Market Update: Dow Firmly Green, Nasdaq Reluctantly Red in Wan Trading - TheStreet

It's sunny and nice on Wall Street, so maybe people are playing hooky on this beautiful afternoon. That, in any case, would explain the modest market volume.

The

Dow Jones Industrial Average lately has stayed put firmly on the upside, while the

Nasdaq Composite Index remains barely in the red after an early-day sprint into the green.

Dow components were hogging attention all around. Over the weekend,

General Electric

(GE) - Get Report

confirmed that it had reached an agreement to buy fellow blue-chip

Honeywell

(HON) - Get Report

for $45 billion in stock. As is typically the case, the news put pressure on the buyer, while lifting the object of acquisition. GE lately was down 5.4%, or $2.81, to $49.44 and was taking away about 16 points from the Dow. Honeywell, up 8%, or $3.69, to $49.69, added about 23 points to the index.

In fact, it's been a blue-chip day generally. Three other blue-chip stocks --

3M

(MMM) - Get Report

,

Merck

(MRK) - Get Report

and

Microsoft

(MSFT) - Get Report

-- were also attracting traders' and investors' attention

3M barely beat estimates, but gave the nod that it would meet earnings expectations for its fourth quarter and next year, which was good enough for investors. The stock was lately about 1.8% higher to $88.94.

Merck rocketed up $3.25 to $85.13 on positive comments from

Salomon Smith Barney

and

PaineWebber

. Solly sweetened its rating on the stock to an outperform from neutral after the company posted better-than-expected earnings Friday. PaineWebber jacked up the company's 12-month price target to $90 from $81. Merck was offering up 17 points to the Dow's positive side.

Microsoft, 6.1% lower to $61.25, was a victim of a bit of profit taking this morning. Also, it was reported that PC sales slipped in the third quarter and orders for replacements won't rise significantly until next year. The software behemoth will be hurt because of ongoing concerns that deployment of Windows 2000 will be pushed back by companies that had expected to start using it during the fourth quarter.

Meanwhile, on the Nasdaq,

Cisco

(CSCO) - Get Report

was off 3% to $55.50 following a report in

Barron's

that the computer-networking equipment giant has been skewing its earnings reports over the two fiscal years ended July. The journal said the company has avoided $18.2 billion in costs through a sneaky accounting technique.

Barron's

has written several articles this year that are critical of Cisco's accounting practices.

Also,

Lucent

(LU)

announced it was replacing CEO Richard McGinn with former chairman Henry Schacht and warned that first-quarter earnings would come in at break-even levels, marking its fifth straight earnings shortfall. Lucent shares were trading at barely a quarter of their high for the year after the company's failure to execute its business plan despite red-hot demand for telecom equipment. The stock was off 2.7% to $22.

And

Copper Mountain

(CMTN)

, which last week reported earnings that beat estimates but warned it would miss for its fourth quarter and full year, lately was up about 13%. This morning, the company announced it reached an agreement with

Birch Telecom

to provide it with DSL equipment.

Back to top

Sector Watch

Semiconductors continued their rally of late last week, with the

Philadelphia Stock Exchange Semiconductor Index

up 3.6%.

Intel

(INTC) - Get Report

rose 1.5%,

Micron Technology

(MU) - Get Report

was up 5% and

Applied Materials

(AMAT) - Get Report

jumped 5.8%. Micron was up despite a 2001 estimate cut by

Goldman Sachs

.

Merck

(MRK) - Get Report

got the troops rallying this morning after it reported earnings that beat expectations Friday and got some positive notes from

PaineWebber

and

Salomon Smith Barney

this morning. The

American Stock Exchange Pharmaceutical Index

hopped about 3.4%.

Pfizer

(PFE) - Get Report

and

Schering-Plough

(SGP)

, which are both scheduled to report tomorrow, were rallying ahead of their announcements.

The

S&P Retail Index

was up 13.3%, but that doesn't mean all is well in the sector.

Circuit City

(CC) - Get Report

was still suffering, down 8.6%, after it said that it would report a third-quarter loss because of slowing sales.

Continuing problems in the Mideast put more pressure on oil stocks. The

American Stock Exchange Natural Gas Index

fell 0.8%, while the

Philadelphia Stock Exchange Oil Service Index

dropped 2.8%.

Back to top

Bonds/Economy

The bond market continues to improve as funds move to safe investments in the face of international unrest.

The benchmark 10-year

Treasury note was up 8/32 to 101 2/32 and yielding 5.604%.

The 30-year

Treasury bond is at 107 28/32, 15/32 higher, to yield 5.695%.

With no economic releases today, there will probably be little news to cause any change in the market's view. Mixed performance in equities and ongoing Mideast tensions are likely to continue to dominate the market's interest.

Back to top