Market Update: Nasdaq Selling Still the Rage; Dow Ekes Out Gains
The market floundered at the open this morning as investors timidly nibbled selectively at Old Economy and tech stocks.
The
Dow was lately adding grudgingly to Monday's gains, while the
Nasdaq was following through on its late-in-the-day Monday selling.
But who knows where the indices will end up? Uncertainty over future earnings growth and continuing anxiety over the election outcome hang like a deep sea fog over this market, clouding its direction for what remains of the year.
Another
ugly call on tech stocks this morning wasn't any good for tech sentiment. Especially after the Nasdaq slipped so dramatically off its early day rally yesterday afternoon. Still, the analyst call hit the small stuff -- electronic-components makers. PC-makers and a few optical equipment makers were managing to eke out some gains.
Merrill Lynch's
influential analyst,
Jerry Labowitz, slashed numbers and ratings on electronic-components makers
Vishay Intertechnology
(VSH) - Get Vishay Intertechnology Inc. Report
,
AVX
(AVX) - Get AVX Corporation Report
and
TheStreet Recommends
Kemet
(KEM) - Get KEMET Corporation Report
. Vishay was lately falling 16.4%. AVX was whacked down 16.5%. And Kemet, which was halted in early trading, was off 21.8%.
Overall, the semiconductors continued to fall today after getting slammed yesterday by a series of lowered ratings and EPS views. The
Philadelphia Stock Exchange Semiconductor Index
was recently down 2.3%.
Ariba
( ARBA), which was downgraded by
Wit Soundview
yesterday, was off 3.8% and
Altera
(ALTR) - Get Altair Engineering Inc. Report
which saw its earnings outlook lowered by
Lehman Brothers
, was off 1.2%. But
Xilinx
(XLNX) - Get Xilinx Inc. Report
, which was also lowered by Lehman, was rebounding 2.4%.
And there was a smattering of buying in a few tech bellwethers. Networker
Cisco
(CSCO) - Get Cisco Systems Inc. Report
, PC-maker
IBM
(IBM) - Get International Business Machines Corporation Report
and software company
Oracle
(ORCL) - Get Oracle Corporation Report
were keeping their heads just above water. IBM was 1.3% higher, while Cisco was up 1.4% and Oracle was lately flat.
Over on the NYSE, telecom-equipment maker
Lucent
( LU),
General Electric
(GE) - Get General Electric Company Report
and
AT&T
were getting quite a bit of investor attention; they were the most actively traded stocks on the exchange. Lucent continued to fall after the company disappointed investors
again
early last week. Lucent said it had incorrectly reported fourth-quarter results and could no longer confirm its first-quarter guidance.
General Electric was rising after it named Jeffrey Immelt to succeed Chairman and CEO Jack Welch when he steps aside at the end of 2001. And AT&T was trading on the news that it had named David Dorman its new president. Dorman was previously the CEO of Concert, a joint venture between AT&T and British Telecommunications. GE was up 0.9% and AT&T was falling 2.3%.
The Dow was just barely afloat, as powerful losses in
Microsoft
(MSFT) - Get Microsoft Corporation Report
and
Eastman Kodak
( EK) weighed in heavily. Microsoft was off 4.4% to $67.56. Kodak continued a renewed slope downward over the past month, off 5.4% to $41.56.
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Sector Watch
Yesterday's rally in retail was pretty short-lived. The retailers rallied on news that retail sales exceeded expectations after the Thanksgiving holiday. Analysts watch this time closely for clues about how spending will go throughout the holiday season.
But market observers think most of that strength is due to big discounts, which aren't good for retailers in the long run. Some are recommending that investors sell off of yesterday's rally, and investors are listening. Merrill Lynch this morning cut
Gap
(GPS) - Get Gap Inc. (The) Report
to intermediate-term accumulate from buy. It was lately off 5.3%. Other retailers were also lower; the
S&P Retail Index
was falling 1.1%.
Retail stocks have been falling on fears that the slowing economy and weaker stock prices in general would keep shopper's wallets closed during the most important time of the year for retail sales.
Defensive stocks were getting some juice from tech selling, with drugs, tobacco, energy and paper stocks seeing a bit of green light.
Financials were also higher after Goldman Sachs raised financial giant
Lehman Brothers
( LEH) to market outperformer from market performer. The financials have been under pressure lately on credit risk concerns.
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Bonds/Economy
Bond prices were rising this morning following the cooler-than-expected durable goods orders number. The benchmark 10-year
Treasury note was up 6/32 at 101 2/32, yielding 5.605%.
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