Transcripts

The Dow Inches Closer To A New All Time High

JEFF YASTINE: Stocks on Wall Street fell for the first time this week as the Dow lost 15 points. Still, the blue chips are above the 11,500 mark and only 200 points away from an all-time high set more than six years ago. As Suzanne Pratt reports, many experts are optimistic about the outlook for stocks in the coming months.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Even with today`s slight stumble, stocks are still on solid footing. Not only is the Dow within a few hundred points of its all-time high, but September, historically a sour month for the stock market, has so far been sweet. Experts say falling energy prices and a belief that the Federal Reserve will keep interest rates unchanged are behind the recent advance.

JAMES AWAD, PORTFOLIO MANAGER, AWAD ASSET MANAGEMENT: What`s different about this year in terms of September is that the markets have gained increased confidence that the Fed is done and so far the early signals on earnings reports are very positive. So September, so far, is better than expected.

PRATT: In the first half of September, the Dow is up more than 1 percent. The NASDAQ has gained 2 percent and the S&P 500 about 1 percent. The Dow is currently at its highest level since May. For the year, the blue chip index is up more than 7 percent. Many market strategists predict stocks will continue to do well in the coming months, fueled by positive earnings news and favorable interest rates. They expect the Dow will set a new high by Christmas and end the year well into positive territory.

AWAD: It looks like we could have a 10 percent gain for the year in most major indices, which is materially better than most people were expecting.

PRATT: But experts say there are still plenty of risks. The Fed and interest rates remain a major wild card, as does an overly robust economy. On top of that, some are worried about geopolitical risk.

JOSEPH QUINLAN, MARKET STRATEGIST, BANK OF AMERICA: I think a lot of people are still forgetting about the Middle East and how volatile that area still is, whether it`s Iraq, whether it`s Iran, Lebanon, Israel. I think we could wake up to a shock, a political shock that leads to higher oil prices.

PRATT: Tomorrow could be a volatile day for stocks because it is the expiration of four different futures and options, known as quadruple witching. As traders close out or roll over their positions, the activity could create big volume or big swings in stock prices. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.