A broad range of stocks were coming under pressure near midsession after a fleeting early rally transformed itself into a resumption of
Nasdaq Composite Index
was down 84, or 1.9%, to 4327. Selling in components such as
was overshadowing a sparkling performance by
, which was up 5.7% after posting a narrower-than-expected loss and setting a 2-for-1 stock split
The broader big-cap market was faring better, with the
off 9 to 1338. The
Dow Jones Industrial Average
, meanwhile, was down 30 to 10,189, well up from its morning low of 10,103.
was the Dow's biggest gainer, rebounding 2.6%.
Unfortunately for longs, the considerable selling stocks have seen lately has failed to place the market in clear oversold territory. Technicians trying to identify support levels were less than optimistic.
"Remember how we had the 10K watch on the way up?" asked Richard Dickson, technical analyst at
Scott & Stringfellow
in Richmond, Va. "We've got it on the way down now. The S&Ps have done a whole lot better -- the next support there, which is really minor support, is at 1275. And the Nasdaq? It's still up there. We can't talk about meaningful support levels there."
It's not that the market is clearly too complacent to put in a firm bottom. The
Chicago Board Options Exchange Market Volatility Index
, used to gauge fear in the options market, was lately sitting at a top-range 29.79. To a contrarian, a VIX that high often signals that investors are scared enough to suggest a bottom is imminent. But the equity put/call ratio, another important contrarian indicator, was telling quite another story, lately reading a relatively optimistic 0.39.
"That's really kind of surprising," Dickson said of the low put/call ratio. "You'd expect to see that much higher. It has to do with the fact that we haven't gone straight down. It's been a more volatile market, which on a short-term basis creates these overbought/oversold extremes."
Despite the confusion, the tone on trading desks wasn't panicky. "It feels like your basic correction to me," said Jim Benning, a trader at
. "The Dow's down about
13% from its high. The Nasdaq's not down that much, but it's kind of sloppy."
"I think we'll have this kind of market until the Fed is done doing what it's been doing. The question is when that is."
poll shows about three-quarters of primary dealers of government debt expecting the Federal Reserve to hike rates by 25 basis points at each of its next two meetings. But the first day of Fed boss
testimony produced no hint of any light at the end of the tightening tunnel.
Greenspan will conclude his testimony tomorrow before the
Senate Banking Committee
The bond market was moving higher, with the benchmark 10-year Treasury up 26/32 to 100 28/32, putting its yield at 6.38%. The 30-year Treasury, meanwhile, was 29/32 higher to 102 7/32 and yielding 6.09%. (For more on the fixed-income market, see today's
The strength in bonds wasn't spurring any broad strength in the financial sector, despite the intense beating many banks and brokerages have taken recently. The
American Stock Exchange Broker/Dealer Index
was down 1.1%, while the
Philadelphia Stock Exchange/KBW Bank Index
was up 0.3%.
"I'm watching the financials more than anything else," said Dickson. "If we're going to bottom, we'll need to see relative strength pick up out of the bank stocks."
Biotech stocks continued to consolidate. The
American Stock Exchange Biotechnology Index
was down 3.5%.
Paper stocks, which have been whacked pretty hard thus far in 2000, were getting bids in the wake of
$4 billion acquisition of
. The acquisition values Wisconsin Rapids, Wis.-based Consolidated Papers at $44 a share. Consolidated Papers was bouncing 9 3/16, or 35.3%, to 35 3/16.
Philadelphia Stock Exchange Forest & Paper Product Index
was up 1.1%.
was getting hammered down 10, or 1.8%, to 536.
Net stocks were also under pressure, with the
TheStreet.com Internet Sector
index off 26, or 2.3%, to 1072.
Breadth was awful on moderate volume.
New York Stock Exchange:
1,073 advancers, 1,809 decliners, 569 million shares. 28 new 52-week highs, 157 new lows.
Nasdaq Stock Market:
1,551 advancers, 2,552 decliners, 1.1 billion shares. 176 new highs, 121 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.