Stocks Slide On Gloomy News
MICHELE NORRIS, host:
The stock market took another beating today. The Dow Industrials lost about 440 points, just under five percent of its value. Add that to yesterday's similar loss and you get the Dow's worst two-day performance since 1987. Recent gains have been wiped out, and the market is back near its low for the year. NPR's Jim Zarroli is watching the markets, as always. He joins me now. Jim, what was it today? Why are the prices falling right now?
JIM ZARROLI: Well, they're falling because we've been hearing a lot more news about how sour the economy is right now. I mean, the bad news just doesn't stop. We heard today about retail sales. Wal-Mart had a good quarter last quarter, but a lot of other companies did not. Whether you're talking about Internet retailers like Amazon or traditional department store chains like Neiman Marcus, I mean, we've just seen a lot of big declines. And this is just as the holiday season is approaching, so it's really the worst possible time for this to happen.
NORRIS: Now, you just ticked through a number of companies in the retail sector. What about companies outside the retail sector? Are they seeing similar declines?
ZARROLI: Yeah. A lot of them are. We had a pretty weak earnings report from News Corporation, which owns Fox News. Yesterday, we had an earnings report from Cisco Systems which makes computer networking equipment. Now, as recently as August, Cisco was saying that its revenues were going to keep growing. Yesterday, it came out and said, no, basically our earnings were flat last quarter. Cisco is one of those companies that's considered a bellwether in the tech sector. So, that drove a lot of technology companies down today. Also, the big private equity company Blackstone which went public 18 months ago with this big splashy public offering, you might remember, it lost more than half a billion dollars last quarter. So lot's of bad news all around.
NORRIS: And Jim, what about the big news event this week? Is there any evidence that Tuesday's election may have had an effect on the market in any way?
ZARROLI: Well, I saw some people argue that they say, you know, investors are worried that President-elect Obama will raise the capital gains tax, which affects people's investments. But the truth is it's been pretty apparent for weeks that the Democrats were going to do well. The markets had already factored that in. So I think this is basically about nervousness about where the economy is going.
NORRIS: We're going to see some numbers at the end of the week. Tomorrow the Labor Department releases its October unemployment report. What are we expected to see in that report?
ZARROLI: Well, we expect a pretty weak report again. It's probably going to show that the labor market declined a lot more last month. Economists on average - economists who've been surveyed have said that the economy probably lost about 200,000 more jobs during the month. The labor market has basically been shrinking all year. And most economists say it's not going to turn around anytime soon, perhaps not until the middle of next year, even later maybe. So we're really starting to see the impact of all these, you know, combined forces like the drop in house prices and the credit crunch. And it's not a pretty picture.
NORRIS: Thank you, Jim.
ZARROLI: You're welcome.
NORRIS: That was NPR's Jim Zarroli speaking to us from New York.
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