The "duck and cover" mentality that gripped the market was beginning to subside somewhat as stocks attempted to repair some of yesterday's damage. But the harried Nasdaq Composite Index remained huddled under its desk with hands on head, suffering deep losses again.
Dow Jones Industrial Average
was showing conviction, lately up 181, or 1.8%, to 9992, after spending a good deal of the morning swinging indecisively. The blue-chip measure's rise stemmed from strength in
, up 5.2%, and
Johnson & Johnson
, lifting 5.5%.
Meanwhile the Nasdaq Comp was down 102, or 2.2%, to 4604. In the early going, the tech-infused Comp looked like it was going to fight the selling power that pummeled it yesterday. It gained more than 50 points before investors decided to turn up the downside pressure.
Yesterday's 200.61-point drop in the Nasdaq marked the second-worst point drop in the tech-laden index, second only to the damage
Jan. 4, when the Comp shed 229.46 points. The back-to-back selloffs yesterday and
Monday knocked the Nasdaq down 6.8%, and if it closed around its current level, it would be off 9.4% -- close to Wall Street's traditional 10% correction benchmark.
"People are catching their breath. Money is going into selective situation stocks across the board," said David Baker, head of program trading at
. He characterized the market as "extremely choppy, with good volume but low liquidity."
Internet stocks were taking it on the chin, with
TheStreet.com Internet Sector
index down a massive 68, or 5.3%, to 1205. It has traded as low as 1188.61.
was falling 4%, following reports that it was holding talks with
, down 5.6%. Chip stocks were also hurting, with the
Philadelphia Stock Exchange Semiconductor Index
"There are excesses within the stock market,
although some of that was worked off yesterday," said Marshall Acuff, portfolio strategist at
Salomon Smith Barney
. There is room for further excess to be taken out of the market, he said.
Leading the downside in tech stocks was
, an e-commerce software concern, which darkened 43 15/16, or 17.7%, to 205 after it said it is buying privately held
for a little more than $3 billion in stock.
The biotech sector was showing signs of life after yesterday's pummeling, with the
American Stock Exchange Biotechnology Index
gaining 2.1% on the heels of yesterday's 13.2% slide. The
Nasdaq Biotechnology Index
was also feeling a little healthier today, rising 3.1%. The biotechs that were beaten the worst were enjoying the relief.
was up 9.8%, thanks in part to an upgrade to strong buy from buy at
Credit Suisse First Boston
, which thought yesterday's selling was overdone. The firm set a target price of 105 on Amgen.
Protein Design Labs
was down 3.7%, its earlier rise no consolation to those who felt the pain of its 24% drop yesterday.
was also lower, off 14 1/2, or 2.5%, to 558 1/2, while the broader
was solidly in the green, up 18, or 1.4%, to 1378.
Cyclicals, including paper stocks, transports and financials, were all putting in a solid showing today with the
Dow Jones Transportation Average
up 3.8%, the
Philadephia Stock Exchange Forest & Paper Products Index
up 4.5%, and the
Philadelphia Stock Exchange/KBW Bank Index
The scattered action and volatility is sure to continue as attention turns to the readings of inflation reports set for release Thursday (the
Producer Price Index
) and Friday (the
Consumer Price Index
). Deutsche's Baker also points out an options and futures expiration coming up Friday, which may cause people "to take a step back because of potential volatility."
Investors also have a
Federal Open Market Committee
meeting and all-but-certain 25-basis point rate hike to look forward to next week. "So long as the
is turning the screw, there is not likely to be to be a sustained advance," said Acuff.
The 10-year Treasury was up 7/32 to 101 23/32, its yield at 6.26%, while the 30-year Treasury was up 16/32 to 102 21/32, its yield at 6.06%. (For more on the fixed-income market, see today's
Breadth was positive on the Big Board but negative on the Nasdaq, on fairly heavy volume.
New York Stock Exchange:
1,548 advancers, 1,307 decliners, 705 million shares. 14 new 52-week highs, 109 new lows.
Nasdaq Stock Market:
1,295 advancers, 2,782 decliners, 1.2 billion shares. 37 new highs, 131 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.