Market Update: Dow Remains Positive, Nasdaq Sours Some in Late-Day Trading

<LI>Widespread strength in Dow.</LI><LI>Nasdaq falls below break-even as semis drop.</LI><LI>Retailers up in a big way.</LI>
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The first day back after a holiday weekend can be kind of rough. Especially Thanksgiving, with all that leftover food and turkey leaving people groggy. But with just two hours left in the trading day, the

Dow Jones Industrial Average was positive, albeit off session highs. Volume was slow, but blue-chip traders were making a play to go home fat and happy. The

Nasdaq Composite Index was having a more conflicted day

The Dow was lately posting near-triple-digit gains, with the majority of its blue-chips in the green. Retailers were up in a big way, due in no small part to the time of year, since the day after Thanksgiving is, as we've been told over and over again,

the biggest shopping day of the year

.

Wal-Mart

(WMT) - Get Report

and

Home Depot

(HD) - Get Report

were a dynamic duo, adding a combined 31 points to the Dow's plus side. Drug stocks were at record highs for the year.

As a whole, other retailers were following Wal-Mart's lead. The

S&P Retail Index

, which collects the biggest retailers and tracks them as an industry, was up 5%. And

Merck

(MRK) - Get Report

, less than a buck from its 52-week-high, was leading the pharmaceuticals on the upside.

J.P. Morgan

(JPM) - Get Report

led the brokers, adding 19.7 points to the Dow gain. For those of you with the play-at-home version, the

American Stock Exchange Pharmaceutical Index

was up 3%.

Meantime, the Comp was lately down modestly after spending much of the day just above the flatline. Today's erratic movement reflected a pitched battle within the Comp as some of the biggest semiconductor names weighed down the index while other issues advanced strongly.

On the plus side, battered biotechnology companies advanced. The

American Stock Exchange Biotechnology Index

rose 4.1%. The best names in the sector weren't the big fish. The small fry sizzled.

IDEC Pharmaceuticals

(IDEC)

and

Myriad Genetics

(MYGN) - Get Report

were two of the best names on the Nasdaq, while other biotech-related companies like

Lion Bioscience AG

(LEON)

,

Sepracor

(SEPR)

and

Andrx

(ADRX)

sat with better-than-$5 gains.

But (and it's a big ol' "but")...

Chipmakers got killed.

Slowing sales continue to plague companies in the market, and when

Wit Soundview

downgraded

Philadelphia Stock Exchange Semiconductor Index

component

Ariba

(ARBA)

, the SOX's fate was sealed for the day. Other analyst actions followed, and the mudslide began.

Cypress Semiconductor

(CY) - Get Report

, a smaller, less-talked-about chipmaker with a market cap just south of $4 billion (by comparison, Ariba's is almost $19 billion), got cut by

Prudential Securities

to accumulate from strong buy, with a new price target of $42, down from $75. And although the company isn't as widely held, the news that Prudential cut it on fears of an earnings slowdown was enough to rile the entire industry.

Lowered earnings forecasts at

Lehman Brothers

didn't help matters any. Lehman lowered its forecasts for both

Xilinx

(XLNX) - Get Report

and

Altera

(ALTR) - Get Report

, citing slower demand in November. Lehman believes that neither of the semiconductor manufacturers will meet their 12% quarter-over-quarter growth targets for the fourth quarter.

And shares of communications semiconductor manufacturer

Broadcom

(BRCM)

fell 16.8%, on the back of a downgrade from

Salomon Smith Barney

. Citing "signs of flattening orders in Broadcom's supply chain," the investment house cut its 12-month price for the company.

Net result -- the SOX fell 6.4%.

Sector Watch

Well, the holiday season is upon us and you know what that means -- a plethora of subpar holiday albums from boring pop artists, gift wrap companies finally turn a profit and people begin wearing some of the silliest holiday-related garb imaginable, just to "get in the spirit."

Oh, and the retailers have come back! The

S&P Retail Index

, which tracks a collection of retail stocks, was up 5%.

Wal-Mart

(WMT) - Get Report

led the way with a 9.4% gain.

Gold, drug stocks and health care continued to rally in the wake of presidential uncertainty and investor reluctance to invest in high-multiple tech stocks. The

Philadelphia Stock Exchange Gold & Silver Index

rose 4.1%, while the

American Stock Exchange Pharmaceutical Index

rose 3% and the

S&P Health Care Index

rose 2.8%.

Some of these industries, old-school brick-and-mortar industries, have become darlings again. They're something of an oasis, a safe play in the land of uncertainty.

One part of the market that investors didn't like was semiconductors. The

Philadelphia Stock Exchange Semiconductor Index

continued to have a rough time of things, falling 6.4%.

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Bonds/Economy

Treasuries were under pressure for much of the day in reaction to rising stock prices and the prospect that

George W. Bush

will be the country's next president. But they had lately turned slightly to the upside, though only by a hair.

The only economic news of the day -- the

existing home sales

(

definition |

chart |

source

) report for October -- was weaker than expected, a positive development for the bond market because it suggests the economy is slowing. The pace of existing home sales fell to 4.96 million from 5.16 million in September. Economists polled by

Reuters

had forecast a rate of 5.14 million, on average.

The benchmark 10-year

Treasury note lately was up 1/32 at 100 27/32, lowering its yield to 5.635%.

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