Milestone fever lost its momentum this morning and, by midday, the
Nasdaq Composite Index
Dow Jones Industrial Average
were looking considerably weaker than they did this earlier in the session.
Yesterday, the tech-laden Comp closed above the 5000 mark for the first time, while the Dow, with somewhat less to celebrate, squeaked back above 10,000 a close it first cracked nearly a year ago.
Though both proxies bounced higher this morning on the benchmark enthusiasm, they were lately off intraday highs, with the Comp up 5.89 to 5052.75, and the blue-chip Dow was down 26.38 to 9984.35. The broader
was down 2.22 to 1399.47, while the small-cap
was inching higher, up 2.86 to 608.91.
"Things are surprisingly quiet, and very orderly," said Bill Schneider, head of U.S. equity block trading at
Warburg Dillon Read
. "It's Friday, people want to close the books."
Still, he said he sees a continuation of the prevailing trend, where people are selling the old economy stocks to buy the new. "Every now and then, the old economy gets a respite."
For today at least, that pattern was less clear-cut than usual, with action and strength looking very selective, especially in the tech sector . The Internet sector was under water with
TheStreet.com Internet Sector
index down 8.15 to 1325.07, weighed down by weakness in
, down 3.2%, and
The pressure wasn't bothering IPO
which was soaring 36, or 189.4%, to 55 3/16 after it was priced last night at $19 a share. The company provides online data storage management.
The chip sector was also flying high with
rocketing 32 15/32, or 8.6%, to 411 15/16. The
Philadelphia Stock Exchange Semiconductor Index
was up 3%.
Schneider pointed to strength in brokerage stocks, citing bottom-line strength from a jump in IPO revenues, a lot of merger and acquisition activity and the fact that the floats on some of the brokerage stocks are not that large. One recent strong performer, he notes, has been
, which was certainly showing some muscle today, up 8 5/16, or 7.7%, to 115 1/2.
"People have decided they really have to buy the brokerage stocks. In previous cycles, if you liked the market, you would buy them since they are proxies for the market," Schneider said. The
American Stock Exchange Broker/Dealer Index
was lifting 3%.
Investors weren't so
glad they used
, which dropped 24.1%, after the soap-maker reversed an earlier forecast of higher earnings and said it expects weaker first-half sales to push profits 10% to 12% below last year's levels.
cut the stock to long-term buy from buy.
, which was also downgraded, was off 11.3%.
The news did not sit well with investors, especially on the heels of
Procter & Gamble's
earnings warning earlier this week. Lately, the consumer products sector was undergoing a little spring cleaning, with P&G down 6.4%, and the
Morgan Stanley Consumer Index
off 1.72 to 431.86.
Going forward, Schneider said he sees more of the same as far as the old economy/new economy debate. "The most successful sectors are drawing the most new money. The Nasdaq will draw in more money from the sidelines, as it holds above 5,000. The doubting Thomases are dancing to the music of the Pied Piper."
In the bond market, the 10-year Treasury was down 3/32 to 100 31/32, while the 30-year Treasury was down 12/32 to 100 28/32, its yield at 6.167%.
Credit Suisse First Boston Global Telecommunications
conference in New York Friday,
Federal Communications Commission
chief William E. Kennard said the agency would conditionally approve
U S West
this afternoon. The approval, as expected, is to be contingent on the combined firm giving up long-distance service in the 14 Western states in which U S West provides local phone service.
Still, state regulatory approval remains a hurdle and the deal could yet unravel.
Breadth was negative on heavy volume.
New York Stock Exchange:
1,189 advancers, 1,581 decliners, 665 million shares. 59 new 52-week highs, 97 new lows.
Nasdaq Stock Market:
1,911 advancers, 2,147 decliners, 1.156 billion shares. 289 new highs, 61 new lows.