People aren't lending each other money. And as you and I know, Christine, some Fed rate increases or cuts often take between 9 and 14 months to work themselves into the system.
And then we had the latest news yesterday afternoon that the treasury is considering buying stakes in U.S. banks, troubled banks. What they would do is give the money. But instead of it being a loan, they would actually get stock in return so that if those banks were to actually profit from the fact that they got more money, if they were able to stabilize, the taxpayer would actually get some money back on that, or at least the government would. And ostensibly that would benefit the taxpayer.
So there are four things that they have done so far, and they're clearly continuing to consider other things, but there are market forces working against all of this right now. There are some people say that this market has to go down to where it has to go, some people place that in the 8,000 to 8,500 range.
On the Dow we're at 8579 and some people say that it's even lower than that. But at some point, the stocks that make up the stock markets, the companies that make up the stock markets are actually of some value and it's worth investing in those companies, because at some point they will have some return.
Now the problem is you can't value -- Christine, you can't value those financial companies...
ROMANS: Right.
VELSHI: ... because you don't know what's going on there. But there are other companies you can value. We're about 30 seconds away from this bell. We are looking at futures that are lower point than -- I don't know if I remember these kind of numbers, Christine, of 400 points...
ROMANS: I -- I don't either. And you know-- and I have to tell you, too, that one thing -- this is the stock market and everyone's fixated on it, but we have to remember that the economy, no matter what happens today in the stock market, is going to continue to have job losses, maybe more bank failures.
A lot of people are saying that there could be some more small bank failures, you're going to see more job losses, anything related to the consumer is something -- the consumer has retrenched. So people out there who don't even have exposure to the stock market are going to feel this economy, Ali. They're going to feel it and feel how tough this has been.
VELSHI: And we're off. That's the beginning of the opening bell, in two seconds, trading actually begins on the Dow. And again, I want to emphasize something Christine and I have been saying, many professionals say that we are headed toward a bottom. And the bottom is not a one-day event.
It doesn't go up all of a sudden because you hit it. What it means, though, is that much of the panic selling and that the -- the forceful selling could end, and you could start to see us bumping along a bottom and that could be several months long before the market starts to head up.
Sometimes it heads up in little spits and starts. What is important to remember, though, is that, at some point, if you are in that market, when it is at that bottom and it starts to go up, it's very hard to time the day that you want to be in there, which is why so many people are encouraged, after staying in the markets for this long, to actually stay with them.
Susan Lisovicz is there at the New York Stock Exchange watching this as it happens and we'll have her there in a second.
Susan, are you with us?
SUSAN LISOVICZ, CNN CORRESPONDENT: I'm with you, Ali, and, you know, it's really basically a continuation of what we saw yesterday. There was feverish, even panic selling at the last hour of trading. And sometimes that can be a good thing to flush out all the fear and to establish a bottom.
We're going to be looking at the breadth of the selling. Right now we're seeing 133-point decline. You know, frankly, that seems relatively mild for what we've seen, after all, we're coming off the worst seven-day streak for the Dow Industrials since they were -- their inception in the late 1800s.
You know, what traders are telling me is to watch the volume. They're expecting it to be big. And if it's big, that can, in fact, establish a capitulation, at least a temporary bottom. Also the breadth of the market is everything going down uniformly, not only financial stocks. Financial stocks got hit particularly hard yesterday.
That was also the first day when the temporary ban on short- selling financial stocks were lifted. We are looking to hear from the G7. We've already heard from Congress. We've heard from the Treasury Department. We've heard from the Federal Reserve.
And we're expecting comments from G7 -- the G7 leaders at least sometime this weekend as to what they might propose, even new efforts to ease the paralysis we're seeing in the credit markets.
What traders are saying is, they're not seeing any easing up in the credit markets. And what you're seeing in the meantime is not only concern about access to credit, but companies' solvency. And a case in point yesterday was General Motors.
GM shares yesterday falling to lows that we have not seen since the early 1950s. Stocks closed yesterday under $5 a share. GM coming out today and saying, it's OK. It's got adequate access to capital, but those are the kind of concerns, fears and even panic that have prompted Russia's stock exchange to fall.
It's the worst week in history for the Tokyo Stock Exchange.
ROMANS: Right.
LISOVICZ: And sometimes with that kind of panic, it can end -- it can at least stop the kind of indiscriminate selling that we have seen, and at least some episodes over the past week.
