Market Update: Stocks Looking Up in Afternoon Action; Lucent Looking for Its Accountant
The major indices have had a volatile day, but at least lately were on the upside.
The
Dow Jones Industrial Average was recently near its session high, while the
Nasdaq Composite Index was hovering above the flatline.
Still, the breadth on both indices was negative and volume was on the lighter side as investors continue to appraise news from the
Florida's Supreme Court
, which said that it doesn't have a timetable on handing down a ruling over whether to accept the manual hand court.
And so, the election saga and the uncertainty both continue for another day.
Lucent
(LU)
was today's bad news bearer. The telecom equipment-maker announced that it had identified a "revenue recognition issue," which affects $125 million in revenue for its fourth quarter. This represents a 2-cent per share impact on its fourth quarter number, which was previously announced at 18 cents a share.
TheStreet.com/NYTimes.com
joint newsroom wrote more about the
issue in a separate story.
Lucent had guided estimates lower four straight times while missing earnings forecasts all over the place. This morning,
Merrill Lynch
cut its long-term rating on the company to accumulate from buy and slashed its 2001 earnings estimate to 20 cents a share from 65 cents a share. Lucent was off $3.06, or 14.9%, to $17.88, hitting a 52-week-low in the process.
Luckily, the Lucent news was self-contained, as opticals were the primary force driving the Nasdaq's slim gain.
Ciena
(CIEN) - Get Report
,
JDS Uniphase
(JDSU)
and
SDL
(SDLI)
were all making nice upside moves.
Biotechs were also bouncing today.
Prudential Securities
raised ratings on four biotechs to strong buy from accumulate, including
Gilead
(GILD) - Get Report
and
IDEC Pharmaceuticals
(IDPH)
. Gilead was lately up 7% to $69.13 and IDEC was 6.6% higher, to $162.50.
The Dow was getting the majority of help from
Boeing
(BA) - Get Report
, which yesterday announced that it may split a $300 billion jet fighter contract from the Pentagon with
Lockheed Martin
(LMT) - Get Report
. Boeing was up 5.7% to $69.38.
The blue-chip index was broadly higher, with
Intel
(INTC) - Get Report
,
United Technologies
and
ExxonMobil
(XOM) - Get Report
, all contributing 10 or more points to the good.
IBM
(IBM) - Get Report
was countering, with nearly 20 negative points.
Meanwhile, Agilent was up 11.3%, or $5.06, to $49.69 after it reported better-than-expected earnings for its fourth quarter.
TheStreet.com
wrote about the
earnings announcement in an earlier story.
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Sector Watch
The
Philadelphia Stock Exchange Semiconductor Index
continued to fall, lately dropping 3.7%. Computer manufacturers weren't faring any better. The
Philadelphia Stock Exchange Computer Box Maker Index
was sliding 2.1%.
The
American Stock Exchange Airline Index
was jumping 2.7% ahead of the holiday season. This morning,
Goldman Sachs
adjusted its earnings estimates on
Southwest Airlines
(LUV) - Get Report
and
UAL
(UAL) - Get Report
. Southwest was up 6.2% ton $31.94, while UAL was hopping 1.5% to $37.63.
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Bonds/Economy
Treasuries were lately little changed on almost no news. The benchmark 10-year
Treasury note was unchanged at 100 18/32, yielding 5.675%.
In economic news, the
trade deficit
(
definition |
chart |
) swelled to a record $34 billion in September as import growth outpaced export growth. Imports rose 3.1% to $126 billion, while exports fell 0.7% to $92 billion. A much smaller widening had been forecast by economists polled by
Reuters
.
The rising deficit has no clear market implication, but it will probably result in a substantial downward revision to the third-quarter
gross domestic product
(
definition |
chart |
) growth rate, which the government will restate next Wednesday. The initial estimate of 2.7% is likely to be revised to 2%, economists at
Barclays Capital
said.
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