The ABC, CBS and NBC evening newscasts on Friday all devoted full stories to the fall in the stock market, touted as “the worst two-day point drop for the Dow in five years,” but barely had time for a sentence about the 3.4 percent second quarter jump in the GDP, the biggest in over a year. In fact, neither ABC nor NBC cited the specific 3.4 percent rise in the Gross Domestic Product, the measure which the AP on Friday described as the “best barometer of the country's economic fitness.” Not one of the three evening newscasts mentioned how the Dow is still well above the 13,000 level it broke through in April and none noted fresh good news on inflation.
ABC was the most negative. “Stock slide,” World News anchor Charles Gibson teased, “Wall Street finishes the worst week of the year down nearly 600 points.” Gibson soon highlighted that news, as he only alluded to the good GDP number, when he reported “the worst week for the Dow in five years. Even positive news on economic growth wasn't enough to keep investors from selling. Among other things, they had to contend with a battered housing market.” Reporter Betsy Stark agreed as she too only made a passing reference to the GDP: “It sure is, Charlie. In fact, buried inside that positive report on Gross Domestic Product today was more evidence of what economists now describe as an outright recession in the housing sector.” ABC didn't even put the GDP number on screen as Stark devoted her entire story to the impact of the declining housing market before concluding that “it increases the odds of a downturn in the overall economy since housing now accounts for roughly one in ten American jobs.”
Over on the CBS Evening News, anchor Katie Couric suggested “Wall Street investors may be seeing stars after the beating they took this week. The Dow had another big loss today, more than 200 points. For the week, the Dow gave up nearly 600 points -- or about four and a quarter percent -- its worst week in five years.” Actually, percentage-wise, it's really the biggest drop in the Dow in four years. Reporter Kelly Wallace, formerly of CNN, began with a sentence about the GDP: “Better-than-expected economic growth for the second quarter touted by President Bush and still stocks tumbled.” But unlike ABC and NBC, CBS at least put the “3.4%” on screen. As opposed ABC's dour spin, Wallace featured brokers and investors who expect the stock market to recover over the long term. Wallace pointed out that “from 1985 to 2006, the Dow grew an average of 8.6 percent per year. If you invested $1,000 back then, you'd have over $15,000 today.”
NBC Nightly News anchor Brian Williams highlighted “the worst two-day point drop for the Dow in five years” before turning to CNBC's Erin Burnett for an explanation. After listing three reasons for the downturn, Burnett delivered one non-specific sentence about the GDP: “There is good news out there and today we found out the U.S. economy is growing a lot more quickly than people expected.”
A Friday AP dispatch by Tim Paradis differentiated between the point and percentage reductions:
The Dow fell 208.10, or 1.54 percent, to 13,265.47, with nearly 140 points of that loss coming in the final half-hour of trading. For the week, the index fell more than 585 points, or 4.23 percent. The week's point decline was the worst in five years, while the percentage decline was the largest since late March 2003.
Another AP story on Friday, by Jeannine Aversa, led:
The economy popped out of its rut this spring and grew at the strongest pace in more than a year, giving President Bush something to crow about.
The best barometer of the country's economic fitness — gross domestic product — increased at a 3.4 percent annual rate in the second quarter, the Commerce Department reported Friday....
Aversa pointed out another upbeat development skipped by the networks:
An inflation gauge closely watched by the Federal Reserve showed "core" prices -- excluding food and energy -- rose at a rate of just 1.4 percent in the second quarter. That was down sharply from a 2.4 percent pace in the first quarter and was the smallest increase in four years.
Given how the media choose to highlight bad news on the economy over good news, another fact relayed by Aversa is hardly a shock:
Bush has been trying to counter weak public-approval ratings for his handling of the economy. Only 37 percent approve of his performance, close to a record low, according to a recent AP-Ipsos poll.
The MRC's Brad Wilmouth corrected the closed-captioning against the video for the July 27 ABC and CBS evening newscast stories, I handled NBC:
ABC's World News:
CHARLES GIBSON: Well, it's been a rough week on Wall Street. The Dow closed down 208 points today. For the week, it dropped 586. That's the worst week for the Dow in five years. Even positive news on economic growth wasn't enough to keep investors from selling. Among other things, they had to contend with a battered housing market. And ABC's Betsy Stark is here. And, Betsy, the housing slump seems to be taking its toll.
