Two indices diverged, and that made all the difference today.
Nasdaq Composite Index made some healthy gains today, while the
Dow Jones Industrial Average lagged in the downside after a promising start.
The Dow and much of the broader market had nothing to keep them motivated today.
The bad news that
didn't have the sales that many hoped for flattened Europe's major indices and the ones here. The stock closed down 8.8% to $39.31.
The news not only sent counterparts
on a downward spiral, but also its chipmaking suppliers, including
RF Micro Devices
Philadelphia Stock Exchange Semiconductor Index
ended the day off 0.5%.
Still, the tech-heavy Comp managed a rally, with such big-caps as
helping buoy the index.
Also, pulling out a surprise bounce was
, which in a postclose announcement yesterday said its fourth-quarter revenue would be on the low end of estimates. It got smacked with downgrades and negative notes from almost all the biggies, including
Credit Suisse First Boston
Salomon Smith Barney
. The stock shook them off, though, and ended the day 9.6% higher to $16.38.
had something to cheer about, despite getting pressure from
, which cut the stock to hold from add. It closed up 10.8% to $30.13, a day before the Internet portal is scheduled to report fourth-quarter earnings.
Meanwhile, on the
Big Board, beleaguered
got a break today in the form of an upgrade to strong buy from neutral at
Morgan Stanley Dean Witter
. The stock hasn't gotten much positive attention, but the firm said the market understands the risk involved with the telco and that the company's valuation is compelling. It closed up 12.2% to $22.50.
On the Dow,
, getting some lift off AT&T, and software giant
were two of the largest contributors to the blue-chip index's positive side.
Transports, and more specifically airline stocks, tanked after some negative analyst calls. The
Dow Jones Transportation Average
closed down 2.3%, with the most drag coming from
, which is American Airlines' parent, and from
, which was still reeling from yesterday's downgrade from Goldman Sachs.
American Stock Exchange Airline Index
closed off 5% after
downgraded three airlines and revised earnings estimates on four others.
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Treasury prices were mixed in late-day trading. The 30-year bond was up, but the 10-year note was down.
In economic data, the latest retail sales numbers reflect improvement over the past week. Nevertheless, the retail sales report for December, due Friday, is expected to be negative considering that auto sales finished at their lowest level in four years. The market hopes to gauge from Friday's report the alacrity with which the
Federal Reserve will make its next move.
The benchmark 10-year
Treasury note lately was down 8/32 to 105 24/32, raising its yield to 4.988%.
BTM-UBSW Weekly Chain Store Sales Index
chart ) rose 0.5% in the week ended Jan. 6 after a gain of 0.3% in the prior week. The index measures retail chain-store sales at seven of the largest U.S. retailers. It is now its highest since the week ended Aug. 12. After a lackluster sales season around Christmas, the index's rise is being attributed to favorable shopping weather in the South and the Northeast. Analysts have also been able to make an "easy" comparison to the first week of 2000, a period that was especially depressed since many people had stocked up on goods in anticipation of the Y2K problem.
Another retail sales index, the
Redbook Retail Average
chart ), registered strong gains as well, once again helped by the weather and substantial markdowns on inventories. It was 3.9% in the week ended Jan. 6. The Redbook index for January, which reflects
same-store sales at a number of department store companies, is currently running 2.9% ahead of December, exceeding the 2.3% target.
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