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1:20 p.m., Dow up 42.69.
David Henderson has two trader's coats in his closet. When stocks are tanking, he dons the red one. It's been very well worn recently. But for two weeks now, Henderson's been telling others on the floor that the bottom may be near. Other brokers rib him about this. But Henderson is steadfast. To show he means it, the trader -- whose family has worked the floor for 150 years -- got his green jacket off the hanger.
"I told a few people if we don't get a good rally, I'm going to burn this jacket," he says.
Now, with less than an hour before the Fed weighs in, Henderson at last sees justification for his optimism.
Yesterday's gain was sweet. But even today, he spots glimmers of what could be good news. The price of oil is up about $5 a barrel, good for energy stocks that have been battered recently. General Motors, one of the 30 blue chip stocks that make up the Dow, is up 41 cents -- about 6.5 percent -- on reports that fuel investor hope of a merger with rival Chrysler. Investors seem to be moving to stocks like McDonald's Corp., whose value meals draw consumers even in a down economy.
Henderson isn't kidding himself. Stocks never rise in a straight line and there's no instant gratification in this market. But, maybe, the massive plunge in the market and equally massive moves by federal policymakers to rescue the economy set the stage for better days.
On the digital board overhead, the latest headline flashes past: "Time to Give Bernanke Some Credit."
"No joke, Sherlock," Henderson says.
Beneath the headline, the board shows the Dow gaining steam -- up nearly 100 points in 17 minutes.
2:14 p.m., Dow up 76.78.
Just a minute to go now before the Fed is expected to speak.
But traders have been whispering "shhhh" since noon. Now the whispers grow louder and more frequent, a joking way to let off steam.
"Quiet on the set," one trader shouts.
But 2:15 ticks by. Then 2:16. Finally, two minutes past due, the headline flashes past on the digital board: "Fed Funds Rate 50 BPS to 1 percent. Door open to more cuts."
The only reaction from the floor is a murmur. Almost immediately, though, investors begin parsing the Fed's statement for clues to the future. At 2:18, the Dow is down 18. A minute later, it's up 14.
Warren Meyers stands at trading post No. 5, his e-broker in hand, his eyes still fixed on the screen. Another headline pops up, noting that investors -- based on the Fed's assessment -- are betting there's a 100 percent chance of another rate cut in December.
That might be good news for stocks, but offers a grim verdict on the economy.
"What does that tell you?" Meyers says. "We're nowhere near the end of it."
2:52 p.m., Dow up 17.44
Can this market hold its ground? If it does, it will be the first time all October the Dow has sustained two consecutive gains.
It's striking, though, that for all expertise clustered on the floor, there's little agreement on just where things might go next.
"It would be a great day if we were plus 50 or down 50," Frankel says. He turns to Anthony Riccio, a fellow broker, who's tracking incoming orders for Bank of America, JPMorgan Chase and other banks stocks. Buyers outweigh sellers, Riccio reports. The market seems to be building momentum.
By 3:16, the Dow is up 165.
Three minutes later, it's up 186.
Eventually it peaks up 290.
At 3:40, specialists post sheets on the sides of their computer monitors, showing trade imbalances for the stocks they supervise. There are many more orders to buy than to sell, and the sheets are posted to draw more sellers into the market. That could make for a strong finish.
"This is what we've grown accustomed to," Frankel says of the market's wild swings. "They're violent. They're fast, and you just can't believe the price movements."
That's not always apparent to the average investor, who pays attention mostly to how stocks finish days, and who may have lost track of how things use to be. Now stocks are fluctuating more in a single day then they used in a whole year.
But it's not just the size of the jumps. It's also the sudden snaps in momentum. And no time is more dangerous than the market's final minutes.
3:31, Dow up 220.64.
As the session enters its final half hour, the market waffles.
"Oh, they're giving up some of the gains," shouts Steve Grasso, who trades for Frankel. "Hold, hold!"
But the Dow catches itself. At 3:48, it is up 276.
"Pretty impressive," says a smiling Weisberg, the longtime trader. "We'll take it."
Minutes later, though, the market seems to come off its tracks. Just why is not easy to figure.
At about 3:45, one of the financial news channels relays a report about General Electric Co., quoting its CEO as saying the company forecast a 10 to 15 percent drop in its revenues. Before the afternoon is out, a GE spokesman will clarify that the comments were merely hypothetical.
But that will come too late for the market, where investors are rushing to sell GE -- one of the mainstays of the Dow -- pushing it down sharply.
The selling seems to beget more selling. To Weisberg, the longtime trader, it hints darkly at hedge funds and others gaming the market. He blames the Securities and Exchange Commission for allowing shortsellers -- who bet that stocks will fall -- to do so even when the stocks are already dropping.
The gains of the day are disappearing fast. But the Dow clings to a small gain until, at 3:57, it loses its toehold.
"Ring the bell! Hurry up!" a trader shouts from the middle of the floor.
But Weisberg, disgusted, has seen enough. He grabs his baseball cap, wraps a scarf around his neck and bids his co-workers good night.
A moment later, the board shows 4 p.m., and the bell sounds. Dow down 119.
The market has fought bravely. But it has lost today's battle. |
