weak sales outlook from PC-maker
last night, and a downgrade on semiconductor-manufacturing leader
this morning were further straining nerves on Wall Street, where election uncertainty has everyone on edge.
Dow flew into the red at the open and didn't look back.
As concerns over capital spending on telecom and technology have begun to build momentum over the past month, each warning spreads further through telecom and tech. Dell's malaise was infecting all of tech this morning, as bellwether after bellwether succumbed to selling. Some of those getting hit included
, networking solutions company
and computer makers
The Dow was getting smacked by pressure in several areas. Much of it was from big-cap tech such as Intel, IBM and Hewlett-Packard, which together were slicing some 63 points off the blue-chip index. Retailing chains
were the other big drags on the index ahead of their earnings releases next week.
Dell, which fell 15% between Tuesday and yesterday's close on concerns about its earnings report, was lately off 18% and was the Nasdaq's most actively traded stock.
Morgan Stanley Dean Witter
cut its rating on Dell this morning to neutral from outperform and cut its fiscal 2002 earnings estimates to $1.07 from $1.10. Other analysts also reacted today to Dell's report.
Chase Hambrecht & Quist
cut its earnings estimates to $1.12 from $1.15 for fiscal 2002, but maintained its market perform rating.
reiterated its neutral rating.
Credit Suisse First Boston
lowered its 2002 estimates to $1.08 from $1.10, and fiscal 2003 estimates to $1.25 from $1.30.
Morgan Stanley also downgraded
this morning to neutral from outperform.
The firm also cut Intel's 2000 earnings to $1.68 from $1.70; 2001 earnings to $1.65 from $1.75. The tech giant, which manufactures chips for PC-makers such as Dell, was losing ground in midmorning trading, down $3.69 to $37.69, a 9% loss.
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Those stocks that are seen as favored by a Bush win in the White House remained in the green today, including the drug, biotechnology, tobacco and energy sectors. The
American Stock Exchange Pharmaceutical Index
was up 0.8%, the
Nasdaq Biotechnology Index
was 0.4% higher, the
American Stock Exchange Tobacco Index
was smoking higher, up 0.6%, and the
American Stock Exchange Oil & Gas Index
was lifting 0.8%.
The brokerage stocks were faring miserably today, though the banks and insurance companies were relatively strong. The
American Stock Exchange Broker/Dealer Index
was down 1.5%, while the
Philadelphia Stock Exchange/KBW Bank Index
was down 0.1%, after briefly soaring. The
S&P Insurance Index
was up 1.3%.
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Bonds opened marginally firmer today with recent economic data providing a supportive environment and concerns about the equities markets encouraging a move to safety. Nervous equity markets are likely to drive the bond markets.
The benchmark 10-year
Treasury note was lately at 99 14/32, down 4/32, to yield 5.825%.
Treasury bond was at 105 5/32, down 10/32, to yield 5.881.
No market-moving economic data are due today.
Consumer Sentiment Index
chart ) for November came out at 10 a.m., revealing that consumer sentiment rose to 107.7 vs. expectations of 105.1.
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