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Morning News

Morningtar's John Rekenthaler Answers Market Questions

Aired October 19, 2000 - 11:19 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDRIA HALL, CNN ANCHOR: And there is a lot happening out there, as well as on Wall Street. It is calmer this morning, though. Still, there are shell-shocked investors out there with lots of questions on their minds.

BILL HEMMER, CNN ANCHOR: Our guest, once again, live from Chicago, here to answer some of those questions. John Rekenthaler, Morningstar, joins us from Chicago.

Hey, John, welcome back.

JOHN REKENTHALER, MORNINGSTAR: Thank you.

HEMMER: A couple of e-mails for you. Are you ready?

REKENTHALER: Yep, I am all ready.

HEMMER: This is kind of topical, going to go ahead and put it up on the screen for you. The question is now: "How much do you think the presidential election will affect the market?"

Kind of an interesting topic, do you think it is holding back at all just because of the indecision thus far?

REKENTHALER: I think the election has had relatively little effect on the stock market. It's been about the economy, the earning reports. I remember two weeks ago reading a analysis that the stock market was down because Gore was ahead in the polls. Well, since then, Bush has moved ahead in the polls and the stock market has gone down further.

And I think most pundits who try to link the stock market with the political effects are about that accurate in their assessment.

HALL: We know there is accuracy regarding the headlines.

REKENTHALER: The headlines work, the presidents don't. That is correct.

HALL: Let's get to the next question then. "Is now a good time to buy into stable companies hitting 52-week lows? And, are there any specific sectors that look appealing to you?" And that's by Scott Heller. REKENTHALER: Well, I think it's usually a good time to buy into stable companies, by Stable I take that mean companies that post consistent earnings and have strong business prospects that are hitting 52-week lows. That often means they are temporarily unpopular, investment fads have left them behind, and it is a good entry point to get in.

I think now is a good time for those kinds of companies. I think now is probably not a bad time to be entering into the market. I am not quite pounding the table and saying: This is the buy of the decade. There is still some economic news we need to move through. But things aren't bad. And certainly prices are cheaper.

HEMMER: Your answer kind of goes into our next question, Devin, here in Georgia, Decatur, Georgia, just east of Atlanta wants to know: "Is anyone willing to speculate on how long investors will have to wait for the current down trend in the market to bottom out?"

I guess if you knew that answer, John, we would all throw our money at you, huh?

HALL: We would not be sitting here right now.

REKENTHALER: We passed 10000 on the Dow today, and with luck, we won't see that again. But, you know, there's no guarantees. But it would be nice if this were the last time we hit the 10000 mark in either direction.

HEMMER: Sure would. We saw it back in March, we saw it again yesterday. John Rekenthaler, Morningstar, live in Chicago. Thanks, John.

REKENTHALER: Thank you very much, Bill and Andrea.

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