Stocks stumbled out of bed this morning, trying to muster up enthusiasm for work, but by midday, the groggy feeling remained. Blue-chips were dipping in and out of the red, while technology stocks wished they had just stayed in bed.
Nasdaq Composite Index
was down 90, or 2.4%, to 3727, though it rebounded slightly from its morning low of 3716.97. The
Dow Jones Industrial Average
managed to fight off the early selling and lately was above break-even, up 5 to 10,582. The small-cap
, which was the only major index that pocketed a gain last week, was down 7, or 1.4%, to 506. The broader
was down 6, or 0.4%, to 1427.
was blamed for a lot of the pressure in tech stocks today. The networking giant lately was off 6.2% after the story questioned Cisco's valuation in the wake of $6 billion all-stock bid for
The market "just sort of has a blue-funk feeling," said Doug Myers, vice president of equity trading at
in Atlanta. "There is just no compelling reason to run out and buy stocks right now. Most of the people who want to own them already do. They don't need to add to positions now." A glance at the volume on both exchanges certainly backed up that viewpoint.
Myers was referring to the general malaise of
Fed fever weighing on the market as all eyes stay focused on the May 16
Federal Open Market Committee meeting. Investors were taken for a wild ride last week as report after report showed signs that inflation might finally be rearing its ugly head.
When Friday's numbers showed
at a 30-year low and the market hopped higher, some market watchers dubbed it a "relief" rally, saying that the uncertainty of a 50-basis-point hike had been removed. Given Friday's thin volume and today's limited upside, the so-called relief looks more like wishful thinking. Things aren't likely to be any smoother this week with
Producer Price Index
, two closely watched economic indicators, on the way.
Net Stocks Share in Suffering
Net stocks were underwater, with
TheStreet.com Internet Sector
index off 14, or 1.5%, to 884.
all were down.
John Babyak, portfolio manager at
WHB/Wolverine Asset Management
, said there has been little rhyme or reason to the "topsy-turvy" market of late. "This is definitely a trader's market. They're selling the stuff that was up last week. There's no trend or real theme, nothing in here that anyone can hang their hat on."
Babyak pointed to
Young & Rubicam
as a stock that is almost emblematic of the recent market. The stock lately was down 2 1/2, or 4.6%, to 51 5/8 after news this morning that it will be taken over by British advertising giant
. The stock had a volatile ride last week. "One day it's up on news of rumors, then on Friday it sold off on rumors that the deal was off," he said.
"From a portfolio manager's standpoint, you have to take profits selectively," said Babyak. "We're stocking up on the names we like when they're down. You have to have faith. Fundamentally everything is going on sale at some point. Nothing is immune."
Indeed, watching the speed of rotation in and out of sectors these days is enough to give an investor whiplash. Financials are up today, seemingly for no other reason than that they were beaten up last week. Dow component
was rising 2.7% while
was up 2%. The
American Stock Exchange Broker/Dealer Index
was up 1.1%.
Cyclical stocks were benefiting from the stream out of tech stocks today. The Dow Jones Utility Average was up 1.7%, while the
Dow Jones Transportation Average
Oil service stocks were higher, with the
Philadelphia Stock Exchange Oil Service Index
was rising 4.4%.
Breadth was negative, particularly on the Nasdaq. Both exchanges had light volume.
New York Stock Exchange:
1,158 advancers, 1,603 decliners, 444 million shares. 63 new 52-week highs, 37 new lows.
Nasdaq Stock Market:
1,450 advancers, 2,343 decliners, 625 million shares. 29 new highs, 51 new lows.
For a look at stocks in the midsession news, see Midday Stocks to Watch, published separately.