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Market Update: Stocks' Hangover Lingers as Dow, Nasdaq Weighed Down by Triple-Digit Losses

<LI>Optical stocks getting walloped.</LI><LI>Other tech sectors also getting hammered.</LI><LI>Tyson Foods to buy IBP.</LI>

The major indices were still suffering from hangovers this morning.

So far, the new year hasn't been kind. The

Dow Jones Industrial Average and the

Nasdaq Composite Index were lately at their lows in recent trading

Concerns about disappointing earnings continue to plague the broader market, with investors bailing on stocks across the board. Could relief come in the form of an intermeeting interest rate cut from the Fed? A move before the official

Federal Open Market Committee meeting scheduled for the end of January is starting to be priced in.

Scads of negative notes from analysts today gave the market a rough start and a lower-than-expected number for the

National Association of Purchasing Management's

Purchasing Managers' Index didn't help.

The most actively traded stock on the

Big Board was

General Electric

(GE) - Get General Electric Company (GE) Report

, which was suffering on news that safety officials were looking into several incidents concerning malfunction of its aircraft engines. The stock lately was off 8.7% to $43.75.

A downgrade sapped the life out of data storage company



. The stock was down 16.4% to $55.56 after

Robertson Stephens

cut the stock to long-term attractive from buy. The firm also socked such Internet infrastructure stocks as

Veritas Software

(VRTS) - Get Virtus Investment Partners, Inc. Report





Stocks in the optical sector were getting really messed up with


(GLW) - Get Corning Inc Report

down 8.4% to $48.44,

Juniper Networks

(JNPR) - Get Juniper Networks, Inc. (JNPR) Report

dropping 18.4% to $103.06 and


(CIEN) - Get Ciena Corporation Report

falling 18.3% to $66.63.

Tech heavyweights


(CSCO) - Get Cisco Systems, Inc. Report


Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report



(ORCL) - Get Oracle Corporation Report

couldn't keep their heads above water, while

TheStreet Recommends





(INTC) - Get Intel Corporation (INTC) Report

struggled to stay afloat on the upside.

In merger news,

Tyson Foods

(TSN) - Get Tyson Foods, Inc. Class A Report

was down 5.4% to $12.06 after it announced it was buying


(IBP) - Get Installed Building Products, Inc. Report

in a

transaction worth about $4.7 billion. Lately, IBP was up 5.4%to $28.19.

Sector Watch

Energy sectors were mixed with the

American Stock Exchange Natural Gas Index

down 3.4% and the

American Stock Exchange Oil & Gas Index

1.2% higher and the

Philadelphia Stock Exchange Oil Service Index

up 0.8%. Natural gas was falling on news of an upcoming warmer-than-usual weekend.

Financials were off as they wait for a rate cut. The

American Stock Exchange Broker/Dealer Index

was down 3.6%, the

Philadelphia Stock Exchange/KBW Bank Index

was 1.5% lower and the

S&P Insurance Index

was falling 3.5%.

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Treasury notes and bonds are selling sharply higher as traders, back in full numbers on the floor, react to the latest confirmation of economic weakness. The national manufacturing data released today registered a plunge in factory output, to levels not seen for 10 years. All three major equity indices are declining as a result. Bond yields, which have been steadily declining for the past two weeks, are dipping to levels last seen in the first quarter of 1999.

The benchmark 10-year

Treasury note lately was up 1 13/32 to 106 6/32, lowering its yield to 4.933%.

In economic news, the December

Purchasing Managers' Index


definition |

chart |


) provided stark signs of an economic slowdown. Its reading came in much lower than expected, in contrast with that of the

Chicago Purchasing Managers' Index


definition |

chart ) -- released Friday -- which actually rose. The PMI fell to 43.7 in December, from 47.7 in November, its fifth consecutive monthly decrease and the lowest reading since April 1991. Economists polled by


had forecast a December reading of 47. A reading below 50 indicates that the sector is slowing rather than growing.

The national report thus presents broad-based evidence of manufacturing sector weakness and a complete lack of inflationary prospects. Foreign demand for American-made goods also remains low and producers continue to reduce inventories.