The Dow needed a new drug by midsession, after its pharmaceutical components failed to rejuvenate a buying spree for the old-economy stocks. But the Nasdaq was getting a buzz from investors who continued to turn to the tech-laden index for their fix.
"The theme is the same: value vs. tech stocks, the old economy vs. the new economy," said James Maguire Jr., managing director at
. "The value stocks are holding their own, but we're not seeing a real rebound," referring to the Dow's early morning gains. "Selling generated more selling on Tuesday. Once the momentum starts going in a one direction, investors follow it. For the moment, the market is just "taking stock" in what we see here."
The drug stocks continued to follow through on yesterday's gains. Dow darling
continued to tack on gains after analysts' positive comments.
"If the market discounts a
victory and discounts the Republicans keeping control of the
, I think pharmaceutical stocks will benefit," said Brian Gilmartin, portfolio manager at
Trinity Asset Management
. "Any potential prescription benefit would be less severe than in a Democratic-controlled
American Exchange Pharmaceutical Index
mounted 4%, while the
Nasdaq Biotechnology Index
Lately, the Dow Jones Industrial Average was down 10 to 9846, with
attempting to strong-arm the index back into positive territory. H-P bounced 6 3/4, or 4.8%, to 147 5/8. But cyclicals like
were just a little too heavy to lift.
Declining oil prices were doing their part to ease inflation and interest-rate fears, making some investors ready for value shopping. "If the market believes that the oil prices have peaked, you might start to seeing a premium on the stable, consistent earnings growers," said Gilmartin.
Maguire agreed that that oil prices had been causing a spill. "Oil prices are somewhat subdued, and that's a bit of a relief."
American Stock Exchange Oil & Gas Index
was falling 1.4%, with
New York Stock Exchange
U S West
were showing strength after Deutsche launched separate bids for the two companies, totaling $100 billion.
The Nasdaq was in solid positive territory, up 82, or 1.7%, to 4979, just 21 points away from crossing the 5000 mark. It earlier traded as high as 4987.05. In Nasdaq trading,
were soaring two days after their merger announcement.
"Nothing is denting techs' momentum," said Gilmartin. "You're starting to see recovery in
, which have significant server business built into
was up 14, or 1%, to 1381.
components had the index bouncing 6, or 1%, to 601. Its stocks have been stealing the spotlight from last year's winning tech-giants like Microsoft and
Breadth was mixed on moderately heavy volume.
New York Stock Exchange:
1,380 advancers, 1,437 decliners, 674 million shares. 50 new 52-week highs, 129 new lows.
Nasdaq Stock Market:
2,222 advancers, 1,855 decliners, 1.2 billion shares. 233 new highs, 89 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.