Market Update: The Waiting Is the Hardest Part -- Especially for the Nasdaq

<LI>Dow, Comp both end lower.</LI><LI>Merck hits 52-week high.</LI><LI>Transports helped by airliners.</LI>
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This is not just politics as usual. And for Presidential candidates and stock market investors handcuffed by uncertainty over the election, the waiting is the hardest part.

Even though Republican presidential candidate George W. Bush told reporters that he expects the recount in Florida to confirm his victory over Al Gore, many on Wall Street remained on the edge of their seats and, for the most part, on the market's sidelines. Volume on both the

Dow Jones Industrial Average and the

Nasdaq Composite Index was thin.

Traders, who did play today's session, seemed to have bet on a Bush victory. Sectors that would benefit from a Republican win -- drugs, tobacco, and energy among them -- all traded higher in recent action. Because of his proposal for prescription drug price controls and his tough talk about big business, Gore is viewed as a threat to those industries. Meantime, technology stocks -- which expect to be advantaged by a Democratic presidency -- posted triple digit losses.

Drug giant

Merck

(MRK) - Get Report

, a Dow component, popped 4.5% and hit a 52-week high of $91.69 earlier today. Fellow blue-chip company

Johnson & Johnson

(JNJ) - Get Report

lifted 1.4%. Other pharmaceutical companies including

Pfizer

(PFE) - Get Report

, up 1.3%, and

Eli Lilly

(LLY) - Get Report

, ahead 3.7%, took advantage of today's action. The

American Stock Exchange Pharmaceutical Index

hopped 2.2%.

Tobacco titan

Philip Morris

(MO) - Get Report

gained 4.1%. The

American Stock Exchange Tobacco Index

was up 1.9%.

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Shares of energy giant

ExxonMobil

(XOM) - Get Report

pumped up 1.9%. Other oil stocks that advanced today were

R&B Falcon

(FLC) - Get Report

and

Global Industries

(GLBL)

. The

Philadelphia Stock Exchange Oil Service Index

popped 2.4%.

On the technology front, semiconductor stocks continued to slide amid concerns that networking equipment manufacturers have built up chip inventory, leading to a slow in demand for semiconductors. Shares of

Intel

(INTC) - Get Report

, down 7.6%, contributed the most downside to the Dow in late-day trading. The

Philadelphia Stock Exchange Semiconductor Index

slipped 7.6%.

Cisco Systems

(CSCO) - Get Report

, whose inventory report triggered the selloff in chip stocks, shed 8.2%. This morning, the networking equipment manufacturer was removed from

Morgan Stanley's

"fresh money" buy list.

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Market Internals

Breadth was negative on modest volume.

New York Stock Exchange: 1,299 advancers, 1,478 decliners, 896 million shares. 87 new 52-week highs, 32 new lows.

Nasdaq Stock Market: 1,310 advancers, 2,512 decliners, 1.661 billion shares. 61 new highs, 101 new lows.

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Most Active Stocks

NYSE Most Actives

Nasdaq Most Actives

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Sector Watch

Transport stocks got a lift in late-day action, helped along by the airliners. The

Dow Jones Transportation Average

climbed 0.2%. Component

Northwest Airlines

(NWAC)

gained 0.2%, while

Delta

(DAL) - Get Report

rose 3.5%.

Shares of financial stocks, meantime, dropped amid concern about the election outcome.

Morgan Stanley Dean Witter

(MWD)

and

Lehman Brothers

(LEH)

both dropped about 5%. The

American Stock Exchange Broker/Dealer Index

fell 2.8%.

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Bonds/Economy

Bond prices were trading erratically as the outcome of the Presidential elections continued to hinge on a recount of votes in Florida.

The benchmark 10-year

Treasury note was falling 2/32, at 99 6/32, to yield 5.86%.

Bond prices have slipped sharply over the past few days, albeit on light volume, and some say they have been attempting to account for a Bush win ahead of time. Bush is seen as negative for bonds, while a Gore victory would probably have a positive effect. Yesterday, the market lost ground ahead of the election, and so far, it is sliding again.

TheStreet.com

recently took a close look at how the bond market should

respond to the election.

A few pieces of economic data came out this morning, including the

Mortgage Applications Survey

(

definition |

chart |

source

) and

import price

(

definition |

chart |

source

) index.

The Mortgage Applications Survey for the week ended Nov. 3 fell to 651.2 from 654.6 in the previous week. The Purchase Index rose to 310.5 from 304.6. The import price index for October, meanwhile, fell 0.5% after a rise of 1.2% in September. The export price index slipped 0.1% after a rise of 0.5% in the prior month.

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