IVY ZELMAN, Housing analyst: When the housing market hits the skids, everybody's feeling pretty concerned and house broke. And they stop spending or they slow down spending.
STARK: You don't need to tell Marsha Elliot the spigot's been turned off.
MARSHA ELLIOTT, Terrestris Development: The slowdown has been dramatic nationwide, as well as here in the Midwest. And we're all feeling it.
STARK: Last year, at this time, this Chicago homebuilder had around 35 homes under construction. This year? Only eight.
ELLIOTT: When I'm not building, that means the excavator is not working. The surveyor is not working. The engineer is not working. And that's at the very beginning.
STARK: Businesses that depend on homebuilding, from kitchen and bath retailers to furniture and carpet makers, are also getting squeezed. The International Council of Shopping Centers says the worst retail sales in four years can be summed up in one word: housing.
ZELMAN: Anything that touches housing to Wal-Mart sales are being negatively impacted. And I think that it's spread. The ripple effect is huge.
STARK: At Marvin Windows, one of the largest makers of windows and doors in the country, orders are certainly down.
DAN MARVIN, Marvin Windows: The concerns right now is how long the slump in the market is going to last.
STARK: Housing-related job cuts have tripled this year to more than 37,000, led by layoffs in construction and mortgage lending. And the consensus is the fallout is going to get worse before it gets better.
THOMAS LAWLER, Housing economist: It will probably take another year and a half or two years to work its way through.
STARK: That would mean no turnaround in the housing market until close to the end of the decade. And if that's right, it increases the odds of a downturn in the overall economy since housing now accounts for roughly one in ten American jobs, about 15 million American jobs.
CBS Evening News:
KELLY WALLACE: After a week of being pounded by bad news, the market couldn't even accept good news. Better-than-expected economic growth for the second quarter touted by President Bush-
GEORGE W. BUSH: It's an economy that is large and flexible and resilient.
WALLACE: -and still, stocks tumbled. Despite the Wall Street roller coaster, investors like Mary Ellen Scott are not concerned.
MARY ELLEN SCOTT, Investor: Well, I've been in it long enough to see it go up and go down and come back, so that's what I'm thinking it's going to do.
WALLACE: History is on her side. From 1985 to 2006, the Dow grew an average of 8.6 percent per year. If you invested $1,000 back then, you'd have over $15,000 today. Are the phones ringing off the hook?
ALYCE ZOLLMAN, Charles Schwab: Surprisingly, no.
ZOLLMAN: But ultimately, I think the most important point is to understand that investing is a lot like the weather. We can't predict the weather. We can't control the weather. The only thing that we can do is prepare for it. And investing's really no different.
WALLACE: After a turbulent week, the market can now catch its breath for a few days. The next big economic report, which could determine whether Wall Street continues its wild ride, is the unemployment rate, and, Katie, that comes out next Friday.
NBC Nightly News:
BRIAN WILLIAMS: Now we move to Wall Street and a dramatic end to a brutal week for the markets: The worst two-day point drop for the Dow in five years. The sellers came out in force. The last half hour of trading today the Dow finished down another 208 points. You combine that with yesterday's 300-plus point drop, that put the loss over 500. We're joined tonight from CNBC by Erin Burnett.
ERIN BURNETT: Yes, I mean, it has been an amazing week, Brian. You said it, the worst we have seen in five years for the broader markets here in the U.S. and you say, why so much pain so suddenly? Alright, Brian, I broke it down. Three reasons: One, home prices, they are falling more than expected, and two, easy credit. It's simply gone. Loans are harder to come by for everyone. Third, energy prices. You talk a lot about those there, they are up and tonight oil prices closed a penny shy of a record. It is a perfect storm for stocks. But Brian, the truth is it's never quite that simple. There is good news out there and today we found out the U.S. economy is growing a lot more quickly than people expected, despite all of those head winds. I spent all day talking to money managers, the vast majority still firmly believe while the market will be very volatile in the short-term, we could have many more days like this though, they do believe we could end the year higher. So, we'll be talking a lot more about this story.
WILLIAMS: Everybody gets to take a breath over the weekend. We'll check back in on this on Monday as you will. Erin, thanks a lot for that.
