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
, 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
cut the stock to long-term attractive from buy. The firm also socked such Internet infrastructure stocks as
Stocks in the optical sector were getting really messed up with
down 8.4% to $48.44,
dropping 18.4% to $103.06 and
falling 18.3% to $66.63.
couldn't keep their heads above water, while
struggled to stay afloat on the upside.
In merger news,
was down 5.4% to $12.06 after it announced it was buying
transaction worth about $4.7 billion. Lately, IBP was up 5.4%to $28.19.
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
) 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
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.