ROMANS: One thing that, I think, is interesting, you guys, is that this has been body blow after body blow for the stock market. I mean -- and when we think that, you know, we've taken it and then there's some big government announcement about something they're going to do to try to fix the mess, then stocks kind of limp along and fall again.
It has been a slow bleed over the past year. You know, the chart of the Dow, and the S&P and the NASDAQ has been just a slow bleed lower until it really -- got exacerbated in the last couple of weeks.
That's different than what we saw in 1987. That's different than what we saw, I think, in 1982. When you go back and you look at some of the other charts, this bear market of '07, '08 has been just kind of a brutal, persistent bear, hasn't it?
LISOVICZ: Oh it's -- well, I mean, it's -- for the Dow, it's one of the -- the worst since the '70s, no question about it. But, I mean, these things are cyclical, and as Ali has pointed out quite astutely, I mean, the stock market is a forward-looking mechanism.
We know there's going ton pain. We know that the overall economy has held up pretty darn well despite a terrible housing recession. And this credit market, this credit seizure is going to just add more fuel to the fire. So the stock market is already factoring in, shall we say, a deeper and more painful recession than, I think...
VELSHI: Susan...
LISOVICZ: ... what a lot of folks had anticipated.
VELSHI: You were talking to -- you've been talking to traders. We're now looking at a drop of, what, 440, 450 points already now within four minutes of the opening of the market. The futures were pointing to around this neighborhood, so let's see where it goes from here.
But there was some discussion that what this capitulation, what this forceful move toward a bottom would look like is a very, very heavy selloff early in the day with lots of volume behind it. We, obviously, is very early in the day to be talking about a loss of volume.
LISOVICZ: And they're looking -- and Ali, they're looking at levels for support. That is, we want to watch 8,000 for the Dow and 7400. And I know that is a breathtaking fall in one week. Remember we went below 10,000 just on Monday, but that's the kind of levels that we're looking at for support.
That is -- that's where you might see the bounce. Right now, the selloff clearly is accelerating.
ROMANS: But there's just no confidence, you know?
(CROSSTALK)
NGUYEN: But there's no panic, (INAUDIBLE), guys, we're awfully close, and we're looking at -- you know, as you said, Ali, just about, what, five minutes into trading, we're down 479 points.
So...
VELSHI: Again, to just reiterate the part that we're all sort of saying, when we talk about support levels, we talk about capitulation, what we're talking about for those of you who have lost 40 percent in your 401(k)'s in the last year, is we're talking about -- now we're across 500 points now within five minutes of the Dow being open.
What we're talking about here is a place where investors start to move in and say that the underlying stocks in these markets are worth something. They're worth buying, they may be long-term investments, but they still make money.
So that's -- when we talk about support, there are a lot of people who think, they look at these numbers at this hour and they say, OK, what's happening is supposed to happen. This market is bottoming out. It's getting there. We are now 50 point away from that support level that you just talked about, Susan.
ROMANS: Hey, guys, you know -- I want to jump in. When so many people are talking about a bottom in the market, though, I get suspicious, because this has been a painful move down, and whenever there's a consensus, you need to take a look and wonder, you know, we don't know if the market's going to bottom here, because there's a real fundamental problem...
NGUYEN: There we are, below 8000 right now.
ROMANS: ... in the banking system and that makes it a little bit different, you know. It makes it a little bit different this time because the banking system is hurting.
LISOVICZ: And I just want to throw one thing. This is a Friday, and -- to say that the market is cautious going into the weekend would be a -- extreme understatement.
But the other thing is Monday is Columbus Day. And while the stock markets are open, the bond market is not on Monday. And so -- that's why some folks are not saying that today may be the day for the bottom, because I think that you're going to be extremely -- a lot of folks are saying no one wants to go long into the weekend, this particular weekend.
NGUYEN: Especially when you see numbers like that right out of the gate, just seven minutes into trading and we're looking at that time below 8000.
All right, Ali, Christine, Susan, we do appreciate your insight. In fact, we're going to stay with you as we look at these numbers, because, Ali, as you mentioned earlier, they were talking of somewhere around 8,000 for that to be the beginning of the bottom.
And as I mentioned, boy, what, a minute or so ago, we already reached that mark and we're below it now.
VELSHI: Yes. This is -- I mean we're now closing in -- Susan said the next support level tends to be 7400. We are now seven -- and few minutes into trading we're down 700 points. Remember that the biggest point drop we've had so far is 777 points. That was not this past Monday but the one before that.
