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Rekenthaler: Capital Spending, Not Election Uncertainty, 'Underlying Force' to Weakness on Wall StreetAired November 14, 2000 - 11:54 a.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: So how are the financial markets reacting to this one-week-old election deadlock? and do investors have any reason to be concerned.
Let's ask John Rekenthaler, research director for Chicago-based Morningstar. He is with us.
JOHN REKENTHALER, MORNINGSTAR, INC.: Hi. Kyra.
PHILLIPS: Well, first reaction here, do you think it really is the election fury that has been knocking down the markets in the past week or is it capital spending?
REKENTHALER: It's really capital spending. Certainly the elections have not helped, and there is no question that the elections have knocked a few points off of the averages. But basically, what is going on here, there are legitimate concerns that capital spending in technology and communications equipment, which is, what has fueled much of our bull market the last three, four years is slowing down. And that is really the underlying force that has been pushing down the financial markets.
PHILLIPS: Well, now, today we have seen Wall Street sort of edging up and doing a lot better today.
REKENTHALER: Yes, and I think there is still uncertainty with the election, as far as I can tell. So, you know, no question that had the election been settled on Tuesday cleanly and we had a clear winner that the financial markets would have not fallen as far as they have. I estimate maybe a half or a third of the decline since Tuesday is due to the election uncertainty. But that is not the majority effect.
Regardless of who was elected president, Dell would still have had an announcement that PC spending is slowing. Hewlett-Packard would have had a disappointing announcement and so forth.
PHILLIPS: All right, stand by for a minute, John.
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