Market Update: Nasdaq Falls Below 3000 at Midday
The
Nasdaq Composite Index was lately back below 3000, taking a synchronized dive along with the other major indices an hour after they went soaring on the announcement that a Florida judge had rejected a petition by the Gore campaign to include hand-recounted votes.
While the election melee continues, money remains on the sidelines. The modest volume is creating volatility, resulting in a roller-coaster ride for the major indices. Still, others are saying the election is just an excuse for what really amounts to the market's concerns over slowing growth and lower-than-expected fourth-quarter earnings.
But Unix systems company
Sun Microsystems
(SUNW) - Get Sunworks Inc. Report
was bucking the fourth-quarter-warning trend, announcing that it's on track to meet earnings targets for the current quarter and that demand remains strong.
TheStreet.com
took a close look at
Sun's news. Sun was up early on, but lately was off 0.9%.
Other stocks that were up earlier but that had recently lost steam include chipmaking giant
Intel
(INTC) - Get Intel Corporation Report
. It said it would launch its new high-speed Pentium 4 chip in a bid to upstage rival
Advanced Micro Devices
(AMD) - Get Advanced Micro Devices Inc. Report
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in the market for processors that run personal computers. Intel was lately unchanged.
The heaviest drag on the
Dow Jones Industrial Average was
J.P. Morgan
(JPM) - Get JP Morgan Chase & Co. Report
, which was slapping about 33 negative points on the index. Financials, overall, have had a crummy week after
Bank of America
(BAC) - Get Bank of America Corporation Report
had a negative asset quality announcement in its 10-Q.
The star today was book retailer
Barnes & Noble
(BKS) - Get Barnes & Noble, Inc. Report
, lately up 16.7%. It was upgraded to buy from outperform at
Salomon Smith Barney
and by
Merrill Lynch
to buy from accumulate. Solly said the upgrade reflected solid business trends in the core book operations.
Sector Watch
The
American Stock Exchange Broker/Dealer Index
was down 2.3%. Most of its components were down.
Morgan Stanley Dean Witter
(MWD)
fell 4.5%. The firm, along with First Union and Bank of America, were agents on a $1.7 billion loan to
Sunbeam
(SOC)
in March 1998. Earlier this week, debt-laden Sunbeam reported a third-quarter loss well below estimates.
Stocks that would likely react well under a Bush administration were rallying today. The
American Stock Exchange Pharmaceutical Index
was rising 0.5% and the
American Stock Exchange Tobacco Index
was 1.2% higher.
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Bonds/Economy
Treasuries are under pressure following a Florida judge's ruling in favor of Republican candidate George W. Bush. The judge rejected Democratic candidate Al Gore's request that hand recounts be included in the final vote tally, which currently favors Bush.
Treasuries are responding to the prospect of a Bush presidency, which bond market analysts say will do more than a Gore administration to erode federal budget surpluses. Federal budget surpluses have boosted the value of Treasury securities, because they have led to reduced issuance of Treasuries.
The benchmark 10-year
Treasury note lately was down 6/32 to 100 13/32, lifting its yield to 5.696%.
The only economic news of the day was a touch weaker than expected. Housing starts (
definition |
chart | source ) rose a scant 0.1% 1.532 million in October from 1.530 million in September. Economists polled by
Reuters
had forecast a 1.556 million rate. However building permit issuance rose more than expected, to 1.537 million from 1.518 million.
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