The market was waiting for something fundamental, something economic, something global -- something real. Just so happens, it got
Astoundingly adept at shrugging off
troubles, earnings nerves, Asian uncertainty,
-branded froth oozing out of the Internet sector, the U.S. stock market decided to retreat from this year's relentless traveling skyward on news of a de facto devaluation of Brazil's real.
But not by anywhere near as much as one might have thought at the open.
"I thought we'd see a 300-, 400-point decline," said Jim Volk, co-director of institutional trading at
in Portland. "I thought we'd see a decline, rally, then strong selloff again, but we've held on pretty well."
Brazil's central bank said it would remove the real's mini-band -- the range in which the bank tried to keep the currency trading -- while broadening the maximum range in which it would trade, essentially devaluing the currency about 9%. The country's central banker,
, resigned on the news.
stock index lately was down 6.8%, following a trading halt. Bellwether
recently was down 7.9%, off its session low of 50 1/8.
Back in North America, the
Dow Jones Industrial Average
was down 134 to 9341, off today's low of 9213.10.
were showing mild strength amid the majority of Dow securities flashing red like ambulance lights.
Displaying a more impressive comeback was -- guess -- Its Majesty, the
Nasdaq Composite Index
. The techified index lately was
a fraction to 2321, making no acquaintance with the session low of 2206.19.
was consistently answering
to a question akin to asking
Who's on first?
on Wall Street: Do earnings matter? The chip maker was up 2.7% after last night's blowout earnings report. (See more on the report below.)
Elsewhere in tech, the
Morgan Stanley High-Tech 35
was slipping 0.7%, the
Philadelphia Stock Exchange Semiconductor Index
was gaining 3.2% and
TheStreet.com Internet Sector
index was losing 1.7%. At midday,
marked a dizzying session high of 406 and low of 332. Of late, the Internet portal -- whose blowout earnings reported last night apparently were priced into the stock already -- was down 2.2%.
was down 6 to 1233, and the small-cap
was down 3 to 424.
Market internals were decidedly negative on powerful volume. On the
New York Stock Exchange
, decliners lead advancers 2,163 to 807 on 558 million shares. The downs had the ups 2,579 to 1,258 on 691 million shares in
Nasdaq Stock Market
Following yesterday's Japanese intervention, the bond market was enjoying flight-to-quality gains. The 30-year Treasury was up 1 5/32 to 101 17/32, dropping its yield to 5.15%. (For more on the fixed-income market, see today's early
With those relatively tame index losses, traders' minds were still free to chat about the day's other news: What's up with
waiting until after the lockout?
"These days, even 300 points is not that much of a move for the Dow," said Volk, describing the market's mood as one of "caution and concern -- there's no panicking."
"We've still got money on the sidelines," Volk went on. "Concerns about fourth-quarter and first-quarter earnings have gone away. And, as we've seen from the
figure, the unemployment number, the nonfarm payroll, inflation is low. This is a healthy correction in a continuing upward movement."
-- the latter to be bought by
for $20 billion -- Volk said there was still some strength left in technology.
"This is obviously all a knee-jerk reaction to Brazil," he continued. "Things aren't so good in Hong Kong, either. But we started the year off with the euro, the solid money flow into the markets, the momentum of buying in the Net stocks, strong gains five or six trading days in a row, going up 400 points. We adjusted yesterday with some profit-taking and on rumors that now have come true about Brazil."
Calling for a near-term 9000 on the Dow before another leg upward, the trader said at this point he believes the bull market is not in any jeopardy. "We still have to see what kind of earnings power there is in the second and third quarters. Something like 20% of America's business comes from Latin America, and a big chunk of that comes from Brazil. And of course, will it spread? We had this Asian contagion a year ago. There is the danger that could happen here. And there are still pockets of danger in China and Japan."
Wednesday's Midday Movers
Aaron L. Task
Not surprisingly, Brazilian ADRs were among the hardest hit names this morning.
was down 6 3/16, or 9.9%, to 56 1/8,
was off 1, or 11.8%, to 7 1/2,
was off 1 3/4, or 13.4%, to 11 5/16,
was lower by 2 7/16, or 13.9%, to 15 1/8, and
was lower by 1 9/16, or 12.7%, to 10 3/4.
