Dow Jones Industrial Average was working on gaining back the 240 points it lost Friday.
Nasdaq Composite Index, however, had lost earlier gains and was lately in the negative. The broad market, as tracked by the
S&P 500, lately was rebounding after hitting its closing low for the year Friday.
The market was being buoyed by a story in
The Wall Street Journal
this morning, which said the
Federal Reserve might get really aggressive and announce an interest-rate cut tomorrow instead of waiting until January. The market, however, is pricing in only 46% odds of a rate cut tomorrow, up from 41% Friday. The article helps soften the blow of whatever announcement comes out of the
Federal Open Market Committee meeting tomorrow.
Big Al gave a
speech to the
America's Community Bankers Conference
on Dec. 5 -- in which he acknowledged that the past six interest rate hikes had worked and resulted in a visibly slowing economy -- the belief has been widespread that the Fed would say the risk of inflation doesn't exceed that of recession. If Greenspan and his wild and crazy crew decide to adopt an easing stance, it would most likely lead to an interest rate cut next month.
The Dow was being pushed up by financials (read: interest-rate sensitive stocks)
was a big blue-chip contributor after it announced a $365 million deal with Chile's leading airline
Luxury goods company
LVMH Moet Hennessy
submitted a bid for high-end clothing maker
. Donna Karan shot up 74.4%, while LVMH was inching up 0.5%.
Now here's a shocker. There were more earnings warnings attracting attention. Let's start with online toy retailer
, which was the latest Internet company to warn that it's having problems. It was plummeting 69.7% to 28 cents. The company said third-quarter earnings would fall well short of expectations and that it was looking into a merger, asset sale or other type of restructuring in an effort to stay afloat. And as if eToys needed any more pain, its rating and loss estimates were placed on review at
cut eToys' rating to sell from accumulate. Investors didn't seem to need the encouragement.
Tech stocks were getting whacked after
cut a slew of Internet companies, including eToys, which had its earnings expectations and ratings trimmed. Goldman also slashed estimates on
, citing poor retail trends.
TheStreet.com Internet Sector
index was off 2.7%.
It maintained estimates on
In a separate move, Goldman removed e-business softwaremakers
from its recommended list because of concerns about potential 2001 budget cuts. BroadVision and Blue Martini were down.
is off 11.3% after saying it is reducing growth expectations for earnings before interest, taxes depreciation and amortization to 11% for full-year 2000, from an earlier projection of 12% to 13%. The media giant in part blamed weakness in advertising on its cable network and weaker than anticipated music sales. Time Warner's merger with
got a boost last week when the
Federal Trade Commission
gave its approval to the deal. AOL was losing 12.1%.
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Rising natural gas and oil prices were boosting energy sectors. The
American Stock Exchange Natural Gas Index
was up 3%, while the
Philadelphia Stock Exchange Oil Service Index
was rising 7.8%.
Anticipation of a Fed change had financial sectors rallying. The
American Stock Exchange Broker/Dealer Index
was up 3.2%, while the
Philadelphia Stock Exchange/KBW Bank Index
was moving up 4%.
Philadelphia Stock Exchange Semiconductor Index
, which tracks the chip sector, was 0.9% higher.
was the sector's biggest help, up 7.4%. The
International Trade Commission
announced that it would investigate claims that
is importing products that infringe upon three Xilinx patents. Altera was also gaining, up 2.5%
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The benchmark 10-year
Treasury note lately was 15/32 higher to 104 24/32, yielding 5.123%.
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