(Updated from 12:09 p.m.)
A phalanx of profit-takers charged out of the gate this morning amid concerns the bull run of April and early May might have been be too premature to toast.
Stocks were trading lower, with every major sector mired in red.
Investors are chary ahead of Friday's important
. Recent economic reports show, at least on the surface, that the economy has been growing more strongly than expected, but unemployment has been rising. Wall Street will pore over the numbers tomorrow for clues about the economy's direction as well as how the
Federal Reserve will interpret the data for its timetable on interest-rate cuts.
Matt Ruane, senior block trader at
Gerard Klauer Mattison
said the market was due for a profit-taking pullback this morning. "I'm not reading too much into this, but we got a little bit ahead of ourselves," he said. The Nasdaq, which finished yesterday up 2.4% to 2220.6, has risen 36% since April 4 -- and through yesterday's close was up 6.9% so far this week. The Dow eased 0.2% to 10,876.68 yesterday.
"We're in a trading range, and there'll be volatility along the way," Ruane said. But he added a hint of optimism for the long run, saying he believes that the Nasdaq has stabilized somewhat.
As investors look for signs of a turnaround in bellwether companies, Goldman Sachs'
Rick Sherlund this morning cast his vote on the software industry. In a
note to investors, the analyst said software stocks would recover first in the overall beaten-down tech sector. "Software is not subject to the need to work down channel inventory levels and is sold more for current consumption, so business could potentially come back more quickly than in other sectors," he wrote.
Most software names were nevertheless lower, along with the general turn lower in the market.
was off 2.7% to $70.21, while
recently slipped 3.3% to $46.32. These stocks are among six software companies Sherlund recommended in his report this morning.
Dow Jones U.S. Technology Software Index
was recently off 2.1%.
Software names weren't the only companies on the losing end. Big-name tech from all areas of business were taking it on the chin.
, which surged 12% yesterday after a
Morgan Stanley Dean Witter
issued an upbeat note about the networking sector, was losing 6.3% to $18.75. Cisco is far from its 52-week high of $71.68.
And the makers of personal digital assistants were having a particularly tough go of it after a
raised concerns about a price war in the sector. He lowered
to buy from strong buy. Both Handspring and
were getting hit. Palm lately was off 14.7% to $8.32. Handspring was 14.9% lower to $14.90.
And watch the semis. The most recent fallout in the sector is
, which last night announced a 12% cut to its workforce, citing an industrywide slowdown. The company said it would take a one-time charge of $1.5 million to $2 million in its third quarter. It lately was slipping 9.5% to $34.20. The
Philadelphia Stock Exchange Semiconductor Index
was 3.5% lower.
Some traders think at least some of today's losses will be reduced. "We're in for a short-term downtick," said Rob Cohen, stock trader at
Credit Suisse First Boston
. "But I won't be surprised if we can pare off the losses in the afternoon."
Bonds were rallying on the stock market's weakness.
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