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American Morning

Retail Sales, Dow Look To End Year Down

Aired December 26, 2001 - 08:39   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.
MILES O'BRIEN, CNN ANCHOR: Hi, let's check business news. It's the time of year when we sort of look back on the year that unfolded before us.

Kind of an ugly year on Wall Street. Jennifer Westhoven is at the New York Stock Exchange today. Kind of a quiet week on Wall Street.

I suppose, Jennifer, people will be watching those retail numbers very closely today.

JENNIFER WESTHOVEN, CNN FINANCIAL CORRESPONDENT: That is exactly right, Miles. And there's a lot of concern about those retail numbers.

I mean, already, analysts were looking for a pretty lackluster holiday season, but they were expecting most of the sales to come in a big bang in that big weekend right before Christmas, and the early reports don't necessarily look good.

There's been a lot of concern that mall traffic was just not what it was supposed to be, and that sales had been down.

Now, the big thing for consumers, then, becomes, you might see lots of very heavy discounting now, as the retailers try to get all that winter stuff off the shelves and get spring things.

Now, that sounds good for consumers, but it can be really bad, as you can imagine, for those retailers, because they'll be making even less money than they were already expected to.

And in fact, though, we do have one sort of bit of good news, which is that Wal-Mart, which previously said they were a little bit worried about their December sales, now says that sales should come in at the upper end of their forecast.

O'BRIEN: Well, that's good news. And it ...

WESTHOVEN: That's good news.

O'BRIEN: ... when Wal-Mart speaks, the rest of the retail world sort of listens, and so with Wall Street.

That would be a bit of a surprise, wouldn't it. WESTHOVEN: It would be a bit of a surprise. Wal-Mart, you know, is the number one retailer in the entire world. They have huge amounts of sales, but even if that helps Wal-Mart today, it really isn't expected out -- to help out the major markets so much.

At this point, you know, we are looking at the Dow. It's down nearly seven percent for the year. And if you wanted to think about getting back into the black, it would take a 750 point rally in the next couple of days for the Dow to close the year unchanged. So, looks like it'll close down.

NASDAQ is down more than 20 percent for the year. S&P down, too, so that's the second year, now, that we've had losses in the stock market.

And you know, we had four or five years of such strong gains, that it really has come as a shock to many investors.

O'BRIEN: Yeah, we're just not used to that. Jennifer, I wonder if people are concerned that there'll be a lot of people selling off before the yearend to sort of lick their wounds, take their losses and get it under their belt for 2001?

WESTHOVEN: Well, you know, you do see tax selling sometimes, so that's a concern.

But, also, this tends to be a seasonally strong time of year for the market, so we'll see. There's a lot of talk about something called the January effect. And some people say maybe that'll come in December.

Essentially what it means is, you have a lot of strategists thinking that, in these last four days, they don't expect too much volatility, and they think that the bias should be to the upside, if you're thinking technically speaking, and you're able to ignore any bad news that comes.

O'BRIEN: Sort of an eggnog rally, or something, maybe. All right.

Jennifer Westhoven, thank you very much. And stay away from that eggnog today, all right? All right.

WESTHOVEN: You got it.

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