Market Update: History, Stocks Holding Their Breath
Tech stocks drove into the red this morning, despite signs early on that the market would drift upward amid uncertainty over the presidential elections. The old guard, meanwhile, was tossing at the flatline, and the
Dow Jones Industrial Average was lately hovering just in the green.
But breadth on the
New York Stock Exchange and the
Nasdaq remained narrowly mixed on paltry volume. The election now hangs on a recount in Florida, the results of which some are saying may not be out until after the market closes on Thursday.
Cisco
(CSCO) - Get Report
was one of the Nasdaq's most actively traded stocks this morning. The networking darling was falling after being removed from
Morgan Stanley's
fresh money buy list this morning -- it was lately off 2.97%. The company's shares rose a few percentage points yesterday following a fabulous earnings report and outlook Monday evening.
Tech bellwethers were also slipping across the board, including semiconductors
Intel
(INTC) - Get Report
and
Texas Instruments
(TXN) - Get Report
, PC-maker
Dell
(DELL) - Get Report
and software-maker
Oracle
(ORCL) - Get Report
.
Drug, tobacco, and energy stocks were drumming up a little rallying spirit, however, as Bush maintained an unofficial lead in Florida and the Democrats were unable to win a majority in the Senate. This would leave the House in control of the Republicans and, depending on the outcome of the election, could mean a slim majority for Republicans in the Congress.
Gore was seen harming drug, tobacco and energy stocks because of his proposals for prescription drug price controls, as well as tough antitrust and anti-big business stances. Pharmaceuticals companies such as
Eli Lilly
(LLY) - Get Report
and
Merck
(MRK) - Get Report
were up 4.3% and 4.7%, tobacco giant
Philip Morris
(MO) - Get Report
was rising 3.2%, and energy company
Chevron
(CHV)
was up 1.1%. The
American Stock Exchange Oil & Gas Index
was rising 0.4%, the
American Stock Exchange Pharmaceutical Index
was up 2.96% and the
American Stock Exchange Tobacco Index
was up 2.8%.
Microsoft
(MSFT) - Get Report
had been trading up in early action on optimism over Republican control of the government as well as
Lehman Brothers'
increase on its 12-month price target for the company, but lately the stock was slipping back to near the flatline. The Republicans would be good for this stock because they would be expected to drop or ease the government's antitrust case against the company. Microsoft was lately up 0.4%.
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Sector Watch
Financials were performing miserably this morning, with the
American Stock Exchange Broker/Dealer Index
off 3.1% and the
Philadelphia Stock Exchange/KBW Bank Index
falling 2.5%.
Semiconductors continued yesterday's slide on concerns that networkers have begun to build up chip inventory and probably won't be buying a whole lot more any time soon. The
Philadelphia Stock Exchange Semiconductor Index
was slipping 3.7%.
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Bonds/Economy
Bond prices were trading erratically this morning as the outcome of the presidential elections continued to hinge on a recount of votes in Florida.
The benchmark 10-year
Treasury note was falling 1/32, at 99 3/32, to yield 5.872%.
The 30-year
Treasury bond was up 2/32, to 104 31/32, to yield 5.893%.
Bond prices have slipped sharply over the past few days, albeit on light volume, and some say they have been attempting to account for a Bush win ahead of time. Bush is seen as negative for bonds, while a Gore victory would probably have a positive effect. Yesterday, the market lost ground ahead of the election, and so far, it is sliding again.
TheStreet.com
recently took a close look at how the bond market should
respond to the election.
A few pieces of economic data came out this morning, including the
Mortgage Applications Survey
(
definition |
chart |
source
) and
import price
(
definition |
chart |
) index.
The Mortgage Applications Survey for the week ended Nov. 3 fell to 651.2 from 654.6 in the previous week. The Purchase Index rose to 310.5 from 304.6. The import price index for October, meanwhile, fell 0.5% after a rise of 1.2% in September. The export price index slipped 0.1% after a rise of 0.5% in the prior month.
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