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Valley Public Radio Staff
Tue February 4, 2014
Behind The Ups And Downs On Wall Street
U.S. stocks opened slightly higher today after the Dow Jones plunged more than 320 points yesterday — the worst day in more than seven months. The S&P 500 also inched up at the open, after ending yesterday down nearly 6 percent from a recent high.
So what’s up with the ups and downs? Jason Bellini of the Wall Street Journal joins Here & Now’s Robin Young to discuss the drop and whether it will continue.
- Jason Bellini, video reporter and senior producer for the Wall Street Journal. He tweets @jasonbellini.
ROBIN YOUNG, HOST:
From NPR and WBUR Boston, I'm Robin Young. It's HERE AND NOW.
And U.S. stocks are bouncing back after the Down Jones' plunge more than 320 points yesterday. The worse day in more than seven months. The S&P 500 also open higher today after ending yesterday down, nearly six percent from a recent high. So what is up with the ups and downs? Jason Bellini of The Wall Street Journal joins us. And, Jason, in your opinion, first of all, how big a deal was that drop yesterday?
JASON BELLINI: How a big deal was it? Well, let's put some context on this. U.S. markets at a worse slump in more than six months on Monday. So we're pretty much back to where we were in mid-October. After that, we've got all those huge gains at the end of the year. Those are gone even after today, the slight rebound. This rebound coming after, you know, really getting - the market really getting clobbered at the end of January.
There were more contexts even. According to chief economists at JPMorgan Chase, the Dow dropped for the fourth time in - this is the fourth time in the past 20 years the - that it dropped more than five points. So it's been very significant, what's been going on in the markets.
YOUNG: Well, we know it doesn't travel in a straight line, that it goes up and down, and up and down. But yesterday, a huge drop. And we're hearing it might have been the gloomy report on manufacturing, factory orders up, China's slowing growth or the Fed tapering off its bond buying that was propping the economy. Weigh in. What else do you think should be on that list or off the list?
BELLINI: Well, I think you're correct. I think, generally speaking, analysts say that there are a lot of jiggers out there about the global growth. And we've seen what's happening in Japan where the Nikkei Stock Average fell 4.2 percent. It's now 14 percent lower than it was a year ago. And also, news from China that has been troubling to investors. Now, investors it seems are waiting to find out how the job data turns out after those really disappointing manufacturing numbers that you just mentioned. That was what really prompted that selloff on Monday.
YOUNG: Well - and tell us more about that. What is the mood right now? When do those numbers come out? Usually end of the week. So what's going on right now?
BELLINI: Well, I mean, what's going on is that, you know, the unemployment numbers have been going - going down very modestly. And the Federal Reserve keeps a very close eye on those, of course, to decide its policy. And the Federal Reserve is - says it taper back its stimulus into the economy. And for now - and there's also news that one of the Fed governor is saying that, you know, we're not going to raise interest rates. But, you know, the investors in general want to see how these - the surest sign to investors right now is how the unemployment figures pan out. And that could bolster stocks and correct some of what happened on Monday.
YOUNG: Well, Jason, while we have you, we have to ask you about a company whose stock did go up today. Microsoft announced its new CEO, Satya Nadella. And its shares rose about eight percent on that news. Why? What do we know about this guy?
BELLINI: Well, we know he's a company veteran. He's actually the third chief executive in the company's nearly 40 years in operation. One of the big activist investors that's been, you know, keeping an eye on the company and weighing in on things, Value and Capital, says that he's clearly the best choice to lead the company. So that's nice when you got the support of an activist investment group. He's been leading the Microsoft's division that makes the technology that runs the corporate computer servers, the back-end technology, and that's where the money really is at Microsoft. Two-thirds of it is in enterprise support.
So we're talking about a big profitable company but - that has also missed some big growth areas. I'm talking about, you know, where's your Microsoft phone? You don't have one.
YOUNG: Right. Well, Microsoft co-founder Bill Gates also stepped down as chair of the boards. He's going to take on the role of technology adviser once his term expires. So movement today at Microsoft. Jason Bellini of The Wall Street Journal, thank you so much for bringing us up to date.
BELLINI: Thank you.
YOUNG: You're listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.