Both the Dow Jones Industrial Average and Nasdaq Composite Index looked like a Mark McGwire home run, leaving a vapor trail and leaving the building on the move higher.
Great midmorning news from
Federal Reserve Chairman
Alan Greenspan knocked markets higher as he affirmed what everyone already knew -- that the American economy is weakening.
"Still, in an economy that already has lost some momentum," Greenspan said, "one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending."
These comments added more ammo to hopes the Fed will change its bias at its Dec. 19
Federal Open Market Committee meeting. Since June 1999, the Fed has raised interest
rates six times in hopes to slow down the American economy. With that slowdown becoming increasingly evident -- to the agony of some investors -- many are hoping that the interest-rate picture will improve. And
was one of them. In a note to its customers following Greenspan's midmorning comments, Merrill said that it believes the Fed will switch to a neutral bias at its meeting.
Markets only improved after hearing Greenspan's dovish love-letter to traders. Prior to that, both the Dow and Comp were deep in the green after the presidential-elect picture grew just a bit clearer after the end of trading yesterday.
U.S. Supreme Court
Leon County Circuit Court
ruled against the Gore team's quest for a recount, pushing markets higher. You know the drill. "Markets don't like uncertainty." Now that Gore has one final appeal to the
Florida Supreme Court
, it seems a little more certain that a Bush win looms in the not-so-distant future. In any event, markets were happy that a presidential victor -- any victor -- would be decided sooner than later.
Within the Dow, 21 of the 30 blue-chips were positive. Leadership from technology and manufacturing offset the minor slides in other companies.
For the second day in a row,
was one of the brightest blue-chips, adding a weighted 73 points to the Dow's good side on news that
executive, James McNerney, Jr., would be joining the company as its top guy in April. McNerney was recently passed over as the heir apparent to Jack Welch, GE's legendary CEO.
all had a huge day on the prospect that the Fed might cut rates.
Meanwhile, a trio of tech names,
were also much higher. Mr. Softie is considered a pro-Bush play, while Intel recovered along with the other semiconductors.
Somebody put some pants on the Comp, huh? At the bell, the technology-laden index was up 10.5%, as virtually all of its bloodied friends rebounded. Today goes down in history as the best percentage day ever.
Chipmakers, boxmakers, phone-makers, wireless, peripherals, biotechnology and (gasp) even those destroyed dot-coms were way up at midday.
Morgan Stanley High-Technology 35 Index
, a good indicator of how the most widely held Nasdaq stocks perform, was up 9.2%.
all had better-than 9% gains.
Philadelphia Stock Exchange Semiconductor Index
rose 10.2%. Even
, which warned that it would miss earnings last night, gained 4.5%.
Personal computer makers in the
Philadelphia Stock Exchange Computer Box Maker Sector
rose 8.2%, while the
TheStreet.com Internet Sector Index
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HMO stocks were improving, as were airlines and the entire transportation sector. Welcome to the Old Economy, guys.
Morgan Stanley/American Stock Exchange HMO Index
rose 2.4%, tracking much higher as the prospects of a Bush presidency seem better in the wake of the two favorable court rulings. These guys are seen as a pro-Bush sector, since his presidency would not be prone to include heavy regulation that would impact the industry. This year, HMOs have been one of the best-performing areas of the market, and today was no exception.
In fact, since the election, the HMO index has risen close to 14%, hitting 52-week highs in the process.
Airlines, which have been bounding around lately, were solidly to the upside after two-days of negligible gains. The
American Stock Exchange Airline Index
was up 3.6%, which helped the guys in the
Dow Jones Transportation Average
And with technology making such a run-up, it's only natural that the money come from somewhere. Today, a lot of that money came out of a sector that's been up while the chips, or semiconductors, were down. The
Philadelphia Stock Exchange Gold & Silver Index
, which has rallied 10% since Election Day, was off 4.8%.
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Treasuries were up strongly thanks to comments by Fed Chairman Alan Greenspan suggesting that the central bank would likely to lower interest rates in the months ahead. The bond market was also benefiting from weak economic news.
The benchmark 10-year
Treasury note lately was up 1 1/32 at 102 13/32, lowering its yield to 5.427%.
In a speech this morning, Greenspan acknowledged that the economy is at risk of slowing too much, implying that the Fed will lower interest rates to keep that from happening.
The bond market was also benefiting from the news that
) fell more sharply than expected in October. Orders for manufactured goods, an indicator of the health of the factory sector, fell 3.3%. Economists polled by
had forecast a 2.7% drop.
BTM Weekly U.S. Retail Chain Store Sales Index
chart ), not normally a market-mover, fell 2.6% in the latest week, its biggest drop in over four years.
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