ALEX CHADWICK, host:
From NPR News, it's DAY TO DAY.
We mentioned at the top of the show, investors on Wall Street seem to be coming back today after yesterday's big fall, or even managing to shake off other discouraging economic news. For instance, the economy grew at a lower-than-expected rate in the last months of last year. And last month's - January that is - new home sales had their biggest drop in 13 years.
We're joined by MARKETPLACE senior business correspondent Bob Moon. Bob, how are investors managing their confidence today?
BOB MOON: Well, the simple explanation might be that yesterday's sudden drop in share prices pretty much across the board has created what market analysts like to call a buying opportunity. It tends to bring out investors to pick through the ruins, looking for bargains.
What seems to be happening today is this decision by investors that sellers got a little carried away with things so the buyers have lifted all the major indexes today. The Dow, the NASDAQ, the S&P 500 were all up around half a percent in early trading today, and that wasn't a big surprise. The sell-off continued somewhat overseas, but you could watch things stabilize abroad. European markets remain fairly weak, along with many of the Asian markets.
But you'll remember that all this started with a big plunge of around 9 percent on the stock market in Shanghai. Well, Chinese stocks rebounded by around 4 percent, and that kind of set the tone.
CHADWICK: What about when people start really digesting this news about economic performance in the last quarter of 2006, and maybe these housing sales figures?
MOON: Yeah, you're right. Any other day, we might well have expected this economic news to drive the markets lower. But again, that probably reflects investor sentiment that things went too far yesterday, even when you factor in today's bad economic reports.
As you mentioned, the country's economic growth in the final three months of last year wasn't as strong as government statisticians originally thought. Commerce Department now figures that economic growth was actually pretty sluggish - an upward pace of around 2.2 percent.
And those new home sales figures that you mentioned, that could be a harbinger of further weakness in the real estate market, which has been such a drag on the economy over the past year. But today, stock market investors don't seem to be overly concerned. If you can you figure all this out, Alex, I guess you're a better analyst than I am, or maybe you just have more of those other hands than I do.
CHADWICK: Well, no. I'm certainly not. But I do wonder kind of where things go from here with these signals. The U.S. markets, I think, yesterday, down maybe three percent in value. So you've got a way to go to recover just that.
MOON: Yeah. And investors need to be mindful of what's been happening over the past couple of days - alert to that. On the other hand, and - sorry about all these other hands - but economic authorities out there seem to be doing their best to talk the markets up today. Federal Reserve Chairman Ben Bernanke has been testifying on Capitol Hill, and he says the administration's watching things closely, and federal regulators. But he says so far, the markets appear to be working well.
CHADWICK: All right, thank you, Bob. Bob Moon of Public Radio's daily business show, MARKETPLACE, from American Public Media.
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