Market Update: Indices Resume Bounce by Midmorning

<LI>Florida elections ruling expected today.</LI><LI>Dow higher despite weakness in financials.</LI><LI>Tech boosted by good earnings news.</LI>
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The major indices were in a muddle this morning on some mixed earnings news, analyst calls, a record U.S. trade gap and continued uncertainty over the outcome of the presidential elections.

Lately the

Nasdaq Composite Index was resuming its earlier snapback bounce. After all, the tech-heavy index sunk to its lowest level in more than a year yesterday -- down 151.5 points to 2875.6. Big cap tech stocks in the PC-making, telecom and networking sectors were lately countering weakness in semiconductors and Internet stocks.

The

Dow Jones Industrial Average, meanwhile, was also making its way higher, despite substantial weakness in financials following some downgrades by

Merrill Lynch

, which cut its earnings-per-share targets for asset management companies by an average of 7%.

Tech stocks were getting a little boost partly on good earnings news from communications equipment maker,

Nortel Networks

(NT)

and

Agilent Technologies

(A) - Get Report

, which does business in a host of beaten-down tech sectors including communications, electronics, life sciences, opticals and semiconductors.

And Lucent

(LU)

was a drag on tech stocks and the NYSE. The company said it expected lower fourth quarter revenues would knock 2 cents off of its earnings per share.

Prudential's

upgrade on biotech stocks

IDEC Pharmaceuticals

(IDPH)

and

Genentech

(DNA)

to strong buys from accumulate was also helping.

Former highfliers, both the networking and biotech sectors have been knocked to their knees in the past month on concerns of slowdown in their respective businesses.

Nortel, which makes equipment for communications companies, said last night it was "very confident" it would meet its operating earnings and revenue targets for the fourth quarter. The company also said it expects growth in its optical, wireless and Internet and e-business products to remain strong.

TheStreet.com

covered Nortel's news in a separate

story.

This reassurance was much needed after the company hit a new 52-week low of $34.06 last Friday on concerns voiced by

Banc of America Securities

. Banc of America analyst Chris Crespi said that Nortel's customers began stockpiling optical equipment in the third quarter. And this was only the latest in a spate of recent bad news surrounding the networking sector. One of the last holdouts against the Nasdaq's autumn decline, the sector was initially thought by some to be immune to an economic slowdown. But the believers lost faith pretty quickly when Nortel revealed some weakness in its business in early November.

A separate

TSC

story gives a more detailed account of Agilent's earnings announcement.

Meanwhile, the elections quagmire continues to throw a long shadow over this market. Some expect a

Florida Supreme Court

decision on whether to include hand recounts in the final tally as soon as today. Yesterday, the markets swung higher, and then lower as the Republicans and then Democrats delivered compelling arguments to the court.

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Sector Watch

Semiconductors were countering strength in the rest of tech this morning, despite buying in industry titan

Intel

(INTC) - Get Report

. The sector's biggest losers were

Xilinx

(XLNX) - Get Report

and

LSI Logic

(LSI) - Get Report

, down 9.9% and 14.8%.

The retailers were sinking ahead of

Home Depot's

(HD) - Get Report

analyst meeting, later today.

Retailers have gotten a little boost lately as investors shed volatile tech stocks and after a few retailers managed to meet earnings expectations -- namely

Wal-Mart

(WMT) - Get Report

and

Target

(TGT) - Get Report

.

But retailers have mostly been under pressure as several big sector players warned of slowing earnings going forward. Home Depot met earning estimates for the third quarter, but warned that its fourth quarter and fiscal 2001 earnings may be weaker than expected due to a more competitive retail environment.

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Bonds/Economy

Bond prices were slipping this morning after a little bounce higher Monday and following U.S. data that showed the U.S. trade gap hit a new record in September. The benchmark 10-year

Treasury note was down 5/32 at 100 13/32, yielding 5.694%.

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