Market Update: Comp Ends Day Off Lows, but Below 3000; Dow Also Ends in Red

<LI>SOX shrugs off H-P's woes.</LI><LI>Weyerhaeuser, Willamette merger proposal boosts paper products index.</LI>
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This morning, the markets looked miserable and irretrievable -- at least for today -- but less than 20 minutes before the close, the Nasdaq Composite Index looked like it was back and the Dow Jones Industrial Average was nearing the flatline. But, by the end of the day, both the Dow and Comp ended in the dumper.

The Comp ended below 3000. The Dow was no slouch either.

Election uncertainty was blamed for market woes last week, but many said the election was an excuse, and that the real issues were slowing growth and earnings concerns.

Today, earnings troubles from

Hewlett-Packard

(HWP)

bore the brunt of the blame for the earlier sour markets.

Right at the opening bell, H-P socked the markets. It lately fell 12.8% to $34.13. Earlier today, the computer-maker reported that it

missed fourth-quarter earnings by 10 cents. Estimates were for 51 cents a share. H-P hadn't been scheduled to announce earnings until Wednesday. The missed earnings follow the company's announcement on Sept. 22 that it would meet those

fourth-quarter earnings and revenue targets.

H-P

fell 6% when it initially announced in early September that it was seeking

PricewaterhouseCoopers'

consulting business. Then, on Halloween, H-P's respected chief executive, Carly Fiorina, said the company was

reconsidering the price and even the purchase of the consulting unit. Today, the company said it has ended those acquisition talks.

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While the bad news seemed to bleed into most sectors, semiconductors were able to rally. The lately oversold

Philadelphia Stock Exchange Semiconductor Index

, also called the SOX, was up 4.3%. Component

Applied Materials

(AMAT) - Get Report

was smacked down with its EPS view for 2001 cut by

Credit Suisse First Boston

, but the firm, along with

SG Cowen

, said Applied Materials' fourth-quarter EPS should meet expectations.

SOX and Dow-component

Intel

(INTC) - Get Report

was one of the blue-chip sector's shining stars. It added about 8 points to the index.

IBM

(IBM) - Get Report

handily shook off H-P's news and contributed 27 points to the Dow.

The Comp did get some non-tech help today.

American Freightways

(AFWY)

rose a whopping 57.9% on news that

FedEx

(FDX) - Get Report

would buy the company for about $950 million.

Also,

USFreightways

(USFC)

jumped 6.3% after CSFB upgraded it to strong buy from buy.

Sector Watch

The

Philadelphia Stock Exchange Forest & Paper Products Index

bounced 3.9% on news of a proposed merger between two of the stocks in the index.

Weyerhaeuser

(WY) - Get Report

has offered to buy

Willamette

(WLL) - Get Report

in a $7 billion cash deal, including $1.7 billion worth of Willamette's debt. Willamette's board met but didn't act on the proposal. Still, Willamette shot up 32.2% to $48.94. Weyerhaeuser was off 2.8%.

With most other sectors of the market in the red, financials were in a particularly bad way. The

American Stock Exchange Broker/Dealer Index

was down 2%, while the

Philadelphia Stock Exchange/KBW Bank Index

fell 1.9%. The

S&P Insurance Index

lost 1.8%.

J.P. Morgan

(JPM) - Get Report

was off 1.8%.

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Bonds/Economy

Bonds were maintaining their positive tone of last week because the fixed-income market is benefiting from a run of soft economic data, the rush away from equities and the stalemate in Florida.

The benchmark 10-year Treasury note was at 99 27/32, down 1/32, to yield 5.770%.

The 30-year Treasury bond was at 105 25/32, up 2/32, to yield 5.837%.

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