Telefonica del Peru
was down 1 5/8, or 12.5%, to 10 15/16 and Argentina's
Banco Rio de la Plata
was off 1 1/4, or 12.2%, to 9.
Meanwhile, back at the ranch know as America, the faith in big technology appears unshaken, especially when the earnings news is good.
Intel was lately up 2 7/8, or 2.1%, to 138 9/16 after
last night posting fourth-quarter earnings of $1.19 a share, 12 cents higher than the 31-analyst consensus and above the year-ago 98 cents. The company said it sees its first-quarter gross margin falling slightly below the fourth quarter's 58% because of seasonal factors.
upped its recommendation to buy from market perform and
Credit Suisse First Boston
lifted its price target to $180.
Seagate was up 2 5/8, or 6.7%, to 41 9/16 after it posted second-quarter earnings of 42 cents a share, well in excess of the 11-analyst forecast of 26 cents and the year-ago loss of 8 cents.
Yahoo! was struggling to stay positive but has clawed a long way back from its initial decline to as low as 332. The stock reached as high as 406 but lately was off 11 15/16, or 2.9%, to 389 3/16. Last night, the firm reported fourth-quarter earnings of 21 cents a share, topping the 24-analyst forecast of 16 cents and the year-ago 2 cents. The company also announced a 2-for-1 stock split.
BT Alex. Brown
cut its recommendation to buy from strong buy.
Donaldson Lufkin & Jenrette
upped its six-to-12 month price target to 500 (presumably on a pre-split basis).
Other Internet names continue to pad the list of big percentage losers, including
, off 32 7/8, or 14.8%, to 189 and
, down 4 1/16, or 10.4%, to 35 1/16.
was down 1 5/8, or 13.2%, to 10 3/4 after posting first-quarter earnings of 16 cents a share, a penny ahead of the five-analyst call for a repeat of the year-ago 15 cents.
was down 1 5/8, or 13.4%, to 10 1/2 after warning it sees a fourth-quarter loss of 21 cents a share after establishing a $1 million reserve to cover past-due bills. The five-analyst estimate called for a loss of 14 cents.
was down 1 5/8, or 17.6%, to 7 3/4 after warning its fourth-quarter earnings would be 8 cents to 10 cents a share. The nine-analyst view was for profits of 13 cents.
was down 4 3/16, or 11.4%, to 32 5/8 after it announced a fourth-quarter loss of 53 cents a share, wider than the five-analyst forecast of a loss of 47 cents and the year-ago loss of 11 cents.
was up 8 15/16, or 10.3%, to 96 1/8 after it reported second-quarter earnings of 59 cents a share, 2 cents above the 17-analyst outlook and above the year-ago 55 cents. The company also set a 2-for-1 stock split.
In other news:
was up 1 15/16, or 97%, to 4 after the healthcare information concern said it will focus on electronic commerce between physicians and hospitals and change its name to
was down 2 1/4, or 3.2%, to 67 13/16 after saying last night it was not consulted when
LVMH Moet-Hennessy Louis Vuitton
9.5% stake in Gucci. Louis Vuitton was down 2 1/8, or 4.5%, to 45 3/8.
was up 1 15/16, or 15%, to 15 after a
Food and Drug Administration
panel recommended approval for the company to sell its nearsightedness product,
Lucent was down 4 15/16, or 4.6%, to 102 15/16 while Ascend was up 4 1/4, or 5.7%, to 79 1/8 after Ascend agreed to a $20 billion stock buyout offer.
Morgan Stanley Dean Witter
upped its rating on Lucent to strong buy from outperform.
was up 5 1/2, or 99%, to 11 1/16 after announcing it will market its computer training products through
was bucking the trending the morning, lately up 1 5/16, or 6%, to 23 5/16 thanks to a bullish Heard on the Street article in
The Wall Street Journal