Dow Soars to Record 13,000 Point Level, But...CBS and ABC Stress the Negative

The Dow Jones Industrial Average soared past the 13,000 level on Wednesday, but the CBS and ABC evening newscasts reported the good news in the media's all-too-frequent “yes, but” framework. CBS Evening News anchor Katie Couric fretted that “even as investors are making money in the market, Anthony Mason reports there are concerns tonight about the rest of the U.S. economy.” Mason talked with a celebrating stock trader before turning downbeat: “But Wall Street and Main Street appear to be headed in different directions. While the stock market's been racing ahead, the economy has been slowing down. Housing is mired in a slump.” Liz Ann Sonders of Charles Schwab confirmed bad news for the overall economy, citing how “we have seen economic growth get cut in about half in the last year, so clearly the economy is not as strong as it was a year ago.” Mason ominously warned: “Rising gas prices, up 70 cents already this year, could slow the economy even more.”

ABC anchor Charles Gibson teased World News: “Tonight, the Dow moves into uncharted territory, zooming past 13,000 for the first time. But is the economy as hot as the market?” Gibson set up his lead story by contrasting how “the rise in recent months has been steep, despite less-than-inspiring news on the economy overall.” Betsy Stark featured pleased investors before cautioning how “there were fresh signs today of trouble in the housing market” and “oil prices shot up another dollar today, which will only add to consumers' woes at the pump.” Gibson stayed on the negative, proposing to Stark: “We've had four years of a straight bull market. Doesn't just the timing of this suggest that there might be a correction?” Stark agreed: “By historical standards, Charlie, we're actually overdue for a correction.”

ABC's spin is consistent, at least. “Dow Hits Milestone....But It May Not Be Worth Cheering” announced an ABCNews.com home page headline Wednesday afternoon (Ken Shepherd's item with a screen capture) and an on-screen graphic on Monday's Good Morning America wondered: “Will Dow Hit 13,000 Today? Is Unstoppable Market Good or Bad?” (Scott Whitlock's NewsBusters item)

If the economy is so awful, why is the stock market rising? Stark offered a hint in her piece: “The fuel behind the drive to 13,000 today, was another batch of better-than-expected corporate profits. Bolstered by a strong global economy and an American consumer that keeps on spending, thanks to a healthy job market and fatter paychecks.” Doesn't sound so bad.

The MRC's Brad Wilmouth corrected the closed-captioning against the video for the April 25 CBS Evening News coverage:
Katie Couric: "Ironically, Tompkins [“The Bishop” bomber] was arrested on a day the stock market soared to a record high. The Dow gained more than 135 points and passed 13,000 -- 13, today at least, a very lucky number. But even as investors are making money in the market, Anthony Mason reports there are concerns tonight about the rest of the U.S. economy."

Anthony Mason, on the stock market floor: "For Wall Street, which deals in numbers, this was a big one. The Dow at 13,000 for the first time ever. You've worked on this trading floor."

Kenneth Polcari, ICAP Equities: "Yeah, 26 years."

Mason: "Do you get excited when you see 13,000?"

Polcari: "I do."

Mason: "Veteran trader Ken Polcari."

Polcari: "You get excited because it's the round number, it's the next milestone."

Mason: "The market's been up 17 of the last 19 trading days. What is that telling us?"

Polcari: "Well, it's telling you that people are feeling very good about company earnings that are out now."

Mason: "Polcari says profits at blue chip companies like Boeing, American Express and McDonald's are up double digits from a year ago."

Polcari: "Earnings are good, they're coming in better than expectations and people are feeling good."

Mason: "But Wall Street and Main Street appear to be headed in different directions. While the stock market's been racing ahead, the economy has been slowing down. Housing is mired in a slump. Existing home sales plummeted more than eight percent in March. The median price now down to $217,000 has fallen for an unprecedented eight straight months. What's the likelihood this is going to affect the entire economy?"

Liz Ann Sonders, Charles Schwab: "You know, it already has on the consumer side. We have seen economic growth get cut in about half in the last year, so clearly the economy is not as strong as it was a year ago."

Mason: "Rising gas prices, up 70 cents already this year, could slow the economy even more. But stocks continue to soar. It took the Dow more than seven years to go from 11,000 to 12,000. It's reached 13,000 in less than seven months. Already this morning, I got one forecast that said it will hit 14,000 by the end of the year."

Polcari: "Well, you know, that's what happens. Every time you hit a milestone, they're always looking for the next milestone."

Mason: "While the Dow measures just 30 blue chip stocks, they're picked to be a broad barometer of the market. The other two major indexes, the NASDAQ and the S&P 500, also rallied today reaching six-year highs."

A partial transcript of the story on ABC's World News:
Charles Gibson: “Good evening. On Wall Street lately, milestones seem to be flying by like mile markers. As stocks accelerate into record territory. Today, the Dow Jones stock index went over 13,000 for the first time ever, closing at 13,089, up 136 points. The rise in recent months has been steep, despite less-than-inspiring news on the economy overall.”

Betsy Stark: “....The fuel behind the drive to 13,000 today, was another batch of better-than-expected corporate profits. Bolstered by a strong global economy and an American consumer that keeps on spending, thanks to a healthy job market and fatter paychecks.”

Alan Skrainka, Edward Jones: “Wall Street loves strong profits. And so far, profits are coming in much stronger than anyone expected.”

Stark: “But investors also seemed willing to look past some not-so-good news on the road to 13,000. There were fresh signs today of trouble in the housing market: Foreclosures up 35 percent from a year ago. And oil prices shot up another dollar today, which will only add to consumers' woes at the pump.”

Unidentified expert: “There's a lot of risks that face this stock market. Bottom line, things are good out there. But they're not great.”

Stark: “As we have seen time and again, the mood on Wall Street can change very quickly. For now, the good news is outweighing the bad. And the bulls are carrying the day.”

Gibson: “But, Betsy, we've had four years of a straight bull market. Doesn't just the timing of this suggest that there might be a correction?”

Stark: “By historical standards, Charlie, we're actually overdue for a correction, a correction defined as a ten percent pull-back. You're quite right, four years is not typical. Two years is more typical . This bull is long of tooth and there are people who are nervous about that.”
Brent Baker
Brent Baker
Brent Baker is the Steven P.J. Wood Senior Fellow and VP for Research and Publications at the Media Research Center