Market Update: Nasdaq Jumps While Dow Muddles Through - TheStreet

Today, it's the

Nasdaq Composite Index's turn to shine.

Following a 245-point

surge on the

Dow Jones Industrial Average yesterday and a decline in the Nasdaq, the tech-heavy index was looking cheap today. The Nasdaq lost almost 300 points in little over a week, and was just a stone's throw from its lows for the year at yesterday's close. Investors stormed the index in search of bargains at the open and it was lately charging higher.

The Dow, meanwhile, was hanging on to yesterday's gains by its bootstraps, lately wavering near break-even. The king of

Crisco,

Procter & Gamble

(PG) - Get Report

wasn't helping any.

The consumer products giant reported earnings this morning in-line with estimates. The company's share price has been slashed by earnings warnings for most of this year, but had recovered some 19% since the company reiterated its earnings growth projections for fiscal 2000 and set moderate future targets. Procter & Gamble was lately falling 7.6% to $71.06 and was cutting over 26 points off of the Dow.

The few counterpoints to general weakness on the blue-chip included

General Motors

(GM) - Get Report

, adding 16 points of upswing,

Home Depot

(HD) - Get Report

, adding 11, and

Wal-Mart

(WMT) - Get Report

, adding 8. However, breadth on the

New York Stock Exchange was reasonably strong, with winners outpacing losers 15 to 10.

Fighting Back

Back on the Nasdaq, yesterday's most severely punished stock,

Cisco

(CSCO) - Get Report

was being forgiven. Cisco tumbled yesterday after its earnings estimates were slashed by

Lehman Brothers

. It was lately the Nasdaq's most active, rising 6.5% to $51.19.

Rambus

(RMBS) - Get Report

fell 17.5% after reports that

Intel

(INTC) - Get Report

plans to stop using Rambus' DRAM chips in its

platforms. Rambus was lately down $9.44 to $43.13, while Intel rose $1.44 to $46.44.

After getting knocked down sector by sector on valuation concerns, the PC-makers, semiconductors and the optical and networking stocks, were looking relatively cheap. Optical and networking stocks were getting the biggest boost, led by

Nortel

(NT)

, up 10%. The beaten-up semiconductors and PC-makers were also having a better day. The

Philadelphia Stock Exchange Computer Box Maker Index

was up 4% and the

Philadelphia Stock Exchange Semiconductor Index

was 5.2% higher.

Nortel, which last week warned of slowing optical sales, has been responsible for much of the recent rout in the networking sector.

And PC-making Goliath

IBM's

(IBM) - Get Report

shares were rising 4.1% to $97.19 on news that its Japanese unit was planning a deal with Japan's

NTT

that would be worth $13.8 billion over a 10-year period.

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Sector Watch

The defensive favorites of yesterday were sagging today, with cyclicals, paper stocks and financials getting whacked.

The

Philadelphia Stock Exchange Forest & Paper Products Index

was 1.1% lower after soaring yesterday on an upgrade from

Deutsche Banc Alex. Brown

. This morning Dow components

International Paper

(IP) - Get Report

and

Bowater

(BOW)

were falling 0.5% and 3%, respectively. The two names were upgraded to strong buy from buy by Deutsche yesterday.

Cyclicals rose yesterday after

Lehman Brothers

upped its weighting on this sector in its global portfolio yesterday. The

Morgan Stanley Cyclical Index

had lately turned modestly up after an earlier decline this morning, rising by 0.2%. Oil drillers were mixed today, despite a sector upgrade from Lehman.

Sante Fe International

(SDC) - Get Report

gained 0.9%, while the

Philadelphia Stock Exchange Oil Service Index

lost 0.3%.

Biotechs were finally rallying back after a three-day selloff. The

Nasdaq Biotechnology Index

was up 3.9%.

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Bonds/Economy

Bonds were firmer with traders hopeful that this week's economic data will show further signs of a slowing economy and provide a supportive environment for the fixed-income market.

The benchmark 10-year

Treasury note is at 100 7/32, up 4/32, to yield 5.717%.

The 30-year

Treasury bondis at 107 2/32, also 4/32 higher, to yield 5.75%.

New home sales

rose to a seasonally adjusted annual rate of 946,000 in September from 866,000 in August, the fastest rate of sales since February. Mortgage interest rates have been declining steadily since mid-May and stand at their lowest levels in nearly a year.

The

BTM Weekly U.S. Retail Chain Store Sales Index

(

definition |

chart ) for the week ended Oct. 28 slipped 1.2% after a decline of 0.2% in the prior week.

The

APICS Business Outlook Index

(

definition |

chart |

source

) for September rose to 53.5 from 49.3 in August.

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