ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MICHELE NORRIS, host:
And I'm Michele Norris. And today was a big day on Wall Street. The Dow closed above the 10,000 mark for the first time in a year. Better than expected retail sales numbers drove those gains, so did surprisingly strong earnings reports from Intel and from J.P. Morgan Chase.
Joining us now to talk about all this is NPR's Jim Zarroli. Hello, Jim.
JIM ZARROLI: Hi, Michele.
NORRIS: The Dow and the other market indexes are still far below their peaks but they've managed a pretty good comeback in the last six months. How did they do this?
ZARROLI: Yeah, you know we've seen, I think just a kind of steady return of confidence both in the stock market and in the economy as a whole. You remember probably during the worst days of the banking crisis last winter, nobody wanted to invest in anything. I mean people put their money in mattresses, so to speak. The Dow fell all the way to 6,547 on March 9th.
I think since then there's just been this kind of slow accumulation of evidence that, you know, the economy is picking up steam, little things here and there. Today, retail sales - we got a report that retail sales were up for the second straight month when you left autos out. So there's been a lot of things like that and now we've climbed back to 10,000. You know, it's a meaningless number in terms of the market, but it gets headlines. People see it and so it will probably be good for consumer confidence, and of course, that's good for the economy as a whole.
NORRIS: So despite the evidence of this uptick, we're still technically in a recession and unemployment is still very, very high. How can investors be so confident about stocks right now?
ZARROLI: Well, that is a question that a lot of people are asking. You know, there's no shortage of market bears right now who say the economy is fragile, unemployment is 9.8 percent and it's probably climbing. You know, we could see a double deep recession. You know, people say companies aren't so much making money as they are cutting workers and using their plants less so that makes their profits rise, but it's artificial. People have been saying all that but it hasn't stopped the rally. Of course, you know, the stock market is all about anticipating where the economy is going. A lot of investors see all these good things happening - these good reports. And they see light at the end of the tunnel and that is what sends the markets higher.
NORRIS: Jim, before I let you go, I want to ask you about the banking sector, because the banking sector was very much at the heart of the economic crisis. How much have bank stocks recovered?
ZARROLI: Well, they have rebounded a lot. Remember, just a few months ago, people were talking about nationalizing banks. They took huge hits from the subprime mortgage crisis. They saw big losses in retail activity from the recession. You know, Citigroup was selling for a dollar a share at one time. But we've, you know, we've seen the dust settle. There are some survivors out there like Goldman Sachs, like Wells Fargo and they're in a really good position to take advantage of the opportunities as the economy recovers. So they're, you know, they're helping companies restructure. They're doing a lot of trading and you have J.P. Morgan Chase today saying it made a lot of money in the third quarter. But still you have this boulder in the road and that is consumer loans. Banks have had to set aside a lot of money to cover potential losses and that's going to be an issue as long as unemployment is high.
NORRIS: Thank you, Jim.
ZARROLI: You're welcome.
NORRIS: That was NPR's Jim Zarroli in New York. Transcript provided by NPR, Copyright NPR.
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