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American Morning

Ask CNN: Why Are The Stocks Always Going Down

Aired September 07, 2001 - 09:50   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.
(BEGIN ASK CNN)

MARTIN KEYAHAS, YONKERS, NEW YORK: My name is Martin Keyahas, and I'm from Yonkers, New York. I'd like to ask CNN why the stocks are always going down.

ANNA BERNASEK, WRITER, FORTUNE MAGAZINE: That's the big question on everyone's mind at the moment, and you're going to hear hundreds of different answers. But really, the thing to keep in mind is really going back to the basics.

The two key factors that are driving a stock price are, firstly, an expectation about a company's success; and secondly, how many buyers and sellers there are in a market at a specific time.

So going back to the boom, what happened was we had huge and increasing expectations about companies' success, and at the same time, we had a lot of new people entering the market, wanting to buy stock. So those two factors led to a powerful force of pushing stock prices higher.

Now, what we saw when the economy started to turn down was that expectations started to drop, and the number of people in the market also dropped.

(END VIDEOTAPE)

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