The battering continues in the stock market today, as another massive selloff in the optical and networking stocks has the
Nasdaq Composite Index nearing the Oct. 12 intraday low of 3074. The catalyst is yesterday's warning by
, which is experiencing another day of sharp declines.
Dow Jones Industrial Average and the S&P 500 are sagging -- the Dow has been jumping around on both sides of the flatline all day -- as selling spreads to other sectors of the market. In the last two months, the market has undergone an aggressive revaluing of the sectors with the highest valuations, specifically semiconductors, telecommunications, and the fiber-optics companies. However, with many of these stocks having dropped sharply, there's little motivation for investors to buy them due to an uncertain economic picture.
Nortel, a networking and fiber-optics company, and a direct competitor to
, was one of those companies expected to show incredible demand for its products. Sales growth on a year-over-year basis was 90%, which was good, but not what the market was hoping for. The stock is down 2.2% to $43.88 today, while
is off 10.5% to $175.
The market is hoping to see a strong earnings release out of
, a fiber-optics company, to perhaps cauterize the market's wounds. The company reports earnings after the close. The stock was lately down 1.2%.
, however, which were soundly trashed in September, are stronger today, as some feel those stocks have reached bottom.
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The brokerage stocks are continuing to suffer on continued concerns that underwriting fees will decline and hurt earnings in the coming quarter. The
American Stock Exchange Broker/Dealer Index
was lately down 2.8%. The
Philadelphia Stock Exchange/KBW Bank Index
was down 2.5%, and insurance stocks were also getting hammered. The
S&P Insurance Index
Pockets of strength have to exist somewhere, right? Well, they do. The
Dow Jones Transportation Average
is stronger today, gaining 1.3%.
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Bonds are up today, following a down day yesterday.
The benchmark 10-year
Treasury note was lately at 100 21/32, up 7/32, to yield 5.659%.
Treasury bondis at 107 20/32, 17/32 higher, to yield 5.711%.
Economic data this morning were relatively benign.
Employment Cost Index
) for the third quarter rose 0.9%, after a 1.0% gain in the prior quarter. A 1% increase had been expected.
initial jobless claims
) for the week of October 21 were lower at 305,000, from 310,000 in the previous week.
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