Market Update: Nasdaq Ends With Firm Grip on Green; Dow Loses Over 100 Points

The bloody red that was spread all over the screen earlier in the session receded a little during the end of today's session, but the Dow still ended off more than 100 points.

The major indices were still smarting over what Fed Chairman Alan Greenspan didn't say yesterday when he spoke before the Senate Banking Committee. While all was not forgotten, they were at least starting to forgive.

Major Indices INDEX CHANGE % VALUE YR TO DATE Dow 107.91 -0.99% 10,795.41 0.1% S&P 500 2.89 -0.22% 1315.91 -0.3% Nasdaq 63.67 2.62% 2491.39 0.8% Russell 2000 2.78 -0.55% 502.57 3.9% TSC Internet 9.73 3.00% 333.96 11.1% NOTE CHANGE PRICE YIELD 10-Year Treasury 15/32 99 5.129% Market data as of: 4:11 p.m. EST, Feb. 14, 2001

On Tuesday, the Dow Jones Industrial Average and the Nasdaq Composite Index dropped on the lack of urgency in Greenspan's testimony. Today, they continued to get hurt, but the Nasdaq, at least, ended in the green.

Although it ended off its lows, the Dow still posted a triple-digit losses, which when added with yesterday's losses, wiped out the 165 point-gain it made on Monday. Only five of its 30 components were on the upside, including the tech triumvirate of Hewlett-Packard(HWP Quote), IBM(IBM Quote) and Intel(INTC Quote). Microsoft(MSFT Quote) had been down earlier, but turned up slightly.

The software behemoth was suffering earlier in the day after a leadership shakeup and news of a probe by the Justice Department into its $135 million investment in Corel(CORL Quote), which publishes WordPerfect word-processing software. Regulators are investigating whether the alliance threatens competition in the office software market.

The biggest drag on the Dow was diversified manufacturer 3M(MMM Quote), which has been making steady gains, for the most part, since the beginning of the month. The maker of Scotch tape and Post-It notes looks like it was the victim of some profit-taking, off 2.8% to $110.97.

And while tech seemed to be leading the way in today's trading, there has been no real leadership in the market in the past several weeks. More and more people are saying that the market's simply going to drift until the second half of the year, when the rate cuts will start to be felt. Even more, the market is waiting for consumer sentiment and confidence to improve, which will bring investors and money back.

Meanwhile, the Nasdaq was back in positive territory after a fairly volatile morning.

JDS Uniphase(JDSU Quote) was the most actively traded stock on the Comp. It's had an up and down day, too. It ended 7.1% higher to $41.25 lately. The fiber-optics component supplier, which completed its merger with former rival SDL(SDLI Quote), warned yesterday after the close that its third-quarter earnings would miss estimates, citing uncertainty in capital spending plans by telecom carriers and customer inventory adjustments.

The news still hurt related optical stocks, though, with Nortel Networks(NT Quote) and Corning(GLW Quote) on the downside.

And non-tech company Coldwater Creek(CWTR Quote) fell 43.4% to $20 after the women's clothing retailer cut its fourth-quarter earnings estimates to between 4 cents and 7 cents a share because of sales shortfalls. The First Call/Thomson Financial seven-analyst estimate for the quarter was 66 cents.

There were some bright spots on the index, though, including Sycamore Networks(SCMR Quote), which announced better-than-expected earnings after Tuesday's close. It was up 16.6%. The news helped competitor Ciena(CIEN Quote), which was up 11% to $76.81.

Also on the upside was Applied Materials(AMAT Quote), which was getting some lift off of its good earnings announcement after yesterday's close. J.P. Morgan upped the company to a long-term buy from market performer on the announcement. Still, the company offered up a dim outlook for the future, sparking a stream of EPS cuts. The stock was up 13.5% to $46.81.

Elsewhere, on the New York Stock Exchange , ConAgra(CAG Quote) got flattened 19.5% to $20.01 after it announced that it had to lower its earnings estimates because of higher energy costs and the slowing economy.

Sector Watch

Semis were bouncing today, with help from the aforementioned Applied Materials. The Philadelphia Stock Exchange Semiconductor Index was up 7.8%. Component Xilinx(XLNX Quote), up 7.3% to $51.25, announced that it would expand its Irish unit, creating 500 new jobs.

Another factor helping the sector was the note from J.P. Morgan, which raised not only Applied Materials to long-term buy from market performer, but also KLA-Tencor(KLAC Quote), Novellus Systems(NVLS Quote), ASM Lithography(ASML Quote) and Varian Semiconductor Equipment(VSEA Quote).

Also getting in on the action were computer hardware makers. The Philadelphia Stock Exchange Computer Box Maker Index gained 3.3%, with much help coming from Micron Technology(MU Quote), up 12.1%, and Sun Microsystems(SUNW Quote), 6.2% higher.

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Bonds/Economy

Treasury prices are mixed. The market has little to respond to until more-relevant economic data is released at the end of the week. Federal Reserve Chairman Greenspan's Senate testimony yesterday was less aggressive in the context of interest rates than traders had wanted. Although Greenspan discussed the fragile economy and even suggested that a recovery might not gather pace until much later this year, he also hinted that the fundamentals were properly configured for now to help the revival.

A Reuters poll of 25 Wall Street bond dealers shows that the majority expect a half-point cut in the fed funds rate at the next Federal Open Market Committee meeting on March 20.

The benchmark 10-year Treasury note lately was down 15/32 to 99, raising its yield to 5.129%.

In economic news, business inventories (definition | chart | source) rose by 0.1% for the month of December, down from 0.3% in the previous month. The growth was .1% less than economists had predicted and the smallest rise seen since January 1999. The trend confirms Greenspan's observations yesterday that information technology is enabling companies to better balance their stock of goods when faced with fluctuating demand. The year-to-year rise in the number also dropped to 6.1% from 6.6%; it's now at its lowest level since May.

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