The market had a lot to digest this morning, and it wasn't delicious feasting. So much for the historical low volume and strong performance that usually graces the markets during Thanksgiving week.
Nasdaq Composite drove back below that psychologically key level of 3000 at the open, dragged down by bad news for
and some negative analyst calls on
, networking giant
and Cisco competitors
A more conservative EPS forecast for the
S&P 500 from
Jeffrey Applegate was also pressuring the market. The S&P 500, which is designed to include the leading companies from a broad cross-section of the economy's leading industries, was falling 1.4%.
Applegate, who has been bullish on the stock market since March, said he recognizes that his stance has been misplaced, but doesn't expect recent action to serve as a "prologue" for the market. Applegate remains bullish on what's to come, but says his earnings growth estimates were a little too optimistic. The strategist cut his third-quarter S&P EPS growth to 10% from 13%, but maintained his 2001 price-target of 1800 on the S&P. Meanwhile, he thinks treasuries will continue to perform well and transferred the 20% he had in cash into bonds.
The Nasdaq's most actively traded stock, software leader Oracle was down 13.2% after the company announced that Executive Vice President Gary Bloom is leaving to become CEO of
. There had been some talk that Bloom was next in line to become the company's CEO. For more on this, take a look at a
separate story from
. Oracle was downgraded on the news this morning.
This morning's other fatalities include online auction house
and the whole networking sector.
dropped eBay to a neutral rating from buy. Last month, eBay reported strong third-quarter earnings and was upbeat about its outlook for coming quarters -- quite an anomaly in the Internet world. Lehman's influential analyst, Holly Becker, wrote that she is concerned that eBay's core business is slowing. She also wrote that the company's aggressive 2005 sales projections may cost more money and require more time than eBay had projected.
And the networkers were all in a hole, led by Juniper Networks, which was down 15.8%. Juniper, Cisco and Redback Networks were slapped with a negative call from
Morgan Stanley Dean Witter
this morning. MSDW cut its ratings on Juniper and Redback to outperform from strong buy and lowered its price target on Cisco to $75 from $90.
Over on the
Dow, it was the financials and bricks-and-mortar industrials that were doing the most damage.
was slashing some 30.7 points from the Dow. Other heavyweights to the downside were
, with 14 points of downside, and
, cutting 13.3 points.
Financials may have been suffering in sympathy with
Bank of America
, which was downgraded this morning by
Credit Suisse First Boston
. CSFB cut the bank's earnings per share estimates for the fourth quarter to $1.13 from $1.33.
Meanwhile, investors everywhere are likely trying to guess the next bottom. Wall Street's confidence that the market had finally hit its true "bottom" was shaken last week after the Nasdaq fell below 3000 to a new closing low for the year of 2966.7.
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Energy stocks, drugs and utilities were just about the only sweet spots in today's market, as investors scrambled to take their money out of tech and financials.
Brokerages and the biotechs and the e-commerce indices were some of the market's worst performing. The
American Stock Exchange Broker/Dealer Index
was off 3.9%, the
Nasdaq Biotechnology Index
was 4.3% lower and the
TheStreet.com E-Commerce Index
was losing 5.3%.
Some of this morning's winners in drugs were
American Home Products
, up 2.7%, 0.9% and 1.4%, in that order.
Dow Jones Utility Average
was 0.2% lower and the
American Stock Exchange Oil & Gas Index
was up 0.3%.
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Bond prices were rallying this morning after selling off on Friday. The benchmark 10-year
Treasury note was up 7/32 at 100 17/32, yielding 5.677%.
Bond prices fell Friday with long-maturity issues falling for the first trading session in five sessions, in what market-watchers said was partly a response to the prospect of a
George W. Bush
presidency and partly just profit-taking.
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