On a percentage level, though, I want to tell you that we are looking at a loss on the market today of 7.3 percent on the Dow and the S&P 500. This is, of course, what is concerning most of our viewers, because that's their retirement money that's in there.
So we are all now very interested in what that bottom may be. Christine's point is that there's no science to this. We don't actual know. I should also introduce the discussion that there are mechanisms to stop trading if it were to drop more than 1100 points at some point in the day.
It would stop trading just to sort of slow the thing down, and then, of course, there are bigger triggers, there are callers at bigger points. But just look next to the 547. The good news, by the way, is that now we're pulling back those losses.
We haven't continued to go down further and further. But look next to it, where it says VOLU, and it says, underneath that, UVOL and DVOL. The volume is the trading volume. That's the number of shares that been traded today.
We probably will end up with over 2 billion shares traded today, so we're at about 189 million. But if you look at that, 176 million of the 190 million are being traded on the downside. That means traded at a lower price than the last trade. Only 11 million have been bought at a higher price than the previous trade.
So that just keeps on giving you an indication that people are selling out of this market. But look at that number, it didn't go down to seven, it's starting to pull back. That, at least, gives you an indication that there are still people in this market interested in buying some stocks.
ROMANS: The big question is what turns the -- the psychology around in this market. I mean we haven't seen the psychology turn around even after we had a $700 billion bailout package, which was -- was that a week ago today? I tell you, it feels like a lifetime.
NGUYEN: Doesn't it, though?
ROMANS: But in that week since that bill was signed, and, you know, the administration and so many people in Congress, all those House members who have changed their mind and said they hated the bill but they knew now they had been told that they had to do it, you know, that the alternative was worse.
Well, since then, the Dow is down 17-plus percent, now, I guess, 20 percent if you count in these losses here today. There are two ways to look at that. What would the world look like if they hadn't done it? And maybe, maybe it didn't -- it's irrelevant now.
Maybe market -- the market realities have overtaken what -- what policymakers have done. I know Allan Chernoff's been following this, too.
NGUYEN: Yes. That's an interesting thought, too. And we do want to bring that to our Allan Chernoff who joins us now from Wall Street.
What are you hearing down there as we look at the numbers fall?
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Let me just put things in perspective a little bit. First of all, I'm outside of the New York Stock Exchange.
Good news, the building is still standing. The critical issue here is how many investors are really still standing? How many investors are willing to say, you know what? The economy is not going into a depression now, because, frankly, that's what's going on inside of the New York Stock Exchange.
What we're seeing now is complete panic selling. People saying, just get me out. Get me out at any price. This economy is just sinking and sinking fast.
Well, are we going into a depression? If you don't believe we're going into a depression, then this really could be, at some point pretty soon, a very, very good opportunity to step in.
The problem for the stock market is that a lot of people, in fact, do think that we may be headed into the deepest depression we've seen since the 1930s.
Let's have a listen to just a couple of people we spoke to a few minutes ago.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm worried about losing my home, maintaining my job. So that's where my concerns are. You know, that's -- I never know what's going to happen every day. It could be, you know, another unemployed individual. That's -- it's very scary times.
UNIDENTIFIED MALE: If I was in a car accident right now and you walk over to me and you ask me what kind of mood am I in, what do you think I would say? It's pretty tough out there.
CHERNOFF: That's the analogy, huh?
UNIDENTIFIED MALE: It is pretty tough out there. It will get better.
(END VIDEO CLIP)
CHERNOFF: And indeed, that's what this market needs. It needs investors who believe that, at some point, it is going to get better. A cabbie this morning told me we need heroes. Heroes are going to be investors who step up to the plate and start buying en masse at some point, at some point -- nobody knows exactly when. At some point that's going to happen, and we'll have an incredible rally up. But it won't mean that this bear market is over by any means.
NGUYEN: Yes, but when that does happen, boy, what a rally, Ali, because there's a lot of money sitting on the side lines...
CHERNOFF: Yes.
NGUYEN: ... and we're seeing a lot of it going in and out already today, because we jumped down to, what, 600 below, and now we're at 300. So within...
VELSHI: Right.
NGUYEN: ... you know, just the past few minutes, things could change immediately.
VELSHI: And that's exactly the point, Betty. Let's say you got in at 600 below. Let's say you believe that 8,000 was the level that you were going to invest in. So you've got in at 8,000. You've already made money.
