Obama urges investors to be patient

President Obama on Tuesday urged Americans to look past the steady decline on Wall Street that has continued on his watch and even to consider buying some bargain stocks with an eye toward better days ahead.

The comment came as the White House sought to calm fears about its banking and economic stimulus plans, declaring it doesn’t plan to cater to the whims of the “investor class” as it tries to fix the long-term fiscal crisis.

“The stock market is sort of like a tracking poll in politics. You know, it bobs up and down day to day. And if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong,” said Mr. Obama, taking questions in the Oval Office after meeting with British Prime Minister Gordon Brown.

White House press secretary Robert Gibbs said that Mr. Obama has rejected the idea that Wall Street’s opinion of his policies should have a significant impact on his decision-making.

“For many years, as the president has said often, we had a mind-set that, if it was good for Wall Street, it was good for Main Street. Now we know that’s not the case,” Mr. Gibbs said. “The president has to look out for the broader economy and for the broader population … many of whom are investors, but not exclusively investors.”

He added later that “obviously there is concern for the investor class, because the investor class … is a great percentage of the American public.”

The president’s comments were notable not only because he declared his faith in the markets for the first time, helping to produce a relatively calm day on Wall Street Tuesday, but also because he largely shrugged off criticism by some stock investors and analysts who link the market’s latest downturn to Mr. Obama´s banking and budget policies.

Allan Meltzer, an economist teaching at Carnegie Mellon University, refuted Mr. Obama’s characterization of the market as fluctuating.

“The stock market has not been ‘up and down’ since January 20. It is mostly down substantially. And it falls especially on days when the administration announces its plans and proposals. A wise president would not dismiss this vote of no confidence,” Mr. Meltzer said.

“The administration and the Congress propose to redistribute a large share of income from upper to middle- and lower-income groups. They have set off a race between the tax rate, the inflation rate, and controls. I believe all three will win the race.”

The Dow has dropped almost 1,500 points since Mr. Obama’s inauguration a little more than a month ago, and nearly 3,000 points since his election on Nov. 4.

Mr. Obama said that his critics - financial analysts who are stars on NBC’s financial news TV channel, CNBC - are focused too much on the short term and that he sees hopeful signs emerging.

“Profit-and-earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it. I think that consumer confidence, as they see the [stimulus deal] taking root, businesses are starting to see opportunities for investment and potential hiring,” Mr. Obama said.

The Dow Jones Industrial Average sustained a small loss in seesaw trading Tuesday, closing down 37 points at 6,726. The Standard & Poor’s 500 index broke through the critical 700 level, however, and ended down 0.6 percent at 696.

Also helping the market Tuesday was the Federal Reserve’s launch of a long-awaited program to jump-start lending to consumers and small businesses. But that and Mr. Obama’s expression of confidence in the market were offset some by concern over Federal Reserve Chairman Ben S. Bernanke’s testimony that financial markets remain weak and unstabilized.

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