Transcripts

Wall Street Rallies But Hasn't Recovered

PAUL KANGAS: As we reported, that Geithner news sparked a huge late day rally on stocks. But, one day they say does not make a recovery. As Suzanne Pratt explains, there are many factors still weighing on Wall Street.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: There's no question the stock market is suffering from a massive crisis of confidence and this week the sense of desperation on Wall Street reached a fever pitch. Confidence is a somewhat elusive quality. But, it's almost mandatory for the functioning of capital markets which are the underpinning of the U.S. economy. Today, many experts said naming Tim Geithner as the next Treasury secretary will help fill the confidence vacuum as it lifts some of the uncertainty overhanging stocks. But, they also say it will take much more to fully restore confidence on Wall Street.

ARTHUR CASHIN, DIR. NYSE FLOOR OPERATIONS, UBS: First of all from the stand point of the stock market, we need a couple of quiet days without a final hour massacre that we've been getting ever since November the 14th.

DAVID KATZ, CHIEF INVESTMENT OFFICER, MATRIX ASSET ADVISORS: We think very simply you need the credit markets to start doing better. We need the debt markets to start functioning better and we need to have a few week period where you don't have a run on a bank.

JOSEPH MCALINDEN, CHIEF INVESTMENT OFFICER, CATALPA CAPITAL: I think a lot of what we need is already in place. And, what I think you need to do is to get through what is very often a bad season when you've gone through a bear market, which is the fourth quarter.

PRATT: Let's say we get any or all of the things on those wish lists. How will investors know that the stock market has reached a bottom?

MCALINDEN: We won't know when the market has actually made a bottom to the day or even to the week. What I can tell you is that in the majority of bear markets in the past, the fourth quarter has been a period where bottoms have been put in.

KATZ: We will know we've reached a bottom about six to eight weeks afterwards when the market is about 35 percent higher. You definitely will not know that you've reached the bottom when you're reaching the bottom and that's the most important point for investors to remember.

PRATT: Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.