Tech investors picked up where they left off yesterday, and the
Nasdaq kicked higher out of the gate. But lately it was stuck in the treetops, unable to advance further into the green. The blue-chip
Dow, meanwhile, was determined to wipe yesterday's losses off its scoresheet, and was lately back over 10,900.
Volume had picked up a little compared with recent sessions, and advancers were beating decliners by a moderate range on both the
NYSE and Nasdaq exchanges.
After erasing all of January's rally of more than 14%, the Nasdaq began to make a comeback yesterday. Investors apparently decided enough was enough, and they wanted another taste of those tantalizing technology stocks. But the Dow knocked off 108 points yesterday, primarily under pressure from consumer staples and food stocks.
It may be the market is anticipating that a hefty load of economic data due out tomorrow will confirm what some economic reports have already suggested -- that the economy began to pick up in January and that a recovery may come sooner than later.
Philly Fed Index, released this morning, indicated that the beleaguered manufacturing sector may finally begin to show some buoyancy. Check out
piece on the data. And tomorrow serves up
consumer sentiment index
producer price index. Industrial production and consumer sentiment are probably the ones to keep a close eye on. The Fed has said how important higher consumer confidence levels are to
But some traders fear investors are getting a little bit ahead of themselves. Market watchers have been predicting a stagnating market in coming months until business picks up in earnest. In January, most companies and analysts thought that would happen in the third quarter of this year. But with
visibility issues cropping up all across the tech universe, some have begun to stretch that forecast to the fourth quarter.
certainly was doing its part to lift the Nasdaq. It beat Wall Street estimates for its fiscal first-quarter earnings and, more importantly, forecast strong growth ahead. Tech investors had been punishing Ciena -- and most of the telecommunications-equipment makers -- lately on concerns about slowing corporate investments in technology. The stock was up 21.4%, and most of its sector was moving up.
And Wall Street just couldn't take a rest from networking darling
. For a solid week, the stock has been at the top of the list of the Nasdaq's most actively traded stocks. And it was again this morning. Last Tuesday, the company warned that it expected sales to slow in the future, and investors sold it off through Friday. Monday it began to rebound. Cisco was at $31.06 before the warning. It was lately up 4.9% to $31.13.
was falling this morning after
downgraded the Internet bellwether to a sell this morning. Amazon.com was off 2.6% to $14.06. Rival online bookseller
yesterday won part of a patent battle with. Amazon, but was off even more, by 7% to $1.69.
The Dow was getting most of its lift from tech giants: PC mammoths
were adding a combined 43 points to the index. Consumer products giant
was also rising, up 3% to $114.30.
Meanwhile, earnings season may be on its last legs, but there are a few more big names left to report. PC-leaders
and Hewlett-Packard issue their quarterly numbers today after the market closes. On Tuesday,
trimmed its earnings estimate for Dell's fiscal year, which ended January 2001, to 85 cents a share, down from 90 cents a share. But it left estimates for the fourth quarter 2000 intact. According to a 21-analyst consensus, Dell is expected to post fourth-quarter earnings of 15 cents a share.
Dell was up 8.7% to $24.94, and H-P was up 6% to $36.47 ahead of their releases.
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Investors were clearly favoring tech stocks over defensives again today. Drugs, tobacco and energy stocks were falling, while pretty much everything tech was on the rise. But two indices were really taking the cake and eating it, too. The
Philadelphia Stock Exchange Semiconductor Index
was up a bopping 5.9% and the
Morgan Stanley High Tech Index
was tearing 4.4% higher.
Financials were also on the up and up. The
American Stock Exchange Broker/Dealer Index
was up 2.2% and the
Philadelphia Stock Exchange/KBW Bank Index
was up 0.4%.
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Treasury prices are lower for the fourth successive day as the money market trims its hopes of an interest-rate cut next month from 50 basis points to 25. The fall in prices is steepest at the long end, with the 30-year bond two-thirds of a point down. The commercial and jobs data released this morning are slightly positive but still indicative of a softened economy. Yields are a little higher for the notes and fairly flat for the longer-dated maturities.
The benchmark 10-year
Treasury note lately was down 19/32 to 98 12/32, raising its yield to 5.213%.
In economic news,
initial jobless claims
), which track the number of people applying for first-time unemployment benefits, fell to 352,000 in the week ended Feb.10, from 363,000. Economists had predicted a drop to 359,000 in the
poll, so the lower number is a good sign. However, the reading is subject to frequent revisions. The four-week moving average rose to 345,000, its highest value since early January.
Import and export prices
) were mixed for January, with the former down and the latter up. Prices for imports for all commodities slid for the second consecutive month, by 0.4%. The average price increase for the past 12 months has also declined consistently since September; the level now stands at 2.3%. Excluding oil imports, the average monthly and yearly increases were 0.3% and 1.6% respectively. Meanwhile, total export costs were up 0.2% for January and are holding steady at 1.3% in their 12-month average. Excluding agricultural products, the price increases are 0.2% for January and 1% over the past 12 months.
Philadelphia Fed Index
), which measures regional manufacturing in Pennsylvania, New Jersey and Delaware, came out below expectations at -30.5. After the steep fall to -36.8 in January, economists had been predicting a more marked improvement than this, forecasting the number would rise to -24. The number indicates contracting activity in factories when below zero, and though it is moving in the right direction, its slow progress indicates the severely depressed state of manufacturing. Almost every Federal Reserve official has commented upon the manufacturing sector's woes, so the latest information is not likely to surprise bond investors.
Consumer Comfort Index
chart ) rose by 4 points to 20, its highest level since the start of the year. The gauge reflects the state of the economy and how people are responding to general buying opportunities.
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