Market Update: No Letup in Bloodletting Unleashed by H-P Earnings Miss

<LI>H-P, J.P. Morgan, lead Dow down.</LI><LI>Nasdaq weak across the board.</LI><LI>Willamette up 32% on acquisition news.</LI>
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If you want to destroy this market, hold this string while buyers walk away.

The

Dow Jones Industrial Average was wheezing as everything came undone for the fifth-straight day. With a merciful closing bell just two hours away, the Dow was off more than a hundred points. The

Nasdaq Composite Index

was faring even worse in percentage terms and looked more than just a little likely to end the day at a closing level unseen since more than 13 months ago. Today was its sixth straight day of losses.

Volume was pretty moderate, a little bit higher than in recent days, but buyers remained in very short supply. Internals on both the

New York Stock Exchange

and

Nasdaq Stock Market

were terrible. On the NYSE losers beat winners more than 2 to 1. Meantime, on the Nasdaq, there were nearly 30 losers for every nine winners. As you can see from the historical chart below, the Comp has had quite a ride in the last 30 years.

Inside the Dow, things looked worse than a movie theater floor after a

Rocky Horror Picture Show

viewing.

Hewlett-Packard

(HWP)

was one of the worst, adding 33 points to the Dow's negative side after it

missed earnings by a wide margin. But it didn't suffer alone. Oh no. Misery loves company and H-P had a lot.

J.P. Morgan

(JPM) - Get Report

added 23 points to the Dow's down side. A grand total of 19 of the 30 blue chips were cow pies today.

But that stench was nothing compared to what wafted from the Nasdaq. Technology-related stocks got destroyed in the wake of the H-P warning, especially the boxmakers and peripherals. Dot-coms offered no shelter from the storm. Instead, safety rested in those battered semiconductor stocks.

The

Philadelphia Stock Exchange Computer Box Maker Sector

fell 1%, while the

American Stock Exchange Disk Drive Index

fell 5%.

TheStreet.com Internet Sector Index

fell 5.1%.

And at 1 p.m. EST, the post-election legal jitterbugging between the Gore and Bush camps continued. U.S. District Judge

Donald Middlebrooks

denied the Bush campaign's injunction request to stop the manual recount asked for by the Gore campaign. The Bush camp asserted that such a recount was unconstitutional. Will this situation clear up anytime soon?

Not very likely.

On a day like this, here's something to think about.

According to a report by retailing body

Confcommercio

, crime in Italy has a $133.3 billion turnover, which equals 15% of the country's gross domestic product. The 'Ndrangheta, southern Italy's version of the Mafia, was singled out as one of the worst due to its active trade in guns, drugs, toxic waste, money laundering and, get this,

selling organs for transplants

. Confcommercio polled magistrates, police, businesses and the Interior Ministry. It released findings today in a report.

Sector Watch

Once again, there really isn't much cover out there for the short-term players. Many sectors continue to feel pressure as buyers stay in short supply market-wide.

First, the good news. Paper stocks took off today, with a serious gain, an actual yes-it-is-really-there-put-it-in-your-pocket-hold-it-in-your-hands gain. The

Philadelphia Stock Exchange Forest & Paper Products Index

rose 3.3%, all thanks to a 32% jump in

Willamette

(WLL) - Get Report

. The paper maker leapt on news that competitor

Weyerhaeuser

(WY) - Get Report

was offering a deal valued at $48 a share in hopes to acquire Willamette.

Savor the good news, because everything else was terrible.

This morning's

Hewlett-Packard's

(HWP)

earnings miss threw the already shaky technology stocks into a tailspin. Pick a sector, any sector. Boxmakers, dot coms, large-cap tech, wireless and telecommunications stocks were all much lower, with things most related to H-P's business taking the brunt of the blow. The biggest victims: the

American Stock Exchange Disk Drive Index

fell 5%, while the

Philadelphia Stock Exchange Computer Box Maker Sector

fell 1%.

Biotechnology stocks took it on the chin, then got one in the stomach and two in the kidneys. The

American Stock Exchange Biotechnology Index

got curb-stomped, dropping 10.8%, while the similarly-themed

Nasdaq Biotechnology Index

fell 8.1%. And like those unhealthy biotechs, other drug stocks got brutalized. The

American Stock Exchange Pharmaceutical Index

fell 3.3%, while the

S&P Health Care Index

fell 3.6%.

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Bonds/Economy

Bonds were maintaining their positive tone of last week because the fixed-income market is benefiting from a run of soft economic data, the rush away from equities and the stalemate in Florida.

The benchmark 10-year Treasury note is at 99 2932, up 8/32, to yield 5.761%.

The 30-year Treasury bond is at 105 26/32, up 16/32, to yield 5.835%.

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