In what traders called nothing more than window dressing, the Dow Jones Industrial Average and Nasdaq Composite Index both ended tentatively higher this afternoon.
At the end of a quarter, institutional investors typically tidy up their portfolios to improve their appearance for clients or shareholders. The practice is referred to as window dressing. As a result, portfolio managers will abandon risky positions and revert to safer stocks. And they'll put cash sitting on the sidelines back into the stock market, which helps to boost stocks.
"We're seeing a push-pull at the end of the quarter," said Bob Basel, director of listed trading at
Salomon Smith Barney
. "Institutional investors are selling stocks and window dressing those that they want to show in their portfolios."
Despite today's gains, the earnings picture couldn't get much worse. After the closing bell yesterday, chipmaker
reported earnings that beat consensus estimates. But amid slowing sales, the stock fell 8.3% to $41.49 today. Investors are preparing for an onslaught of preannouncements likely to come from tech companies next week.
"There's nothing really to talk about today," said Jim Volk, co-director of institutional trading at
. "The Nasdaq is treading water after being beaten up so badly." Market internals on Nasdaq were not great, as advancers just edged out decliners.
More bad news about the economy hit the market today, but it was having a muted effect on stocks. Released at 10 a.m. EST, the
Chicago Purchasing Managers' Index dropped to its lowest level since March 1982. The index measures the health of the manufacturing sector, which is considered the most beleaguered area of the U.S. economy. Today's number shows still more weakness on that front.
Today's action comes on the heels of steep losses in the technology sector. A bevy of big-cap tech stocks hit 52-week lows yesterday, and the Nasdaq slipped to a new 29-month low. After two days of selling on Wednesday and Thursday, the index lost 7.7%. The
blue-chip Dow fell 1.6% Wednesday but edged higher yesterday.
Many of the quarter's best-performing stocks on the
S&P 500 were down today, most likely because of profit-taking.
Advanced Micro Devices
shed 6.2% to $26.54,
dropped 2.6% to $9.40, and
shed 2% to $22.07.
One of the best-performing first-quarter names, however, traded higher today:
ended higher by 0.3% to $21.94.
University of Michigan Consumer Sentiment Index, out earlier this morning, confirmed March's spike in optimism seen in the
Consumer Confidence Index released on Tuesday. The index, which measures consumers' attitudes on the economy, rose to 91.5 from February's 90.6.
In other reports today,
personal income and consumption numbers for February were released at 8:30 a.m. EST, and they came in very close to expectations. Personal income growth came in at 0.4%, while spending increased 0.3%. Economists had expected the numbers to be 0.3% each, compared to January's 0.6% for income and 0.7% for consumption.
Leading the Dow higher were shares of
, up 6% to $41.30. According to a report in
is rumored to be courting the financial giant. Citigroup dropped 0.6% to $44.98.
gained 17.1% to $13.47 after it called off its planned $3.2 billion merger with meatpacking firm
. IBP plunged 28% to $16.40.