The Dow Jones Industrial Average and Nasdaq Composite Index ended near their session lows as the pre-Thanksgiving session drew to a close.
Miami/Dade County's announcement that it would halt its planned recount of votes in the presidential election had the major indices bouncing. Perhaps the Miami/Dade County impasse had people thinking that whatever the deadline, the result of the election will not change, and Republican
George W. Bush
will be named president.
But Vice President
said that he would immediately seek to overturn the Miami-Dade County decision not to resume a recount of presidential ballots. And after that, the major indices fell.
Florida Supreme Court
decision that the hand recount of votes in that state should continue and must be included in the final tally stung financial markets this morning, which have been in pain since election uncertainty settled in a few weeks ago.
No doubt, the political stalemate took its toll on the market. But by now, investors, who are following the Florida recount with one eye, are looking to fourth-quarter earnings and beyond with the other.
Forecasts for fourth-quarter earnings have taken a nosedive. According to a report released last night by earnings tracker
, analyst forecasts for earnings growth from companies in the
S&P 500 have been almost halved to 8.7% from the 16% expectations that existed as the end of last quarter.
Further, I/B/E/S projects that already lowered analyst forecasts for next year will come down even further in the coming quarter. On average, analysts are now expecting 10% earnings growth for 2001, compared with a forecast of 13.8% at the end of last quarter.
A batch of disappointing earnings news from technology companies hit that sector hard at the opening bell.
Last night, infrastructure company
posted a second-quarter pro forma loss of 9 cents a share, beating the
First Call/Thomson Financial
estimate of an 11-cent loss, and surpassing the year-ago negative 22-cent result. But the company's revenue numbers did not satisfy Wall Street. CacheFlow's stock plunged $39, or 50.8%, to $37.81.
Also on the tech hit list today:
, which last night reported earnings that beat estimates, but was downgraded to an add from a buy this morning by
on concerns of a $25 million to $30 million tax revenue shift from the second quarter to the third quarter. Shares of Intuit dropped $4.31, or 9%, at $43.88.
But not every Nasdaq name took it on the chin today. Shares of
, which was downgraded by
Morgan Stanley Dean Witter
earlier in the week, rallied $6.06, or 5.3%, at $119.63.
, which had its recommendation cut by
on Monday, boosted 4.2% to $32.88 in recent trading.
Fellow net stock
lifted 3.9% to $25.19, while
hopped 2.7% to $4.81.
On the Dow front,
attempted to take the blue-chip index to positive territory. This morning, the soda giant announced that it was no longer courting
, since its board would not back the deal. Shares of Coke popped 7.8%. Quaker Oats on the other hand was off 7.9%.
Other blue-chippers making positive strides as the market heads into the close include
, up 0.7%, and
Procter & Gamble
, ahead 1.9%.
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Investors sought safety in gold today, sending the
Philadelphia Stock Exchange Gold and Silver Index
was up 3.4%.
Financial stocks were lower in recent action. The
Philadelphia Stock Exchange/KBW Bank Index
dropped 2.4%, while
Bank of America
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True to their recent form, Treasuries did very little the day before a holiday. However volume was light in what was an abbreviated session, ending at 2 p.m. ET ahead of Thanksgiving.
The benchmark 10-year
Treasury note lately was flat at 100 28/32, yielding to 5.633%.
Treasuries have been rallying when stock prices fall, and falling when stock prices rise because traders and investors see the stock market as an indicator of future economic activity. If stock prices are falling, they reason, then economic growth will slow, allowing interest rates to fall and bond prices to rise.
In addition, last night's court ruling in favor of Democratic candidate Al Gore's quest for the Presidency also helps the Treasury market. Gore is seen as less likely than Republican candidate George W. Bush to pursue fiscal policies that would erode projected budget surpluses. The Clinton administration has used surplus funds to pay down the national debt by reducing the supply of Treasury securities, a policy that has increased the market value of Treasuries.
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