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CNN Live At Daybreak

Markets Coming Off of Rally Today

Aired December 06, 2001 - 06:15   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.
CATHERINE CALLAWAY, CNN ANCHOR: Time now to get an update on business news going on this morning. Let's check in with Deborah Marchini for a look at what's ahead -- good morning.

DEBORAH MARCHINI, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Catherine.

We're looking at a pretty uneventful open today, judging from what the futures markets are doing, but you've got to put that in context. The markets are coming off a particularly powerful rally. Yesterday, we saw the bulls stampede on Wall Street, I guess you could say, for the second day in a row.

The Dow added 220 points to finish well above 10000. The Dow hasn't closed above 10000 since September 5. The Nasdaq, laced heavily with technology stocks, jumped more than 4 percent, closing above 2000 -- hasn't done that since August 7. Volume across the board was heavy, and what that's a sign of is that investors are buying decisively.

Technology stocks -- what a standout yesterday. You can see that in the big jump in the Nasdaq. Software maker, Oracle, in particular, helped to spark the rally. The company said its business had stabilized and would resume growing next year. The stock finished with a gain of 11 percent.

As for today, the markets' direction will be determined, in part, by some economic reports. At 8:30 this morning, Eastern Time, new claims for jobless benefits come out. It's expected that they'll fall by 19,000 to 469,000 in the latest week. Remember, though, that's still a pretty high level, indicative of no growth in the labor market.

The focus likely to be on the employment report that's due tomorrow. That will tell us what happened to the unemployment rate. It's widely expected to have jumped to about 5.6 percent in November from 5.4 percent in October.

Now, a weakened employment report would solidify hopes that the Federal Reserve is going to cut interest rates by another quarter percentage point, when it meets next week. The Fed has already cut rates 10 times this year. Its key rate is at 2 percent -- the lowest we've seen. The reports on November performance of chain store sales are expected throughout the day, and that will give us some additional hints about how retailers performed, and specifically about how consumers are feeling, given the rise we've seen in unemployment -- whether their holiday shopping is likely to pull things out for what was appearing to be an extremely bleak holiday season -- important to retailers' profits.

We also get factory orders. They're expected to jump around a lot. They come out at 10:00 o'clock, and they should be up.

That pretty well does it for business.

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