(Updated from 10:48 a.m. EST)
A bit of sweet Valentine's loving that was pulsing through tech stocks early this morning faded after investors caught wind of some bad news for a few stocks. The Dow, however, was charging higher; for a time, it was logging triple-digit gains, though it was lately off session highs.
Nasdaq was lately hopping around the flatline and semiconductor stocks, often seen as key tech leaders, were up. The
Philadelphia Stock Exchange Semiconductor Index
was 3.6% higher. Oh, and biotech was getting a lift, perhaps on news that
seems to have a stronger gene map project than its public group competitor
Human Genome Project
. The official findings won't be published until later this week. The
Nasdaq Biotechnology Index
was up 2.2% and Celera was rising 11.8% to $44.75.
Breadth had lately improved on the New York Stock Exchange, but on the Nasdaq, advancers and decliners were about even, with the latter just marginally outnumbering the former. For the most part, investors were sitting this session out and volume was about as meaty as
The broader market
S&P 500 had lately turned up, while the blue-chip industrial
Dow was muscling ever higher.
was finally stemming a recent slide. The stock was just barely higher, up by 2.4% after a three-day selloff sparked by a
warning about softer sales growth last Tuesday after the market closed. The kid remained a favorite trade among tech investors, and, for the fourth day in a row, it was one of the most actively traded stocks on the Nasdaq.
Now for the bad news.
was spinning lower, down 48.3% after warning in a Webcast this morning that it would miss estimates for its fiscal third-quarter, which ends in March. The data storage company blamed order delays from customers and said if the trend continues, earnings for the quarter could be hurt. Some have speculated that the data storage companies are the most
immune of tech companies in an economic slowdown.
And the contract manufacturing sector wasn't faring too well after
to buy from strong buy and
to market perform from strong buy. Jabil was off 4.3%, Plexus was falling 7.1%, SCI Systems was down 1.9%, and DDi was falling 3.1%.
Lehman also extended its per share loss estimate for
to 67 cents from 50 cents in 2001, pushing the blistered and beaten stock down a further 1.3%.
Analysts were also negative on applications software maker
and long-suffering Internet consulting firm
The Dow was moving higher on strength in retailer
Johnson & Johnson
, which together were giving the index a 30 point lift. After being one of the weakest components early on,
had lately turned around, and was the third-best performer on the index, adding 11 points of upside.
In the past two weeks, markets have generally been plodding lower on low volume. In fact, the market closed last week pretty down and out, having erased most of its January gains. Up near 14% at the end of January, the Nasdaq was up just 2% as of Friday. The Dow was flat for the year as of Friday's close, though so far today it is making another good stab toward 11,000.
Still, recent economic data and earnings reports suggest the tunnel may be longer and the light further off than Wall Street thought. Some companies have recently expressed doubt that things will pick up in the third quarter -- Cisco being just one of many.
Go Al, Go!
Investors are probably playing it safe ahead of
Federal Reserve Chairman
Humphrey-Hawkins testimony before Congress tomorrow. That's his twice-yearly chat with elected officials about the state of the American economy, and Wall Street may be hoping for something encouraging.
But most economists don't expect anything new. Greenspan will probably reiterate that the economy is slowing and that he's willing to do whatever it takes to keep growth around 4%.
After the Fed cut interest rates twice in January -- two half-point cuts left the lending target at 5% -- investors are hoping for more aggressive action so the economy can get back on its feet. Aggressive means at least a half-point cut at the Fed's next meeting on March 20, and some even hope for an intermeeting cut before then.
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Financials were mixed today, with investors favoring bank stocks over brokerages. The
Philadelphia Stock Exchange/KBW Bank Index
was lately up 1%, while the
American Stock Exchange Securities Broker/Dealer Index
was off just 0.2%.
Telecommunications stocks were coming back a bit from a two-week slide. The
Nasdaq Telecommunications Index
was 0.5% higher.
was up 3.6% after losing 8% Friday when
pulled it from its recommended list in Europe.
was 3.2% higher, and
was up 3.4%.
Some defensive names were doing well despite the turn in the market -- drugs were up, with the
Amex Pharmaceutical Index
was 0.6% higher. The
S&P Tobacco Index
was also higher, up by 0.9% to 351.77, a 52-week high.
, which has been hitting new 52-week highs since November of last year, was lately off 0.2% to $47.93.
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Treasury prices are mixed, with the long bond and the 10-year note dipping, but the shorter notes unchanged or slightly positive With no economic news due today, the money market is likely to respond mostly to equity movements. Traders are also awaiting
Federal Reserve chairman
Alan Greenspan's address before the
Senate Banking Committee
tomorrow. They hope that the central bank chief will reiterate the need for more interest rate cuts to boost the economy.
The benchmark 10-year
Treasury note lately was down 2/32 at 99 23/32, increasing its yield to 5.038%.
Cathy Minehan, President of the
Boston Federal Reserve Bank
and a voting member of the Fed's monetary policy committee, said today that the Fed's 100 basis-point lowering of interest rates in January is already producing encouraging results. She predicted that
gross domestic product
) growth this year should be around 2%. Echoing recent statements by Greenspan, Minehan asserted that inflation was "well behaved." This was good news to Fed watchers, since figures released last week showed unit labor costs on the rise, usually perceived as inflationary.
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