The Stock Market Stumble

On Wall Street Thursday, stock prices rallied. CBS News Correspondent Anthony Mason reports investors have been snapping up bargains on a market rattled by fears of inflation and higher interest rates.

The stock roller coaster ended up, but since all the major market indexes hit record highs on July 16th, it has actually been a downhill slide for the markets. The Dow has lost more than 400 points; The NASDAQ has fallen by 12 per cent.

"So for three weeks we've been in a corrective phase," according to Larry Wachtel of Prudential.

The high-flying Internet stocks have been in free-fall. The auction site eBay, the brokerage site E-Trade, the bookseller Amazon.com, and America Online are all down at least 50 per cent from their highs this year.

But remember, says Wachtel, the bull market is now 4 years old. "At the peak in July we were up 10 trillion dollars and 7000 Dow points," Wachtel said. "Give me a break. What do you expect for an encore? I'm not a money machine."

Wall Street is also warily watching the Fed chairman, knowing the eyes of Alan Greenspan will be on tomorrow's unemployment numbers.

If Greenspan sees a hint of inflation, the Fed could raise interest rates again at its August 24th meeting. The markets will be uneasy until then.