Market Update: Nasdaq Manages Little Last-Minute Rally, Dow Ends Off Lows
(Updated from 3:31p.m.)
In the final 30 minutes of the trading week, the major averages fought hard to reverse today's losses.
As corporate grenades exploded on Wall Street this morning, the
Nasdaq Composite Index traded at levels last seen more than two years ago. In recent action, the technology-laden measure had managed to pick up some of the pieces.
The Dow closed off its lows, down 87 to 10,439 (by contrast, in the early afternoon it was down over 200). Meanwhile, the Nasdaq actually rallied back to positive, ending up 15 to 2260 after a dismal day. The S&P 500 stayed down, though, to close down by 7 to 1245.
The catalysts for today's technology selloff were profit warnings from
Sun Microsystems
(SUNW) - Get Report
and
Motorola
(MOT)
. Sun closed off 0.6% to $20.81and Motorola was behind 6% to $16.25.
In its midquarter conference call with analysts yesterday evening, Sun Microsystems slashed fiscal third-quarter earnings and revenue guidance. The announcement was widely expected by investors, who had taken the stock down 20% in the three days leading up to the company's statement.
As if Sun's news was not enough to burn the market, Motorola cautioned this morning that it would miss earnings and revenue projections for its fiscal first quarter. Citing the economic slowdown as well as inventory corrections in the technology market, the electronic-equipment and component maker joined the chorus of companies that have scaled back their forecasts in recent days.
This is the second warning in two months for Motorola. Back in December, the company said it would fall short of earnings and sales projections in the first half of 2001, blaming cost issues in its cellular handset business and falling demand in its semiconductor business -- its two largest segments in terms of revenue.
Competitors in the communications market have been pounded in recent day. Yesterday,
Nokia
(NOK) - Get Report
was hammered on fear about a profit warning. The Finnish phonemaker was recently down 8.2% to $21.34, while its Swedish competitor
Ericsson
(ERICY)
down 0.4% to $8.25.
Elsewhere in the sector,
Qualcomm
(QCOM) - Get Report
had recently plunged to a two-year low. This morning,
Deutsche Banc Alex. Brown
downgraded the stock to buy from strong buy along with five other telecom stocks.
With fundamental and technical conditions deteriorating on the market, a new club of technology stocks hit 52-week lows today. Among them,
Oracle
(ORCL) - Get Report
, off 6.9% and Qualcomm, down 7.4%.
IBM
(IBM) - Get Report
, down 4.5% to $104, was lately the biggest drag on the Dow, accounting for about 37 points of its downside. The stock has traded down for most of this week, as concerns about software makers have mounted. This morning,
Salomon Smith Barney
cut its price target on the stock.
Elsewhere on the
blue-chip index,
Johnson & Johnson
(JNJ) - Get Report
shed 1.1% to $95.49,
United Technologies
slipped 1.5% to $77.25, and
Procter & Gamble
(PG) - Get Report
fell 1.4% to $75.03.
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Sector Watch
Investors have rotated their money out of virtually every sector today -- except precious metals. In recent action, the
Philadelphia Stock Exchange Gold & Silver Index
was up 3.8%. The gold rush reflects investors' desire for extreme safety.
Back in the tech arena, the
Philadelphia Stock Exchange Semiconductor Index
ended upo 0.4^% after spending nearly the entire day in the red. Its turnaround notwithstanding, specialty chipmakers
Altera
(ALTR) - Get Report
and
Xilinx
(XLNX) - Get Report
were down sharply, having been downgraded by
Lehman Brothers
this morning. In recent trading, Xilinx was down 3.9%, while Altera was off 1.9%.
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Bonds/Economy
Treasury prices have opened higher as stock market weakness continues to shift investing momentum toward safer government securities.
After being sharply up most of the day, bonds turned down in the final hour;
The benchmark 10-year
Treasury note lately was down 3/32 to 99 6/32, raising its yield to 5.105%.
There are no economic releases due for today.
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Staff reporter Anwar Husain contributed to this article.
