Publish date:

Market Update: Nasdaq Ends Strong, Dow Finishes Weak

<LI>Oil stocks slide.</LI> <LI>Alcoa ends down on earnings warning.</LI> <LI>Intel jumps on positive analyst comments.</LI>

The

Nasdaq shrugged off profit warnings to jump into rally mode today. But the blue-chips suffered from a stronger dollar and rising raw material prices, as investors remained concerned about how they will dent companies' bottom line.

The Nasdaq closed up 139 to 3866, with

Intel

(INTC) - Get Report

ending up 8.2%, after bullish comments from

Bear Stearns

and an upgrade from

Banc of America

.

The

Philadelphia Stock Exchange Semiconductor Index

, which has slipped 17.5% since the start of September, snapped back 8%.

Meanwhile, the

Dow Jones Industrial Average was off its sessions lows, but still closed in the red, down 19 to 10,789, with losses from big cyclical names like

Alcoa

(AA) - Get Report

, which slid 5.1%, countering techs' strength. The aluminum-maker said its third-quarter earnings would miss analyst expectations because of higher energy costs.

The

Morgan Stanley Dean Witter Cyclical Index

ended off 1%, hitting a new intraday trading low of 450.32.

Ingersoll-Rand

(IR) - Get Report

was also on the downside, slipping almost 10% on news that its third-quarter and fiscal-2000 results would be hurt by the weak euro and slower demand.

Elsewhere, the broad

S&P 500 climbed 15.4 to 1460, while the small-cap

Russell 2000 ended the day up 7 to 523.

In other company news, financials bounced back, after

Goldman Sachs

(GS) - Get Report

reported better-than-expected third-quarter earnings. The

TheStreet Recommends

American Stock Exchange Broker/Dealer Index

ended up 2.6% to 650.1, after falling from its recent all-time high level of 708.76.

J.P. Morgan's

(JPM) - Get Report

combination with

Chase Manhattan

(CMB)

quelled merger speculation, which had sent the index soaring more than 15% in three weeks.

Back to top

Sector Watch

The

American Stock Exchange Oil & Gas Index

lost 2.7% after hitting another all-time high yesterday.

Texaco

(TX) - Get Report

fell 3%, while

British Petroleum

(BP) - Get Report

was off 2.8%.

The

Philadelphia Stock Exchange Oil Service Index

was 1.8% lower, with

Halliburton

(HAL) - Get Report

off fractionally.

Back to top

Bonds/Economy

The trend that took hold in the Treasury market in the last week -- long-term yields rising while short-term yields hold steady -- was on hold for today.

In the last several trading sessions, long-term Treasuries have fallen in price so much that the 30-year bond's yield finds itself higher than the 10- and five-year note yields for the first time since January. The shift has been driven mainly by the belief the

Fed is unlikely to hike interest rates again.

But the shift was so sudden and violent that market participants are not surprised to see it pause for a day. After all, anyone who has simultaneously owned short-term Treasuries and been short long-term Treasuries over the last week was sitting on a fat profit, and could reasonably have been expected to close out those positions by selling the short-term issues and buying back the long-term ones.

The benchmark 10-year Treasury note lately was flat at 99 6/32, yielding 5.858%.

Back to top