(Updated from 10:46 a.m.)
The major stock market averages were losing points headed into the afternoon, the day after Wednesday's trading session snapped a six-day winning streak for technology stocks and cut into recent gains in
Wall Street turned its attention to Capitol Hill this morning. Shortly after the opening bell, Sen. James M. Jeffords, a Vermont Republican, confirmed his decision to leave the GOP to become an independent. The move gives the Democratic Party operational control of the U.S. Senate.
During the senator's speech, the market averages stayed in a narrow range and ultimately moved up. The
Dow Jones Industrial Average gained about 60 points. Lately, however, the Dow was off about 20 points to 11,086. The
Nasdaq Composite Index also moved from positive territory into the red and was lately off about 1 point to 2243.
The news of Jeffords' party swap was publicized yesterday, and Wall Street analysts are torn over the impact it is having on stocks. Some say the move is likely to pressure sectors that typically benefit from Republican legislation. Along those lines, the
American Stock Exchange Pharmaceutical Index
was off 1.6%. Oil stocks were also falling. But the
American Stock Exchange Tobacco Index
, which would be expected to weaken with a shift of power to Democrats, was creeping higher. It was lately up 0.5%.
Some traders said investors didn't need an excuse to sell stocks yesterday -- or even today -- given their sharp rise over the past week. Ever since May 15, when the
Federal Reserve cut interest rates for the fifth time this year, Wall Street has bet that the series of reductions will have a positive effect on the economy. The Dow last week crossed the psychologically key 11,000 mark, and the Nasdaq is trading back above a key benchmark of 2200.
As of yesterday's close, the Nasdaq is up 37% since falling to its recent low of 1638.8 on April 4. It's still 55.5% off its all-time high, however. The Dow is 18.3% above its two-year low of 9389.48 hit on March 22 and 5.3% below its all-time high.
As the price moves this morning show, Wall Street may trade cautiously ahead of
Alan Greenspan's speech this evening on economic developments before the Economic Club of New York.
Initial jobless claims
for the week ending May 19 rose 15,000 to 407,000, the government reported this morning. Economists had been expecting a drop in the number of filings for unemployment. The Fed and market participants are closely watching the employment scene: The jobless rate climbed to 4.5% in April.
was one of the biggest movers today, jumping 38.2% to $24.27 after consulting outfit
agreed to acquire it for $950 million and offered $170 million for the remaining stake of its Unigraphics Solutions division. EDS was down 5.9% to $60.98.
Financial stocks were also gaining. Chips, forest and paper products, transportation and cyclical stocks were falling.
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