Daily Debrief: Tech stocks plummet with the rest Video

Daily Debrief: Tech stocks plummet with the rest Video Transcript

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>> Kara: Welcome to the Daily Debrief, I'm Kara Tsuboi, here with Senior Writer Ina Freed [assumed spelling] to talk about the abysmal market today, Monday, October 6th. The Dow's well below 10,000 the NASDAQ below 2,000, let's talk about how major tech companies are trading right now, Google for one, let's start with them.

>> Ina: Well, ya know -- all the major companies are down -- ya know -- I think there's a -- ya know -- growing sense that this is gonna be a deeper impact on the economy. I think also what we're seeing is -- ya know -- there's a lot of excitement around the bailout that -- ya know -- once that happened and I think people are realizing that even with the bailout --

>> Kara: Yeah

>> Ina: a bunch of stuff is pulling back and you know the way the economy works once one sector pulls back -- ya know -- it's sort of everything so intertwined --

>> Kara: Absolutely

>> Ina: that technology's going to get hit.

>> Kara: So big companies, Google, Microsoft, how are they trading right now? We don't need specific numbers but are they --

>> Ina: Sure, they're down -- ya know --

>> Kara: Significant percentages?

>> Ina: Yeah, we're seeing the same thing there -- ya know -- several percentage decreased for a lot of the major tech companies. The biggest thing we saw was SAP warning that -- ya know -- it's already seeing an impact, so that they -- their 3rd quarter earnings came in lower than expected due to -- ya know -- slowness in spending and I think -- ya know -- their directly exposed to enterprise software so I think that's one thing we're seeing but -- ya know -- consumers are also spending less and -- ya know -- we're starting to see the ripple effects of that.

>> Kara: But now the significance of SAP's announcements or numbers release are that -- they are software, they are on the business side of things and if that's down then obviously the consumer's gonna follow after that is the thinking.

>> Ina: Yeah, I mean, -- ya know -- these things happen a little bit separately -- I mean -- businesses -- ya know -- have a different sort of spending pattern consumers though. Ya know -- the big thing is job losses and -- ya know -- we're starting to see big layoffs, we're starting to see the bank consolidation, inevitably these rush mergers are gonna -- ya know -- they haven't planned for it but there's gonna be a lot of consolidations and job losses there and -- ya know -- that has a ripple effect then of -- ya know -- as consumers really start to worry about jobs -- ya know -- unemployment has been an issue in some parts of the country and some parts of the economy, but -- ya know -- we're starting to see -- ya know -- broad companies talk about layoffs and I think -- ya know -- once there's talk of layoffs then consumers are like, "What about my job?" They start spending less, businesses are on a different cycle but they seem to be seeing the same thing so I think there's a lot of broad economic worries.

>> Kara: And I think another worry is that the blood-letting is not over, I mean yes the market has taken a significant nose dive today but we still have the rest of the week to make it through and it's not looking like there's an end in sight.

>> Ina: Yeah, I mean, -- ya know -- this is a fresh wave of worry -- ya know --

>> Kara: Right

>> Ina: last week it was all about the bailout. Is it gonna happen? It isn't gonna happen, now it's happened and there's fresh concerns and obviously -- ya know -- those concerns aren't one day issues these are sort of Wall Street trying to make sense of what is the magnitude of what it's certainly seeing.

>> Kara: And I think that a lot of people are realizing that, yeah $700,000,000,000 doesn't solve any sort of fundamental problem that could actually turn this around.

>> Ina: Right, it sort of -- ya know -- prevents -- ya know -- a cyclical economic thing from becoming a major catastrophe but we've still got this cyclical economic thing, which is -- ya know -- the way these things work is they feed off each other and obviously -- ya know -- the more we all talk about it and the more -- ya know -- it becomes a reality and there was a poll that I saw on CNN that 60%, 59% of Americans thought we're headed for a depression and -- ya know -- that D word's only been used once in the last 100 years, so that's a big thing.

>> Kara: Absolutely, and there is something to say for -- ya know -- momentum -- public momentum for thinking one way or another and -- ya know -- keeping their wallets shut.

>> Ina: Well, and that is actually -- I mean -- ya know -- some things aren't a fate [inaudible] just because we think them but -- ya know -- if we think the economy's worse and we spend less suddenly the economy is worse, and I think there's more going on than just consumer confidence but obviously consumer confidence is a big issue.

>> Kara: Absolutely. Senior Editor, Ina Freed, I'm Kara Tsuboi, we'll see you on the next Daily Debrief. ^M00:03:46 [ Music ]