Despite some disastrous downgrades on some semiconductor names this morning, the major indices wriggled into the green shortly after the open -- but the
Nasdaq Composite Index slid down, unable to resist the weight of semiconductors. The
Dow Jones Industrial Average, though, was still up.
Semiconductor stocks were a tangled mess after
Salomon Smith Barney
downgraded semiconductor-equipment makers
Salomon said it downgraded the stocks because of a continued deterioration in the market for general-purpose semiconductor chips. Lehman said that, while it expects both companies to report better-than-expected EPS from revenue growth, it predicts that revenue growth for the next two quarters is likely to slow noticeably as inventory levels rebalance.
Altera was lately down 27.7% to $29.56; Xilinx was lower by 27.2% to $57.63.
Other sector names were suffering, including
, down 10.4% to $32.13, and
, down 11% to $42.63.
Philadelphia Stock Exchange Semiconductor Index
was down 9.9% to 708.1. Bellwether
, however, was inching upward after a month of free fall during which its market capitalization was cut almost in half.
But it's a very mixed market and it's hard to say where stocks will end the day.
After over a month of slogging lower through the nastiest earnings
preannouncement season in a
time, today kicks off
earnings season, with Internet bellwether
and telecom and electronics firm
scheduled to report after the close today. Yahoo! was lately rising, while Motorola was unchanged.
was one of the NYSE's heroes after the European Union said it had approved the automaker's plans to buy diesel-engine manufacturer
"There's a reason why investors are going to hold tight and sit tight. They're not going to make any strong commitments, because you've got earnings from Motorola and Yahoo! after the close and a rise in oil prices," said Hugh Johnson, chief investment officer at
Other companies scheduled to report earnings today include
, a biopharmaceutical company that makes health care products, and forestry products firm
A few companies that warned of earnings warnings last night, such as
, were catching hell from investors. Central Parking was down 8.7% to $17.75, and Silicon Graphics was down 6.5% to $3.63.
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Brokerage stocks were seeing a third day of weakness after getting badly hit Friday by concerns of margin calls and chatter over rumored losses on junk-bond trading. Investors are worried that trading-related losses will hurt the revenues of the big brokerages.
wrote about one brokerage's
denial of the rumors as well as a
preview of financial services sector earnings. The
American Stock Exchange Broker/Dealer Index
was 1.4% lower to 593.5.
Banks and insurance comapnies were also weaker. The
Philadelphia Stock Exchange/KBW Index
was down 2.6% to 835.2 and the
S&P Insurance Index
was off 0.2% to 755.2.
Oil and gas stocks were once again flying on oil prices rising. The
American Stock Exchange Oil & Gas Index
was up 2.7% to 545.1, while the
American Stock Exchange Natural Gas Index
was 3.97% higher to 231.3.
Cold weather and escalating tensions pushed oil prices about 65 cents higher overnight. U.S. oil reserves are already at a 24-year low, and a number of refineries are reducing their capacity this month for maintenance. But Israeli Prime Minister Ehud Barak's decision last night to lift his suspension of peace talks should give oil fears some respite. Barak is giving Palestinian leader Yasser Arafat another chance to quash rioting in the West Bank and Gaza Strip before imposing sanctions.
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Bond prices were under pressure as oil was trading at a two-week high in response to Middle East strife and falling temperatures. Rising oil prices alarm bond investors because they threaten to lift the overall inflation rate. There are no major economic releases today.
Treasury Securities are also concerned about a possible onslaught of new corporate bonds, which compete with Treasuries for investor dollars.
are all expected to float multi-billion dollar bonds before the end of the year. The Unilever deal is expected by the end of next week. The timing of the rest is uncertain, but they are considered likely to come this month.
The benchmark 10-year
Treasury note lately was down 4/32 to 99 11/32, lifting its yield to 5.837
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