SAN FRANCISCO -- The "V" bottom market players were hoping to see needed support hose, but the most public face of technology retained some of its shapeliness today. Meanwhile, investors continued to cast a fetching eye toward blue-chips but grew less enthralled as the day wore on.
Nasdaq Composite Index
failed to sustain an early morning bounce from the harsh selling of the past three days, but ceased caroming at midmorning and enjoyed a sparkling performance after lunchtime. This was the Nasdaq's worst point-loss week ever, with the Comp off about 8% since Monday.
After trading as high as 4559.62 shortly after the open, the tech-angled index declined steadily, trading as low as 4381.38 around 11:15 a.m. EST. Thereafter, the index found its footing and rose to as high as 4606.48 before closing up 114.70, or 2.6%, to 4572.59.
"This rebound is certainly healthy," said Todd Gold, technical strategist at
. "There's no way to portray
yesterday's action as positive, despite the fact we finished strong. But you have to take today's action as a positive. It doesn't mean we've bottomed, but it could be the first step."
The Comp's ability to close above its 50-day moving average around 4541, hold above yesterday's low and recover to close above today's initial spike were significant, Gold said.
The technician foresees the index settling into a trading range in the near-term between 4300 and 5000, with yesterday's low around 4355 a key support level and between 4675 and 4710 likely resistance on the upside.
"The fact the market was able to sell off the way it
did is something to be alarmed about," he said. "We'll see continued volatility in the coming weeks but hopefully
within a trading range. Hopefully, we saw the lows of that range yesterday."
The Comp was led by tech bellwethers such as
rose 7.5% after
made investments in the company through separate
rose 11.6% after selling some of its Net2Phone stake to AT&T, which dipped 2.6%. Yahoo! rose 0.4%.
rose 3.5%, while the
Philadelphia Stock Exchange Semiconductor Index
gained 2.7% and the
Morgan Stanley High Tech 35
Ironically, given the strength of most tech stalwarts,
was the biggest drag on the
Dow Jones Industrial Average
, which closed off 58.33, or 0.5%, to 10,921.92 after trading as high as 11,107.76.
also exerted a big negative influence on the index.
The Dow's tumble in the final hour was described as a result of "end-of-quarter shenanigans," by one market player. Meanwhile, certain individual stocks were enjoying "quintessential, classic end-of-quarter mark-ups," he said. For example.
spiked from around 12 at 3:45 p.m. to as high as 16 1/8 on heavy volume before closing at 15.
Dot.Coms Feel the Pain
Meanwhile, there was continued pain in the Internet sector.
fell 14.1% on
reports the company's business practices are under investigation.
Despite eBay's drag,
TheStreet.com Internet Sector
index rose 11.73, or 1.1%, to 1107.07 after trading as low as 1044.36.
Outside the DOT,
fell 41% after auditors questioned whether the company can continue as an ongoing concern.
Finally, B2B stocks were flayed by a
downgrade. Directly hit were
, down 8.5%;
, off 14.7% and
, which lost 5.6%.
Collateral damage was suffered by others, including
, which fell 17.4% and
, off 10.3%.
"With this kind of volatility, efficient markets are not in the realm of possibility," said Scott Bleier, chief investment strategist at
. But, "the big-cap, blue-chip tech names are holding their gains. They never cracked. They¿ve yet to disappoint. Heaven forbid Microsoft, Intel and Cisco got cut in half."
Simultaneous to the downgrade of the B2B players, Prudential upgraded the property/casualty insurance industry. In a microcosm, those concurrent actions provided a perfect reflection of the broader trend at work of late.
, which benefited from a separate upgrade by
Salomon Smith Barney
, rose 5%. The
S&P Insurance Index
Other formerly out-of-favor groups, such as paper producers, were also on the rise today.
rose 6.5%, helping the
Philadelphia Stock Exchange Forest & Paper Products Index
rose 10.66, or 0.7%, to 1498.58 behind strength in select big-cap tech, cyclicals and transportation stocks. The
Dow Jones Transportation Average
rose 83.77, or 3.1%, to 2763.24 while the
American Stock Exchange Airline Index
gained 7.51, or 1.4%, to 539.08 as breadth improved noticeably.
New York Stock Exchange
trading, 1.210 billion shares were exchanged while advancers led declining stocks 1,974 to 1,072. In
Nasdaq Stock Market
action 2.093 billion shares traded while gainers led 2,502 to 1,812. New 52-week highs bested new lows 83 to 69 on the Big Board and while new lows dominated 224 to 48 in over-the-counter trading.
Amid the cautious optimism about the Comp's rebound, Edward Kerschner, chairman of investment policy at
issued a harsh outlook for certain high-tech stocks.
"Even after recent price declines, valuations of 'new, new industrials' still look excessive by traditional metrics," Kerschner wrote in a report. "Further price declines seem likely."
The strategist made a distinction between "old new industrials" such as Microsoft and Cisco and so-called high flyers, although he did not mention specific stocks in the latter category.
"The growth opportunity in the New Economy is for real, but so too is the need for equities to have earnings," he wrote.
Among other indices, the
Dow Jones Utility Average
rose 2.01, or 0.7%, to 291.77 and the
American Stock Exchange Composite Index
rose 9.04, or 0.9%, to 1005.03.
The price of the 10-year Treasury note rose 9/32 to 103 18/32, its yield declining to 6.02%.
For the week, the Dow slid 1.7%; the S&P 500 lost 1.9%; the Nasdaq Comp tumbled 7.9%; the Russell 2000 shed 6.1%; the DOT tumbled 13%; the Dow transportation average rose 2.8%; the Dow utility average gained 1.6%; and the Amex composite shed 2.7%.
For the month of March, the Dow rose 7.8%; the S&P climbed 9.7%; the Comp lost 2.6%; the Russell declined 6.7%; the DOT declined 6.4%; the transports leapt 15.7%; the utility average rose 1.1%; and the Amex composite climbed 3.3%.
For the first quarter, the Dow fell 5%; the S&P 500 rose 2%; the Comp climbed 12.4%; the Russell added 6.8%; the DOT shed 4.1%; the transports fell 7.2%; the utility average gained 3%; and the Amex composite rose 14.6%.
For coverage of today's top stocks in the news, see the Company Report, published separately