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Market Update: Nasdaq Dips With Weakness in Chips

<LI>Retailers dip despite analyst upgrades.</LI> <LI>Oil stocks climb higher.</LI> <LI>Networking companies slide.</LI>

Investors were lukewarm on technology stocks this morning, but they were giving some lift to blue-chips in what is a mixed day on Wall Street.

The tech-loaded

Nasdaq was sagging as investors await word from



, which reports fourth-quarter earnings tomorrow. The stock was a popular whipping post, with the networking giant lately off 4.4%. It was the most actively traded stock on the Nasdaq.

Other networkers,

Cabletron Systems



Nortel Networks





were following Cisco's lead. Cabletron was lately losing 4.5%, Nortel was losing 2% and Avaya was losing 2.9%. The

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TheStreet Recommends

Amex Networking Index

was lately down 1.9%.

The semiconductor sector was getting slammed by a

negative report about inventories in the sector that just came out from the

Semiconductor Industry Association

. Analysts have commented that inventory levels have worsened in recent months and could likely take to the end of the second quarter to burn off. Semiconductor titan



was off 3.9%, and the

Philadelphia Stock Exchange Semiconductor Index

was falling 4.4%.

The majority of the major tech bellwethers were also lower.

Sun Microsystems


was down 2.6%, and PC makers






were falling.

The blue-chip

Dow, meanwhile, was higher. Leading the index higher were consumer products giant






. Exxon and other oil stocks were getting a major boost from rises in crude oil prices. Oil prices on Friday had their biggest gains in two weeks, and they were rising again this morning.


American Stock Exchange Oil & Gas Index

was up almost 1%.

One of the latest energy companies to report strong fourth-quarter earnings because of high oil prices,



was up 2.6%. The company reported fourth-quarter earnings per share of 57 cents this morning, well above the 22-cent estimate expected by the analysts polled by

First Call/ Thomson Financial


Phillips Petroleum


wasn't participating in that party. The stock was down 10.7% after announcing yesterday that it had agreed to buy



for $7 billion in stock. Tosco was trading 13.2% higher.

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Sector Watch

Retail stocks were soft this morning, despite upgrades on retailers






. The

S&P Retail Index

was falling 1.2%, AnnTaylor was down 2% and Dillard's was lately jumping 17.3%.

AnnTaylor was upgraded to outperform from neutral at

Morgan Stanley Dean Witter

, though

Prudential Securities

reduced its fourth-quarter earnings estimates on the company to 33 cents a share from 38 cents a share. Dillard's was raised to buy from neutral at

Salomon Smith Barney


Prudential also lowered its fiscal 2001 earnings estimates for

Abercrombie & Fitch


to $2.80 per share from $2.85. Abercrombie & Fitch was down 3%.

Cable companies were better following an upgrade from





was up 3.5% and



rose 3.4%.

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