The market continued its recent slide into the red this morning, led down by lingering concerns over opticals. The
Nasdaq Composite Index was lately trending to the downside while the
Dow Jones Industrial Average was also meandering in negative territory, though down less steeply.
Before the open, 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. It looks like the market may be doing the latter.
Early on, pundits counseled 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.
And what do you know? After showing some strength at the open, all three sectors lost their stamina and slipped into the red.
Jitters over optical networking leader
, which reports earnings after the close today, were the biggest concern. JDS's biggest customers, telecommunications equipment makers
, have spooked the market of late with revenue warnings. Lucent also booted its chairman and CEO this week after several quarters of disappointing profits.
In fact, JDS got hit with a downgrade yesterday morning on the heels of
warning. Nortel said Tuesday evening that it expected a
slowdown in optical sales for the year, whupping the entire sector, and market.
took a look at yesterday's
opticals selloff in a separate story.
Early strength in
had faded, and the stock was off 2.0%. That stock and fellow financial
were knocking a combined 22 points off the blue-chip index.
Dow's tech bellwethers
continued to show mild strength, however, lately up 1.6% and 2.6%, respectively.
was one of the only remaining strongholds, trading 1.9% higher.
But the rest of the sector was under fire. Nortel, JDS Uniphase,
, among others, were still suffering, off 3.6%, 7.7%, 18.2%, 10.2% and 10.5%, in that order. Yesterday, Nortel lost almost a third of its value.
JDS and Cisco were the most actively traded stocks on the Nasdaq exchange. Telephone and data services company
and Ciena followed. WorldCom was off 7.2% despite matching Wall Street's earnings estimates this morning, with a 26% increase in third quarter profits, and confirming its intention to unveil a restructuring plan next week. Yesterday, investors were less than enthusiastic about
announced restructuring. The telecom titan said it would split itself into four separate units. AT&T was lately down 5.9%.
Previously up by 1.5%, the
Philadelphia Stock Exchange Semiconductor Index
had lately turned down, off 0.6% to 668.9. The
Philadelphia Stock Exchange/KBW Bank Index
had also slipped into the red, lately off 2.1%.
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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.
Biotechnology stocks continued their recent slide.
, which reports earnings today, was falling, off 1.1%. The
Nasdaq Biotechnology Index
was 0.8% lower.
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Bonds were up 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%.
Treasury bond was at 107 9/32, 4/32 higher, to yield 5.733%.
Economic data this morning was relatively benign.
Employment Cost Index
) for the third quarter rose 0.9%, after a 1% gain in the prior quarter. A 1% increase had been expected.
Initial jobless claims
) for the week of Oct. 21 were lower at 305,000, from 310,000 in the previous week.
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