Market Update: History, Stocks Holding Their Breath

Tech stocks drove into the red this morning, despite signs early on that the market would drift upward amid uncertainty over the presidential elections. The old guard, meanwhile, was tossing at the flatline, and the Dow Jones Industrial Average was lately hovering just in the green.

But breadth on the New York Stock Exchange and the Nasdaq remained narrowly mixed on paltry volume. The election now hangs on a recount in Florida, the results of which some are saying may not be out until after the market closes on Thursday.

Major Indices INDEX CHANGE % VALUE Dow 16.21 0.15% 10,968.39 S&P 500 6.88 -0.48% 1424.99 Nasdaq 69.62 -2.04% 3346.17 Russell 2000 0.91 -0.18% 505.10 TSC Internet 22.08 -3.42% 623.70 NOTE CHANGE PRICE YIELD 10-Year Treasury 1/32 99 3/32 5.872% Market data as of: 10:52 AM ET, Wed Nov 8 2000

Cisco(CSCO) was one of the Nasdaq's most actively traded stocks this morning. The networking darling was falling after being removed from Morgan Stanley's fresh money buy list this morning -- it was lately off 2.97%. The company's shares rose a few percentage points yesterday following a fabulous earnings report and outlook Monday evening.

Tech bellwethers were also slipping across the board, including semiconductors Intel(INTC) and Texas Instruments(TXN), PC-maker Dell(DELL) and software-maker Oracle(ORCL).

Drug, tobacco, and energy stocks were drumming up a little rallying spirit, however, as Bush maintained an unofficial lead in Florida and the Democrats were unable to win a majority in the Senate. This would leave the House in control of the Republicans and, depending on the outcome of the election, could mean a slim majority for Republicans in the Congress.

Gore was seen harming drug, tobacco and energy stocks because of his proposals for prescription drug price controls, as well as tough antitrust and anti-big business stances. Pharmaceuticals companies such as Eli Lilly(LLY) and Merck(MRK) were up 4.3% and 4.7%, tobacco giant Philip Morris(MO) was rising 3.2%, and energy company Chevron(CHV)was up 1.1%. The American Stock Exchange Oil & Gas Index was rising 0.4%, the American Stock Exchange Pharmaceutical Index was up 2.96% and the American Stock Exchange Tobacco Index was up 2.8%.

Microsoft(MSFT) had been trading up in early action on optimism over Republican control of the government as well as Lehman Brothers' increase on its 12-month price target for the company, but lately the stock was slipping back to near the flatline. The Republicans would be good for this stock because they would be expected to drop or ease the government's antitrust case against the company. Microsoft was lately up 0.4%.

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Sector Watch

Financials were performing miserably this morning, with the American Stock Exchange Broker/Dealer Index off 3.1% and the Philadelphia Stock Exchange/KBW Bank Index falling 2.5%.

Semiconductors continued yesterday's slide on concerns that networkers have begun to build up chip inventory and probably won't be buying a whole lot more any time soon. The Philadelphia Stock Exchange Semiconductor Index was slipping 3.7%.

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Bonds/Economy

Bond prices were trading erratically this morning as the outcome of the presidential elections continued to hinge on a recount of votes in Florida.

The benchmark 10-year Treasury note was falling 1/32, at 99 3/32, to yield 5.872%.

The 30-year Treasury bond was up 2/32, to 104 31/32, to yield 5.893%.

Bond prices have slipped sharply over the past few days, albeit on light volume, and some say they have been attempting to account for a Bush win ahead of time. Bush is seen as negative for bonds, while a Gore victory would probably have a positive effect. Yesterday, the market lost ground ahead of the election, and so far, it is sliding again. TheStreet.com recently took a close look at how the bond market should respond to the election.

A few pieces of economic data came out this morning, including the Mortgage Applications Survey (definition | chart | source) and import price (definition | chart | source ) index.

The Mortgage Applications Survey for the week ended Nov. 3 fell to 651.2 from 654.6 in the previous week. The Purchase Index rose to 310.5 from 304.6. The import price index for October, meanwhile, fell 0.5% after a rise of 1.2% in September. The export price index slipped 0.1% after a rise of 0.5% in the prior month.

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