Dow Jones Industrial Average
and the tech-laden
Nasdaq Composite Index
can't seem to agree on anything these days. Continuing an increasingly familiar pattern, the two proxies went their separate ways this morning and, by midday, were still not speaking to one another.
The Dow was cooling its heels, down 82, or 0.8%, to 10,636, after a brisk 198-point run yesterday. Investors did their best to pull the 30-stock average out of the correction territory it tripped into last Friday, but today there was a sense that
yesterday's rally may have been a bit unwarranted, or at least premature. "Investors really want to see that the rally in this market is spread out a little bit," said Jim Herrick, managing director of trading at
Robert W. Baird
But the mix of optimism and eagerness seemed to be having little effect. "Part of it is just yesterday's rise. It was a one-day phenomenon as a result of selling pressure drying up," said Hank Herman, chief investment officer at
Waddell & Reed
in Overland Park, Kan. Herman surmised there is a fair amount of caution in the air ahead of
Elsewhere, what little economic data there were certainly weren't doing any favors for interest-rate-sensitive stocks and cyclicals in general.
showed a 1.5% increase to 1.775 million units for January, edging out economists' forecasts of 1.65 million units. In the bond market, the benchmark 10-year Treasury was down 4/32 to 99 16/32, yielding 6.57%, while the 30-year Treasury was off 11/32 to 99 22/32, yielding 6.27%.
Financials, and particularly
, were feeling some pressure. The
American Stock Exchange Broker/Dealer Index
was down 1%, while the
Philadelphia Stock Exchange/KBW Bank Index
was off 1.6%.
In techland, the Nasdaq Comp was up 19 to 4440, with some of its morning gains starting to drift away. A strong earnings report from
was largely responsible for the show of strength in the semiconductor sector.
The Philadelphia Stock Exchange Semiconductor Index
was up 0.4%.
was also getting a lift, lately up 6.4%, after a better-than-expected earnings report, though its fellow portal buddies were not sharing in the celebration.
TheStreet.com Internet Sector
index was up 6 to 1141, despite the weight of losses in
In late Internet news,
was halted around 1:06 p.m. EST for news dissemination. The stock was down 4 7/8 to 106 9/16 before the halt.
was down 9 to 1393, while the small-cap
was up 6, or 1.2%, to 547.
Looking ahead to Greenspan's testimony, Herman said he expects to hear a cautious tone. "Beauty is in the eye of the beholder. I never saw a time that there wasn't 90 different interpretations" of Greenspan's Fedspeak, he quipped. Still, he predicts we will hear positive talk about productivity tempered with the idea of limits, which are being approached. "We will continue to have these stair-step
interest-rate increases until there is some additional evidence of material slowing" in the economy.
If there is one area in particular that is holding Herman's interest at the moment, it's money supply. "The Fed can hike rates but not be that frugal in terms of providing reserves," he said, noting that a rising-interest-rate environment last fall shared the stage with an increase in money supply. Herman also expressed concern about levels of margin debt but believes attempts to rein it in would come more in the form of Fed "jawboning at the major firms" and reminding them they have some responsibility where margin borrowing is concerned.
Breadth was mixed on the major exchanges, on moderate volume.
New York Stock Exchange:
1,175 advancers, 1,664 decliners, 606 million shares. 44 new 52-week highs, 95 new lows.
Nasdaq Stock Market:
2,016 advancers, 2,014 decliners, 1.06 billion shares. 254 new highs, 61 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.