Down, but far from out.
After the thrill of yesterday's bull run, stocks gave an anticlimactic performance today. But few market watchers fretted.
And heck, why should they? The economy continues delivering roses. This morning's data reassured even the most nervous nellies that the economy is still in Goldilocks mode. Not too hot, not too chilly. The bond market reacted by dipping the yield on the benchmark 30-year bond to 6.52%. The dollar was mixed against major currencies.
Dow Jones Industrial Average
edged under the 7000 mark, losing 33.48 to 6988.96. The broader
dropped 3.34 to 808.48, while the
Nasdaq Composite Index
slipped 3.62 to 1367.19. Yet the
edged up 0.95 to 369.13. Could that signal a small-cap rally?
Not yet, says Robert Robbins, market strategist at
in Atlanta. "It's probable that the secondaries will have some measure of outperformance, but not now. It may happen in the spring," he says. "We've got so many positives working for the stock market and so much money flowing in, it's got to go into big caps."
He said the Dow's decline after yesterday's 7000 breakthrough is "not significant." He said the bond market's strength is more important and will drive stocks in future weeks. As a bullish indicator, he predicted the yield on the 30-year Treasury will drop to 6% by midyear.
Another longtime bull, Abby Joseph Cohen, market strategist at
, said the horns are still intact in a report she issued this morning.
While Cohen is sticking with her year-end target of 815 to 825 for the S&P 500 and 7050 to 7150 for the Dow, she described those as "conservative." The report also states that price-to-earnings ratios are in line with the current cost-of-living increase of about 2%.
Still, investors were taking a break, or taking a profit, from their beloved blue-chips.
dropped 1 3/8 to 145;
dipped 3/4 to 106 1/2;
Merck & Co.
lost 2 1/8 to 97 1/2; and
sank 1/8 to 103 7/8.
Winners still outpaced losers, with 1,345 stocks gaining and 1,148 declining. A somewhat moderate 484.8 million shares changed hands.
was the most heavily traded Big Board stock, with 5.9 million shares changing hands. The company jumped 3/4 to 34 on news it would see a gain in the second quarter from a secondary offering of its
unit. It also noted it would benefit from rising DRAM prices. Micron Electronics, however, lost 5/8 to 18 3/4.
was a healthy gainer, up 3 3/4 to 54 3/8 after
upgraded it to a strong buy from a buy.
In other news,
said it named James Tobin president and chief executive. He succeeds James Vincent, who will continue as chairman. Shares of the biopharmaceutical company rose 3/8 to 49 3/4.
Financials remained strong, with
gaining 2 3/4 to 126 1/4 and
rising 1/8 to 96 5/8.
failed to participate, dropping 2 7/8 to 120 1/8.
On the losing side, technology dragged Nasdaq down.
dipped 2 to 97 7/8;
sank 2 5/8 to 154 1/2; and
lost 2 1/8 to 32 5/16.
was unchanged at 62 5/8. But
rose 1/2 to 41 3/4.
Another big Nasdaq loser:
plummeted 9 to 19 7/8 despite beating analysts' EPS estimates for the fourth quarter ended Dec. 31 by one penny. The purveyor of closed-circuit television products for security surveillance earned 19 cents compared with 10 cents last year.
David Lee Smith, senior analyst with
Hoak Breedlove Wesneski
in Dallas, said the market reacted to the company's admission in its conference call that internal growth accounted for only 15% of overall growth. The rest came from acquisitions. The company also suggested January sales were below expectations. Nevertheless Smith, whose firm has done underwriting for the company, reiterated his buy rating. "The market grossly overreacted," he says.
On the scandal front, former
Chief Executive Emanuel Pinez was arraigned in U.S. District Court in Boston. The
Securities and Exchange Commission
charged him with insider trading and fraud. That stock has not opened since news circulated Tuesday about possible accounting irregularities.
In case all the economic data sounds too good to be true, there is one cloud on the horizon. If pilots of
strike, the economy would foot the bill to the tune of $100 million to $200 million a day, according to the
Department of Transportation
Not to mention derailing all the weekend travel plans.
By Suzanne Kapner