Skip to main content

Tech Sector Rally Puts Damper on Rubin Selloff

The Dow is still in negative territory but the rest of the major indices have erased their earlier losses posted on Robert Rubin's resignation as Treasury secretary.

So much for the Rubin selloff.


Dow Jones Industrial Average

remained under pressure from the surprise announcement of



Robert Rubin's

resignation, but the tech sector was trading solidly higher.


Nasdaq Composite Index

was up 26 to 2592 and the large-cap

Nasdaq 100

was up 26 to 2202, with


(CSCO) - Get Free Report

captaining the advance. The company, which late yesterday reported strong third-quarter earnings and revenue, was up 5 5/17 to 117 1/8 on a Nasdaq-leading 16 million shares. Internet Sector

index was up a more modest 4 to 658, continuing to suffer from losses in




America Online



(AMZN) - Get Free Report


The Dow remained off 49 to 10,977, but that's a far cry from the loss of 213.34 to 10,812.81 it sustained on the first reports of Rubin's pending departure. The

S&P 500

was up 1 to 1356, having recovered from a low of 1332.95. The

Russell 2000

kept up its recent sterling performance with a gain of 1 to 448.

"I think that it really underscores the actual resiliency of this market," said Paul Rich, a trader at

BT Brokerage

. "It's really an amazing thing. It's just strong, you know?"

The benchmark 30-year Treasury bond was showing that resiliency as well, off its best levels of the day but up 5/32 to 91 31/32. The yield stood at 5.82%.

Equity market internals were mixed.

New York Stock Exchange

decliners were leading advancers 1,630 to 1,130 on 379 million shares. On the

Nasdaq Stock Market

, 1,746 advancers were ahead of 1,684 decliners on 434 million shares. New 52-week highs were outpacing new lows 46 to 14 on the Big Board and 74 to 13 on the Nasdaq.

AOL was the most active issue on the NYSE, down 2 5/8 to 138 13/16 on 12 million shares.

Tech Focus

Among tech-focused indices, the

Morgan Stanley High-Tech 35

was up 1%, the

Philadelphia Stock Exchange Semiconductor Index

was up 2% and the

Philadelphia Stock Exchange Box Maker Index

was up 2%.

The aforementioned Cisco was having a mixed -- at best -- effect on the rest of the networking sector.


(ASND) - Get Free Report

was up 1 15/16 to 98 1/16,

Newbridge Networks


was up 1/8 to 31 15/16,


(COMS) - Get Free Report

was up 1/16 to 27 1/2, but

Nortel Networks


was off 1/2 to 72 7/8 and

Fore Systems


was down 1/16 to 34.

10:39 a.m.: Stocks Recover From Session Lows Hit on Rubin Resignation

Wall Street continued trying to assimilate and analyze the surprising news of



Robert Rubin's

resignation, with major indices recovering from their initial downdraft as traders seize a sudden buying opportunity.

The announcement that the popular Rubin will leave, to be replaced by Deputy Secretary

Lawrence Summers

, sent the

Dow Jones Industrial Average

plunging instantly around 9:45 a.m. EDT. It lost as much as 213.34 to 10,812.81 but lately was down 56 to 10,970. The

S&P 500

was down 4 to 1352, off its low of 1332.95.


Nasdaq Composite Index

was up 10 to 2576, after falling to a session low of 2548.24.


(CSCO) - Get Free Report

, which late

yesterday reported strong earnings and revenue, was almost entirely unscathed by the selling and was continuing to provide the Comp's best support. The networker was up 5 7/8 to 117 11/16. Internet Sector

index was up 3 to 657 and the small-cap

Russell 2000

was off fractionally at 446.

The benchmark 30-year Treasury bond was up 5/32 to 91 31/32, its yield edging down to 5.82%.

"He's thrown up enough trial balloons, we knew he'd do this at some point," said one market analyst. "Now that


is out of danger and world economies have come back, he can go be with his family now. Remember the

New York Times

article about the 'team that saved the world'? The article goes out of its way to talk about how incredibly smart Lawrence Summers is according to everybody from



Alan Greenspan

down. This has been set up since before the crisis."

The source, who requested anonymity, said he'd be buying on any Rubin-resignation-inspired downturn.

"I don't think it changes things a whole helluva lot," he said. "But Rubin is a smart guy and he's been extremely successful at using the system to his ends. It remains to be seen if Summers is as smart as everybody says he is. The world is in somewhat a stronger place than nine months ago, but we're not out of the woods yet. Let's see what happens."

Market internals were weak, especially on the

New York Stock Exchange

. NYSE decliners were leading advancers 1,575 to 912 on 215 million shares. On the

Nasdaq Composite Index

, 1,546 decliners were ahead of 1,489 advancers on 239 million shares. New 52-week highs were outpacing new lows 33 to 8 on the Big Board and 50 to 8 on the Nasdaq.

Rubin reportedly will leave his post in early July. The White House has confirmed the resignation; an official announcement is expected this afternoon.

Senior Writer Aaron L. Task contributed to this update