Market Update: Indices Narrowly Lower in Late Morning Action - TheStreet

The market seesawed at the bell, shouldering higher and is losing its stamina and slipping further into the red.

After the

Nasdaq Composite Index, fell back towards previous lows for the year yesterday, some market pros were wondering whether stocks would get a technical bounce today or retest last Wednesday's closing low of 3074, which most of the market has identified as a bottom.

Investors may also be jittery about optical networking leader

JDS Uniphase

(JDSU)

, which reports earnings after the close today.

The company got hit with a downgrade yesterday morning on the heels of

Nortel's

(NT)

warning. Nortel said Tuesday evening that it expected a

slowdown in optical sales for the year, and the entire sector and market got whupped.

While optical networkers may not score a lasting recovery any time soon, the bargain hunters were coming back to these stocks today.

TheStreet.com

took a look at the

optical selloff in a separate story.

Some pundits were counseling attention to the "tells," those sectors that -- because they have been market leaders -- could indicate where the broader market's going. The optical stocks, the semiconductors, and the banks were among the sectors Wall Streeters said could play crystal ball to the market's direction today.

Strength in techs and financials such as

IBM

(IBM) - Get Report

,

Intel

(INTC) - Get Report

and

J.P. Morgan

(JPM) - Get Report

were not helping the

Dow Jones Industrial Average, however. A combined 34 points of weighted strength to the upside from these stocks was being countered by broad weakness in the rest of the index.

Meanwhile, the opticals were mixed. After losing almost a third of its value yesterday, Nortel was trading 0.97% higher to $45.31.

Cisco

(CSCO) - Get Report

was also up, trading 3.3% higher.

But the rest were still under fire, including JDS Uniphase,

Ciena

(CIEN) - Get Report

and

SDL

(SDLI)

and

Corvis

(CORV) - Get Report

, among others, were still suffering, off 4.7%, 12.9%, 8.1% and 6.2%, in that order.

The

Philadelphia Stock Exchange Semiconductor Index

was still up, by 1.5% to 675, but the

Philadelphia Stock Exchange/KBW Bank Index

had recently fallen into the red, lately off 1.2%.

Back to top

Sector Watch

Energy stocks were recovering a bit from their recent slide after oil prices spiked higher this morning. Concerns that Iraq could disrupt oil shipments pushed December's Brent crude futures up 79 cents to $33.75 shortly after the opening. Iraq is demanding oil for food payments in euros, a proposal that is now before the U.N. Security Council. Traders are worried that Iraq could withhold oil if it doesn't get its way.

The sector rallied powerfully and steadily through late summer but began to falter mid-September. The

American Stock Exchange Oil & Gas Index

was lately up 0.5%, the

American Stock Exchange Natural Gas Index

was up 0.5% and the

Chicago Board Options Exchange Oil Index

was 0.4% higher.

Back to top

Bonds/Economy

Bonds were mixed this morning, following a down day yesterday.

The benchmark 10-year

Treasury note was lately up 2/32 to 100 16/32, yielding 5.684%.

The 30-year

Treasury bond was at 107 9/32, 4/32 higher, to yield 5.733%.

Economic data this morning was relatively benign.

The

Employment Cost Index

(

definition |

chart |

source

) for the third quarter rose 0.9%, after a 1% gain in the prior quarter. A 1% increase had been expected.

Initial jobless claims

(

definition |

chart |

source

) for the week of Oct. 21 were lower at 305,000, from 310,000 in the previous week.

Back to top