Market Update: The Waiting Is the Hardest Part -- Especially for the Nasdaq

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Sector Watch Bonds/Economy

This is not just politics as usual. And for Presidential candidates and stock market investors handcuffed by uncertainty over the election, the waiting is the hardest part.

Even though Republican presidential candidate George W. Bush told reporters that he expects the recount in Florida to confirm his victory over Al Gore, many on Wall Street remained on the edge of their seats and, for the most part, on the market's sidelines. Volume on both the Dow Jones Industrial Average and the Nasdaq Composite Index was thin.

Major Indices INDEX CHANGE % VALUE Dow 45.12 -0.41% 10,907.06 S&P 500 22.54 -1.57% 1409.33 Nasdaq 184.05 -5.39% 3231.74 Russell 2000 4.94 -0.98% 501.07 TSC Internet 46.07 -7.13% 599.71 NOTE CHANGE PRICE YIELD 10-Year Treasury -- 99 5/32 5.863% Market data as of: 4:12 p.m. EST, Nov. 8, 2000

Traders, who did play today's session, seemed to have bet on a Bush victory. Sectors that would benefit from a Republican win -- drugs, tobacco, and energy among them -- all traded higher in recent action. Because of his proposal for prescription drug price controls and his tough talk about big business, Gore is viewed as a threat to those industries. Meantime, technology stocks -- which expect to be advantaged by a Democratic presidency -- posted triple digit losses.

Drug giant Merck (MRK), a Dow component, popped 4.5% and hit a 52-week high of $91.69 earlier today. Fellow blue-chip company Johnson & Johnson (JNJ) lifted 1.4%. Other pharmaceutical companies including Pfizer (PFE), up 1.3%, and Eli Lilly (LLY), ahead 3.7%, took advantage of today's action. The American Stock Exchange Pharmaceutical Index hopped 2.2%.

Tobacco titan Philip Morris (MO) gained 4.1%. The American Stock Exchange Tobacco Index was up 1.9%.

Shares of energy giant ExxonMobil (XOM) pumped up 1.9%. Other oil stocks that advanced today were R&B Falcon (FLC) and Global Industries (GLBL). The Philadelphia Stock Exchange Oil Service Index popped 2.4%.

On the technology front, semiconductor stocks continued to slide amid concerns that networking equipment manufacturers have built up chip inventory, leading to a slow in demand for semiconductors. Shares of Intel (INTC), down 7.6%, contributed the most downside to the Dow in late-day trading. The Philadelphia Stock Exchange Semiconductor Index slipped 7.6%.

Cisco Systems (CSCO), whose inventory report triggered the selloff in chip stocks, shed 8.2%. This morning, the networking equipment manufacturer was removed from Morgan Stanley's "fresh money" buy list.

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Market Internals

Breadth was negative on modest volume.

New York Stock Exchange : 1,299 advancers, 1,478 decliners, 896 million shares. 87 new 52-week highs, 32 new lows.

Nasdaq Stock Market : 1,310 advancers, 2,512 decliners, 1.661 billion shares. 61 new highs, 101 new lows.

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Most Active Stocks

NYSE Most Actives

• AT&T (T): 22.3 million shares.

• Corning (GLW): 19 million shares.

• Lucent (LU): 15.2 million shares.

Nasdaq Most Actives

• Microsoft (MSFT): 102.1 million shares.

• WorldCom (WCOM): 67.1 million shares.

• Oracle (ORCL): 62 million shares.

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Sector Watch

Transport stocks got a lift in late-day action, helped along by the airliners. The Dow Jones Transportation Average climbed 0.2%. Component Northwest Airlines (NWAC) gained 0.2%, while Delta (DAL) rose 3.5%.

Shares of financial stocks, meantime, dropped amid concern about the election outcome. Morgan Stanley Dean Witter (MWD) and Lehman Brothers (LEH) both dropped about 5%. The American Stock Exchange Broker/Dealer Index fell 2.8%.

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Bonds/Economy

Bond prices were trading erratically 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 2/32, at 99 6/32, to yield 5.86%.

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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