Major indices got knocked for a loop this morning by a one-two punch in the form of major downgrades.
was under pressure after negative comments from influential
US Bancorp Piper Jaffray
Ashok Kumar. And the drug sector was in pain after
Banc of America Securities
downgraded the sector.
Market watchers initially were expecting last week's quiet optimism to trickle over into this week, particularly following Friday's friendly
and manufacturing activity data.
Instead, investors were suffering a bout of post-holiday blues along with the broader market. Not helping matters any were group downgrades on oil stocks from
Deutsche Banc Alex. Brown
and a cut on trucking and transportation stocks courtesy of
Morgan Stanley Dean Witter
Dow Jones Industrial Average was hurt early on by Intel and drug component
, which was cut to market perform from buy at Banc of America. The Dow was recently off 3 to 11,235.
The tech heavy
Nasdaq Composite Index was also getting bashed by Intel and Internet heavy-hitter
, and was 66 to 4169. There was no new news on Yahoo! this morning.
Elsewhere in the market, the broader
S&P 500 was down 13 to 1508, the small-cap
was off 2 to 540.
Despite weakness in Yahoo,
TheStreet.com Internet Sector
index was up 4 to 851.
Investors' least favorite sectors so far this morning were health care and biotechnology.
Big movers included
, which was off 2.6%. Over the weekend, news came out that the
Federal Trade Commission
likely will block AOL's $129 billion acquisition of
unless the companies agree to let competitors use their cable lines.
wrote about the
FTC's concerns in a separate story.
was the big noise in telecom. The company confirmed this morning that it will buy telecom provider
for close to $3 billion in cash as well as payment of more than $3 billion in Intermedia's debt.
American Stock Exchange Pharmaceutical Index
was lately 3.4% lower after
Banc of America
downgraded the entire group to market perform from overweight on concerns of slowing growth. Sector heavyweight Merck, which was lowered to market performer from strong buy, was off 3.3%.
was off 2.2%.
Nasdaq Biotechnology Index
was down 3%.
Treasuries continued to trail lower this morning, with the benchmark 10-year note down 2/32 to 100 15/32, yielding 5.69%.