Stocks were getting all of nowhere today.
Dow and tech loaded
Nasdaq slouched into the red near the open, then changed their minds and huffed back into the green, but lost their nerve and faltered again. Both indices and the broad market
S&P 500 had lately managed to cross back into positive territory, but were only just barely staying afloat. Trading volume was practically non-existent
Confused investors are trying to make sense of a flood of earnings reports as they brace for
Federal Reserve chairman
Alan Greenspan's speech before the Senate tomorrow. That speech will likely set the tone for the key semiannual
testimony, delivered in late February, during which Congress gets to grill the Fed chief about the state of the American economy. Themes that are put forth in Greenspan's testimony usually show up in earlier Greenspan addresses, so markets will be paying close attention. It should also give investors some clues about the Fed's plans for interest rates when it meets on Jan. 30 and Jan. 31.
The market has been expecting -- and rallying over -- a half-point cut from that meeting for weeks, but the half-point theory was called into question yesterday. Some bond market pros began to speculate that a half-point cut is too drastic and that a quarter-point cut is more likely.
Fears of recession continue to badger the market, and any signs from the Fed that it won't be as aggressive with rate cuts as they are expecting could bring on some selling.
Justin Lahart yesterday wrote a story about how soft consumer sentiment is
blurring the outlook for economic recovery.
Earnings reports were mixed last night, and several companies announced layoffs.
lowered earnings estimates by 2 cents and revenue estimates by $200 million. The company's CEO, Michael Cappellas,
told analysts to expect revenue to grow 6% to 8% in 2001, well below estimates. Still, the stock was on the rise in recent trading, up 11.9%.
Beleaguered telecommunications equipment maker
earnings estimates by 3 cents, coming out with a 30 cent loss for the first quarter. The company also confirmed that it would slash 10,000 jobs and take a $1.2 billion to $1.6 billion restructuring charge. But investors weren't complaining. The stock was up 3% to $19.38.
Also on the jobs-slashing front were
AOL Time Warner
, and a host of smaller Internet companies.
announced layoffs last night, as
did PC maker
. AOL-Time Warner was up 4.3%, Excite@Home was up 1.5%, and MarchFirst was down 7.4%. Gateway was hopping 1.5%.
Now for the good earnings news. Communications chipmaker
estimates by a penny, reported higher-than-expected revenue and raised guidance for coming quarters. Broadcom was rewarded by
Credit Suisse First Boston
with a boost to its 2001 full-year outlook, but the firm also slashed Broadcom's price target to $175 from $300. The stock was falling 4.3%. It had been climbing out of a recent hole over the past few weeks.
The Dow was getting the biggest lift from
. The tech giant was adding 14 points of upside. Other tech bellwethers also helped, like
Other notable Dow components were
, which both beat estimates. DuPont's estimates had been
previously lowered, however. DuPont was off 0.3%, while ExxonMobil was down 0.2%.
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The banks and brokerage stocks, which have rallied all week, continued to put in a good performance, while the most defensive of defensives -- gold stocks -- were being knocked lower. The
American Stock Exchange Broker Dealer Index
was 2.4% higher and the
Philadelphia Stock Exchange/KBW Bank Index
was up 1.2%.
Philadelphia Stock Exchange Gold and Silver Index
was down 4.1%.
Drug stocks were sagging, despite strong earnings from
American Stock Exchange Pharmaceutical Index
was down 1.3%.
Pfizer's results came in-line with estimates. The company said it saw double-digit revenue growth continuing in 2001. Bristol-Myers came in with earnings of 59 cents a share, topping analyst estimates by a penny.
Bristol-Myers also got an upgrade from Merrill Lynch, but was off 3.4%. Pfizer was up 0.3%.
pulled a Bristol-Myers Tuesday, falling after posting better-than-expected earnings. This morning, Merck got an upgrade to strong buy from
, but that didn't change investors' minds. The stock was falling again, off 0.9% in recent trading. Fund managers and analysts say they are
worried about a series of expiring patents for Merck.
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Treasuries are still feeling the effects of yesterday's news story that suggested that the Fed will make a moderate rather than aggressive cut in interest rates at the end of this month. Selling continued overnight in the shorter-term securities, which derive greater benefit in a falling rate environment.
With mortgage rates remaining at low levels, the latest housing data indicates fairly active refinancing. This is not much news to the money market, which is focused more on tomorrow, when
Federal Reserve chairman
Alan Greenspan will address the Senate Finance Committee, and key employment cost data will be out.
The benchmark 10-year
Treasury note lately was down 7/32 to 103 8/32, raising its yield to 5.314%.
In economic news, the
Mortgage Applications Survey
) showed a slight decrease in new mortgage activity as the Purchase Index slipped to 332.6 in the week ended Jan.19, from 332.9 the previous week. The Refinancing Index remained robust at 2123.3 for the same period, though it is down from 2800.6. Homeowners continue to take advantage of lower mortgage rates to seek better terms. They may also, as happened during the last refinancing boom of 1998-99, use the excess liquidity to make purchases in other consumer sectors, and thus shore up the economy.
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