The rally doesn't look as obvious when it starts coming up. And we hit a bottom, you -- like I said, this could be a few days, it could be a few weeks, it could actually be months where you stay within a trading range of 500 points for a few months, then you start to go up.
But if you miss some of those best trading days because you were waiting for it because you're waiting for the press release that said, oh, the market has officially hit a bottom, and the rally has begun, you -- could actually lose many of your gains.
Now to Allan's point, you've got -- you'd be a hero to invest in this market. For all of you who are looking at your 401(k)'s and you've lost 40 percent in the last 12 months, you're kind of heroes, you've kind of done it. You've kind of suffered the loss.
ROMANS: Yes.
VELSHI: You've got the nerves of steel. At this point this might be the last few periods of the last quarter of the game. You've -- you know you got to make that decision for yourself. But there are a lot of people who say, there's an intrinsic value to the companies represent it. Stop thinking of them as markets.
They're companies on there...
NGUYEN: That are good companies.
VELSHI: ... many of them have intrinsic values.
NGUYEN: Yes.
VELSHI: Many of them are banks. NGUYEN: The stocks may be down, but they're good companies.
ROMANS: Yes.
NGUYEN: Exactly.
VELSHI: Right. So...
NGUYEN: Christine, I see you want to jump in. We just have a little bit of time. Go ahead, quickly.
ROMANS: Betty, there's half of the people are not invested in the stock market. And so for them the intrinsic value of these companies is important only because of their job, and because of what it means for their neighbors and what it means for the economy in general.
So let's remember here that we still have an economy that is -- that is on the ropes, to be quite honest, and even if we can get the stock market turned around, which is important, it is a symptom. It is a sign of what's happening everywhere else.
So there are a lot of people who might be wondering, why is this what's happening with stock market matter to me? Well, it matters because we're trying to -- you know, we're trying to gauge just what kind of health we're going to have in the overall economy and it's not good for people when the stock market is ailing and the companies are ailing and when you can't get credit, you can't get loans.
So for the half of America who are not invested in the stock market, this is still -- this is still a white knuckle kind of time.
NGUYEN: Yes, it matters for everybody. So the Dow, so far, down 231 points, what -- that is a lot better than it was just a few minutes ago. We have our eye on Wall Street. We have all of our experts here at CNN, so don't go anywhere.
(COMMERCIAL BREAK)
NGUYEN: All right, take a look at the big board today, down 253 points. Yesterday, as we know, the Dow fell to a five-year low. Hopefully, as some people can make some gains today, but we'll see how the Friday plays out.
Again, down 257 points at this hour. We'll stay on top of that for you.
In politics, Barack Obama is holding on to a four-point lead in the battleground state of Ohio, well, according to CNN's latest polling. And today he is campaigning in a long-time bellwether city of Chillicothe.
Well, CNN's Suzanne Malveaux is following the campaign. She joins us now live from central Ohio.
So what's the focus today, Suzanne? SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Betty.
Obama is here in Chillicothe because this is really a bellwether town, how people vote here is a pretty good indication of how people are going to vote in Ohio.
And the last couple of rounds presidential elections, they went for President Bush. So he has his work cut out for him, obviously, but he does feel like he could make some inroads here among social conservatives, as well as independents.
And the reason why, it is because he is focusing on the economy.
(BEGIN VIDEOTAPE)
MALVEAUX (voice over): Barack Obama in overdrive. Kicking off his five-city Ohio tour, kissing babies and keeping on message.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Well, I've got news for John McCain. This isn't about losing a campaign, this is about Americans here in Dayton, who are losing their jobs and losing their homes and losing their life savings.
MALVEAUX: The economy is center stage in the make-or-break state of Ohio where unemployment is 7.4 percent, the six highest in the nation.
Dayton's mayor says 33,000 have lost jobs in her area over the last seven years. Obama promised if he was president, he'd put them back to work.
OBAMA: To create 5 million new green jobs over the next decade.
MALVEAUX: No Republican has won the White House without winning Ohio. So Obama is here to make sure he holds on to his slight lead. He believes focusing on the economy will get him to the finish.
Obama slammed McCain's latest proposal for the government to buy bad mortgages back at full value, saying it would end up costing taxpayers billions and reward lenders' bad behavior.
OBAMA: Taxpayers shouldn't be asked to pick up the tab for the very folks that helped create this crisis.
