Market Update: Dow Inches Higher at Midday; Nasdaq Comfortably in Green - TheStreet

Market Update: Dow Inches Higher at Midday; Nasdaq Comfortably in Green

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Blue chips were gasping for a comeback around midday after slipping as much as 76 points in the first hour of trading, while tech stocks continued to sport solid gains. The

Dow Jones Industrial Average was lately up 4 to 11,199, while the

Nasdaq Composite Index was up 53 to 3949.

Following yesterday's 2.1% slip and last week's 6% plunge, the Nasdaq was looking pretty beat up, and money managers were fishing for some good deals.

Both the

S&P 500

and the

Russell 2000

remained near break-even around midsession, up 0.3% and 0.3%, respectively.

Dow component

Hewlett-Packard

(HWP)

was on the downside once again, lately losing 2.7% after yesterday's 5.8% dip on news it is considering acquiring

PriceWaterhouseCoopers'

consulting arm.

Bear Stearns

said Monday that the computer maker "could be under pressure near term" as a result of the acquisition.

Bear Stearns maintained its buy rating, however. H-P was taking about 14 points off the Dow.

But

J.P. Morgan

(JPM) - Get Report

, which was earlier slashing big points from the Dow, had done an about face and was lately up $4.81 to $173.63. The wild swings in the stock are probably related to the spate of merger and acquisition news and rumors that have crowded the financial sector of late. The latest item on the list was news that Germany's

Dresdner Bank

is in talks to acquire U.S. investment bank

Wasserstein Perella

.

TheStreet.com/NYTimes.com

joint newsroom wrote about the talks in a

separate story .

Internet stocks were enjoying some green, with

TheStreet.com Internet Sector

index up 18 to 816.

Elsewhere, jitters about oil prices and slowing profit growth at large corporations are making investors edgy. Don't expect any mercy for companies warning about earnings and revenue shortfalls. The latest textbook cases include

National Steel

(NS) - Get Report

down 10.5%,

Leggett & Platt

(LEG) - Get Report

down 18.9%, and today's favorite whipping boy

PRI Automation

(PRIA)

, lately getting punched 41.7%. These companies each had a less-than-sunny earnings forecast to report last night.

Then again, good news doesn't seem to be a guarantee of anything either. Check out sunglass and sportswear maker

Oakley

(OO)

, which said yesterday it would beat third-quarter earnings and post a hefty gain in net sales. After a pop in after-hours trading last night, the stock was getting hit 11.1% today. So much for fun in the sun.

Sector Watch

Oil stocks were taking a breather after rising sharply yesterday on sentiment that

OPEC's

800,000 barrel-per-day increase is not enough to cool prices down. President Clinton expressed concern about a winter fuel supply crunch and said he is keeping an eye on the oil market to see how it reacts to OPEC's decision. Crude oil for October delivery popped to $35.50 a barrel this morning. Still, after a heady runup in recent months, the stocks were in need of a rest. The

American Stock Exchange Oil & Gas Index

was inching down 0.7%, while the

Philadelphia Stock Exchange Oil Service Sector Index

was down 0.8%.

Bear Stearns' group initiation on Internet stocks was having a mostly positive effect, with the

TheStreet.com Internet Sector

index, or DOT, up 2.2%.

About.com

(BOUT) - Get Report

,

InfoSpace

(INSP) - Get Report

,

Lycos

(LCOS)

and

Yahoo!

(YHOO)

were started with buy ratings.

Amazon.com

(AMZN) - Get Report

was rated attractive. Yahoo! was performing best out of the bunch, lately up 2.9%.

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Bonds/Economy

Treasuries are lower on little news. With no major economic releases on the calendar, bond traders are keeping an eye on oil, which is lower so far, and on the corporate bond calendar, which is unusually heavy. Heavy corporate bond issuance can put pressure on Treasury prices.

A couple of

Fed

governors have piped up at the

National Association for Business Economics

conference underway in Chicago, but their comments largely cancel each other out.

Uber-dove

Robert McTeer

, president of the

Dallas Fed

, in an interview in today's

Wall Street Journal

, raised the specter of interest-rate cuts, assuming that energy prices peak and the inflation rate declines. But

Chicago Fed

President

Michael Moskow

in comments to reporters this morning said the risk of too-high inflation is still greater than the risk of too-slow growth.

Neither McTeer nor Moskow is a voting member of the

Federal Open Market Committee this year.

The 10-year Treasury was lately down 2/32 at 99 23/32, pushing its yield to 5.786%.

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