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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

Cisco

(CSCO)

, 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

(CS)

,

Nortel Networks

(NT)

and

Avaya

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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

Intel

(INTC)

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

(SUNW)

was down 2.6%, and PC makers

Hewlett-Packard

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and

Dell

(DELL)

were falling.

The blue-chip

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

3M

(MMM)

and

ExxonMobil

(XOM)

. 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.

The

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,

Williams

(WMB)

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

(P)

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

Tosco

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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

AnnTaylor

(ANN)

and

Dillard's

(DDS)

. 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

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

Cable companies were better following an upgrade from

CSFB

.

Comcast

(CMCSA)

was up 3.5% and

Charter

(CHTR)

rose 3.4%.

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