The gap between blue chips and tech stocks was only getting wider at midday as the
Dow Jones Industrial Average continued to sink while the
Nasdaq Composite Index rode higher on a wave of earnings optimism.
The Comp was lately up 78 to 3972, while the Dow was down 71 to 11,112. Taking its cue from the Comp, the Internet sector was also on the rise with
TheStreet.com Internet Sector
index, or DOT, which was up 25.6 to 825.
Software database heavyweight
was the name of the tech-game today as the bellwether pulled the sector higher ahead of the company's first-quarter earnings report, which is due out after the close.
Morgan Stanley Dean Witter
analyst Chuck Phillips infused even more energy into the stock with an upgrade this morning to strong buy from outperform. Amid a stream of optimistic chatter, from analysts and investors alike, the stock was up 3.7% to $85.
Meanwhile, blue-chips were unable to squeeze any juice out of the latest round of tame economic data, which showed the pace of economic growth continues to run at more moderate levels. Gains in the Dow's tech components were offset by broad weakness in a number of financial and industrial stocks.
Adding further downside to Old Economy issued was weakness in
, which was smarting 14.7% from the pain of
Deutsche Banc Alex. Brown's
downgrade to market perform from buy. Colgate's price target was sliced to 55 from 62 on worries about its third-quarter earnings.
Producer Price Index
and initial jobless claims numbers and a slight recovery in the euro have been unable to inspire any confidence in the broader market.
S&P 500 and the small-cap
Russell 2000 were both sporting green. The SPX was up 4.3 to 1489, while the Russell was up 4.9 to 539.
Other favorites with tech investors today included
, which announced last night that it plans to spin off its Internet business. The company was lately up 35.8% to $50.31. Conexant and Oracle were among the most actively traded stocks on the Nasdaq.
Chase Manhattan Bank
was just barely recovering from a weeklong plummet this morning after some analysts made positive comments on the stock. Chase had fallen precipitously this week as merger rumors gathered in the sector and its plans to acquire U.S. brokerage powerhouse
were confirmed yesterday. Chase was one of the most active stocks on the New York Stock Exchange.
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Box-makers were rebounding this morning, and the
Philadelphia Stock Exchange Computer Box Maker Index
was up 1.7% after losing 0.9% yesterday. Box-makers were under pressure yesterday after
cut its fiscal first-quarter profit forecast, citing weakness in consumer electronics and dead PC-demand.
were all rebounding.
Semiconductors were jumping, with the
Philadelphia Stock Exchange Semiconductor Index
Financials were still rising after a few days of frenzied activity. Banks were leaning to the upside with the
Philadelphia Stock Exchange KBW/Bank Index
up 0.1% while the
American Stock Exchange Broker/Dealer Index
was bouncing up 1.2%.
Telecom stocks were shooting for a gain after a dismal week. The
Nasdaq Telecommunications Index
was lately up 1.9%. Through yesterday, the index was down 8% for the month-to-date.
were all higher.
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Today's economic reports were uniformly tame. August retail sales were more or less in line with expectations, while the August PPI rose less than expected.
Retail sales rose 0.2% compared to an average forecast of a 0.3% gain. Excluding autos, sales rose 0.3%, in line with expectations. However, July's results were revised upward, which made the August results appear somewhat weaker than they were.
Meanwhile, the PPI fell 0.2% vs. an average forecast that it would rise by that amount. The core PPI, which excludes food and energy prices, rose 0.1%, a tenth less than expected. The August PPI does not capture the more recent rise in oil prices, which is expected to show up in the September report. Energy prices fell 0.2% in the August PPI, while food prices fell 0.7%, the largest drop in at least a year.
Also today, initial jobless claims rose to 324,000 -- the highest level since January 1999 -- from 311,000 the previous week, indicating continued slackening in the labor market and possibly a slowing rate of job growth.
The 10-year Treasury note was lately down fractionally to 99 29/32, yielding 5.764%.
Bond prices rallied nicely yesterday, thanks to another decline in oil prices and growing optimism about the monetary policy outlook.
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