(Updated from 4:05 p.m. EDT)
The stock market is limping into the home stretch. Pressure was applied from semiconductor and bank stocks.
Following morning downgrades on semiconductor manufacturers
, chip stocks are getting absolutely crushed. Xilinx was down 21.1%, even though the company issued a press release this afternoon that says it is comfortable with its current earnings forecasts. Altera has shed 27.1%.
After having led the market on its way up through the early part of this year, semiconductors are now marching the technology arena down. The
Philadelphia Stock Exchange Semiconductor Index
was down 10.1% today. Lately, the index was trading at levels not seen since the very beginning of the year.
And the Nasdaq, were it to close at these levels would reach its lowest point since May 26.
A massive shake-out, in some ways worse than what happened in the spring, has taken place in September and early October, as investors make an effort to revalue their lofty expectations for technology stocks. The mood of pessimism has been going strong for several weeks running.
Right now, the expectation is for slower economic growth and, by extension, diminished corporate earnings. Until earnings reports refute that notion (or at least provide solid evidence of a true soft landing) this
topsy-turvy environment isn't likely to end.
, the Internet commerce and portal grand Poo-Bah , is expected to report earnings after the close today. As one of the most well-known Internet names, the company's earnings will serve as a bellwether for forthcoming reports from other companies in that sector. Yahoo! was down 3.6% to $82.69.
Meanwhile, the brokerages and banks were getting hurt again on continued concerns that banks had weakened earnings and were hit by poor underwriting in the third quarter.
Morgan Stanley Dean Witter
, tagged last week on
worries of losses in the junk bond trading unit, got smacked again today, off 10.2% to $74.75. The
American Stock Exchange Broker/Dealer Index
lately shed 2.9%.
were also weaker.
Not every sector was in poor shape. Oil prices moved higher again, and the
Philadelphia Stock Exchange Oil Service Index
was up 3.1%; Dick Cheney's old haunt
was up 3.7%.
hit at a new high earlier today, and was lately up 2.4% to $93.31, leading the
American Stock Exchange Oil & Gas Index
to a 2.4% gain.
Other defensive sectors were doing well also. (Defensive, of course, is a relative word -- it's not like these are bonds or anything.) The
Amex Pharmaceutical Index
lately rose 2.3% and the
Dow Jones Utility Average
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Bond prices are nearly unchanged, rebounding from earlier losses as a result of weakness in the equity market. Treasuries earlier fell under pressure with oil trading at a two-week high in response to strife in the Middle East and falling temperatures. Rising oil prices alarm bond investors by threatening to lift the overall inflation rate. Lately, the market has rallied back, as investors move some money from stocks to the relative safety of bonds.
Treasury Securities are also concerned about a possible onslaught of new corporate bonds, which compete with Treasuries for investor dollars.
are all expected to float multi-billion dollar bonds before the end of the year. The Unilever deal is expected by the end of next week. The timing of the rest is uncertain, but they are considered likely to come this month.
The benchmark 10-year
Treasury note lately was 3/32 higher at 99 21/32, yielding 5.797%.
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