Market Update: Dow Edges Toward 11,000 in Late-Day Trading

<LI>Nasdaq in red-tinged limbo.</LI><LI>Drug stocks thriving.</LI><LI>VA Linux plummets 41%.</LI>
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No one told the

Dow Jones Industrial Average that there's an election tomorrow. The major market barometer was up strongly -- nary a pre-election jitter in sight -- with just two hours until the trading bells go ding-ding and all those traders go bye-bye. Tomorrow, all those voting machines go clang-clang, and the new President thanks America.

The Dow's been rampaging all day long. Right after the open, it spent a grand total of three minutes in the red and then took off like Evel Kneivel with a brand-new death wish. By 1:10 p.m. EST, the Dow briefly touched the magical 11,000 barrier. That's much better than that freakish mid-October slip below 10,000, now isn't it?

Certainly is. The Dow components were either very strong, posting some nice gains, or barely lower. Twenty-three of the 30 blue-chips were positive, with

J.P. Morgan

(JPM) - Get Report

leading the way, adding 23 to the Dow's gain.

General Motors

(GM) - Get Report

,

IBM

(IBM) - Get Report

,

Merck

(MRK) - Get Report

,

Microsoft

(MSFT) - Get Report

and

United Technologies

were also quite good.

The

Nasdaq Composite Index

started with a nice gain, at one point nearly 30 points into the plus side, but then it dropped into the red at midmorning and has been wrestling with its opening number. At publishing time, it couldn't shake out of the red.

It's been a pretty break-even day overall on the Nasdaq. Losers are overpowering winners, with 20 Nasdaq issues posting losses for every 18 with gains. Volume has been brisk. As for news, well, it's all been about

Cisco

(CSCO) - Get Report

.

Tonight, Cisco will release its earnings and everyone's eyes are on the company, which has one of the largest market caps of any in the world, sharing the stage with giants Microsoft and General Motors. And given the recent earnings season, and the dreadful spate of earnings warnings that ushered it in, many investors were skittish about Cisco's fortunes. Fears are that the company will miss either estimates or the nebulous "whisper number," the unrecorded and undefined combination of expectation and rumor that hard-core street traders use to assess earnings.

Cisco was lately off 2.5%.

Elsewhere in tech, a rotting, acrid smell wafted out of the Linux sector, a non-Windows-based computing system that is Microsoft's biggest competition. The stink started earlier today when

VA Linux

(LNUX)

announced that its first quarter wouldn't really look as good as it had previously hoped. The wolves came out and devoured the company whole. It has fallen 41.5%, one of the Nasdaq's biggest busts.

The encroaching weakness in VA Linux killed the fortunes of many other Linux-related stocks.

Red Hat

(RHAT)

, which makes the Red Hat operating system, a Windows competitor, fell 7%.

Corel

(CORL)

, another Linux software maker, fell 2.3%.

Sector Watch

Big movers were in short supply, as everybody in the pool decides to tread water ahead of that little Presidential election that everyone's so darned interested in.

Financials were split this afternoon, as the insurers stay well above water and the brokers gurgle below the surface. The

S&P Insurance Index

rose 2.7%, regaining some upward momentum after last week's steady stumble. Still, insurers are in great shape, trading not far from record highs. But brokers, despite the nice 2.4% run-up in

J.P. Morgan

(JPM) - Get Report

, weren't looking so good. The

American Stock Exchange Broker/Dealer Index

fell 1.8%, as

Goldman Sachs

(GS) - Get Report

and

Lehman Brothers

(LEH)

both had terrible days.

Blow the whistle. Buddy up!

A quick "buddy check" around the good ol' free swim shows that wireless plays in the

PHLX Wireless Telecom Sector

were splashing in the loss column, along with most of the techs. Kicking stronger in the win column were drug stocks. The

AMEX Pharmaceutical Index

rose 1.3%.

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Bonds/Economy

Bonds opened slightly lower this morning in light volume, ahead of tomorrow's elections. There are no new economic data.

The benchmark 10-year

Treasury note is at 99 5/32, down 8/32, to yield 5.863%.

The 30-year

Treasury bond is at 105, 13/32 lower, to yield 5.891%.

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