(Updated from 10:35 a.m. EST)
The major indices have been taking turns hopping around the flatline today. The
Nasdaq Composite Index opened up, while the
Dow Jones Industrial Average was muddled at the outset. Lately, they've traded places. The PC sector is coming under fire after
trimmed revenue estimates on
, but other major technology indices are stronger.
Lately the Dow was up modestly, but the
S&P 500 and the Nasdaq had turned slightly down.
Pru cut fourth-quarter revenue estimates for IBM to $24.5 billion from $25.3 billion, citing weak software and PC sales. The stock was lately down 13 cents to $84.56. Pru trimmed its revenue estimates for Dell to $8.29 billion for the quarter from a previous estimate of $8.38 billion. Lately, Dell was trading at $17.75, down 1.7%. The
Philadelphia Stock Exchange Computer Box Maker Index
was recently down 0.8%.
Amex Networking Index
rose 0.3%, the
Nasdaq Telecommunications Index
gained 0.3%, and the
Philadelphia Stock Exchange Semiconductor Index
tacked on 1.1%. In contrast to the PC downgrades, Pru issued positive comments on the semiconductors, specifically those with broad exposure, such as
The defensive stocks were carrying their weight again today.
Johnson & Johnson
, which hit a 52-week high yesterday, was once again at a new high, rising 2.3% to $105.38.
Sentiment has improved in the last couple of days. There's a growing feeling that the
Federal Reserve will soon cut interest rates, which would at least provide investors with a psychological boost. Interest-rate cuts, however, won't eradicate existing problems within the stock market, such as the reduced demand and debt issues plaguing quite a few companies. These issues asserted themselves in the telecommunications sector -- and even if the Fed eases credit, those companies still have debt to pay.
A couple of earnings warnings hit the Street since yesterday's close. Last night,
, the nation's largest railroad company, said it planned to cut 2,000 jobs and take a charge of 26 cents a share in the fourth quarter. The stock was down 4.2% in trading today.
(they make toilets -- lots of 'em) said it would cut its work force by 1,200 nationwide and close a plant. The stock was lately up 75 cents to $46.13.
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Drug stocks were having a reasonably strong day. In addition to J&J,
was lately up 1.6%, and
gained 0.8%. The
Amex Pharmaceutical Index
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The bond market was softer this morning. Lately, the 10-year Treasury note was down 9/32 at 104 16/32, yielding 5.150%. Initial jobless claims fell to 333,000 for the week ended Dec. 16, down from a revised 356,000 the previous week. The four-week moving average dropped to 340,750, down from the prior week's 347,750.
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