MALVEAUX: The campaign released a new ad on cable TV to emphasize the point.
(BEGIN VIDEO CLIP, CAMPAIGN COMMERCIAL)
UNIDENTIFIED MALE: Putting bad actors ahead of taxpayers, we can't afford more of the same.
(END VIDEO CLIP)
MALVEAUX: McCain defended his plan as a costly but necessary fix. OBAMA: Don't be hoodwinked by his ads. Don't fall for the okidoke(ph).
MALVEAUX: But Obama is increasingly portraying McCain as deceptive, out of touch and out of control.
OBAMA: It's called the old bait and switch. What he gives with one hand he'll take away with another. He thinks we won't notice. Well, I've got news for John McCain, we do notice, we know better, we're not going to let him get away with it.
(END VIDEOTAPE)
MALVEAUX: Betty, a lot of people, obviously, here paying very close attention to what these candidates are saying. The unemployment rate in Ross County is 8.6 percent. So a lot of people looking at Barack Obama.
We've also seen John McCain, Michelle Obama in this particular town talking about this very issue.
To let you know, too, the tone of these rallies has dramatically changed. It has really taken on a very serious tone. Barack Obama going after John McCain on his honesty as to whether or not he is really going to be able to help the American people -- Betty?
NGUYEN: All right, CNN's Suzanne Malveaux joining us live today. Thank you for that, Suzanne.
And, of course, as you look at the bottom of the screen there, to the left-hand side -- or your right-hand side, the market is down 261 points. But that's a lot of a gain on what it originally started out as soon as these things really went straight out of the gate today.
We saw a drop of some 600 points, now up to a negative 272. We'll keep our eye on it and bring you the latest.
(COMMERCIAL BREAK)
NGUYEN: Taking a look at the big board. The Dow at a negative 212, but it has made some gains this morning already after the open. It did dip down below the 8,000 mark. But look at this, down 189. We'll see where it goes throughout the day.
We're also watching a lot of different things including that right there, the White House. The president is going to be speaking in the Rose Garden at 10:25 a.m. Eastern Time today.
He's going to be talking about the economy and trying to really bring some calm to the markets. We'll see if it works. Again, when that happens, we'll bring that to you live.
In the meantime, though, we are waiting, as you see there live, for Senator Barack Obama to take to the microphone. He is speaking in Chillicothe today where his focus is on jobs in Ohio, job creation in that state. So we will listen to that as well. But no doubt we are watching many different things today, including the markets, staying on top of that every step of the way. We'll have much more to come.
(COMMERCIAL BREAK)
NGUYEN: Taking a look at your money today. I want to give you a look at the big board. The Dow down 223 points at 8,355, though that is a comeback from earlier losses.
As soon as the bell rang, we saw within minutes the Dow dropped below 8,000. So it is coming back a little bit today. We'll be watching that closely.
And speaking of the economy, President Bush -- he's going to be taking to the airwaves this morning to reassure Americans that the government is aggressively working to stabilize the financial markets.
You see a picture there of the White House, a live look. Well, he's scheduled to make a statement in the Rose Garden at 10:25 Eastern today. And when that happens, we're going to bring that to you live.
All right. So amid all of this bleak economic news, are you looking for a little bit of a silver lining in all the economic gloom? Well, how about gas prices? Have you checked them lately? Because they are tumbling.
AAA says you are now paying an average of $3.35 for a gallon of regular. That is five cents better than yesterday and down 31 cents a gallon in the past month.
Some analysts are predicting gas will drop below $3.00 a gallon by Thanksgiving while oil prices could be headed toward $80 a barrel.
The mother of a missing Florida girl wants prosecutors to share all the evidence they have, even if it implicates her in her daughter's disappearance. Attorneys for Casey Anthony are heading back to court today to try to force the state to turn over their client's car and other evidence so they can conduct tests on their own.
3-year-old Caylee disappeared in June but she wasn't reported missing until July. Police are calling the mother a suspect. But so far she's only been charged with making false statements and child neglect.
Looking at the big board. 247 points down. So you're asking maybe, how low can it go? Well, investors getting pounded on Wall Street this morning. Our money team with perspective on the panic, plus advice on what you should do.
Meanwhile, reassurance in a crisis. Live this hour, President Bush speaks. Will it have a positive effect?
It is Friday, October 10th. Heidi is off today. I'm Betty Nguyen. You're in the CNN NEWSROOM.
