When Wall Street filled out its last ticket, turned off the screen and pushed its chair back under the desk on Friday, it was in no mood for reflecting on the week that had been, with its crushing selling in anything tech.
It was in no mood for thinking about how fund managers had raced to get recently fallen highfliers off their books before quarter end, nor was it in the mood for trying to figure out what role margin calls may have played in the downturn.
The only thing it was in the mood for, really, was a good stiff drink.
And there we'll leave it, sitting at the bar at the Whitehorse Tavern, playing "Lyin' Eyes" over and over again on the jukebox and waiting for its friends from
, who promised they would show up.
The coming week will probably be better. Many weak holders -- investors who were piling into the market for a quick buck -- have been shaken out, and all those fund managers who were busy selling to spruce up their end-of-quarter statements will be looking to put new cash to work.
But though things may settle, it is probably a mistake to think that things will go back to the way they were before. The latest shakeout suggests that the days of indiscriminate gains in hot sectors are probably over. The market's focus has changed.
Thursday, when the
fell 4% while the
New York Stock Exchange Composite
only slipped 0.6%, a crucial day for John Bollinger, president of
"There are two ways a market can go down," he explained. "Money can be withdrawn or money can be rotated. Money came out of the Nasdaq stocks, but it didn't go to the sidelines. That rotation was enough to prevent the decline from spreading beyond the Nasdaq."
Bollinger laid a lot of the blame for the selloff on portfolio managers who, he said "didn't want to show how much they relied on high-tech and volatile issues, so they bought quality growth." He reckons that move into quality growth -- companies that are growing quickly, but in a more quantifiable manner (e.g. they have
) -- will probably persist.
Bollinger is not alone in thinking this.
"You basically had a market that has gone through kind of a blowoff in tech stocks," said Rao Chalasani, chief investment strategist at
First Union Securities
. "At the same time, you're looking at the discovery of the Old Economy stocks."
Chalasani thinks there are some choppy days ahead, but if the Nasdaq can hold recent levels it can stabilize and move up -- but not in the same manner that it did in the fourth quarter and early this year. "If the Nasdaq makes a new high, it will be based on higher quality stocks going up, not the whole market going up," he said.
The economic event of the week will probably be the March
, but it will be hard to make sense of. The problem is that starting in March, the U.S. Census goes on a hiring spree, and that can wreak havoc with the numbers.
"We're looking for a headline of 400,000 jobs added, but for 110,000 of those to be predictions," said Mike Cloherty, senior economist at
Credit Suisse First Boston
. Not that he is brimming with confidence in this forecast.
"Nobody has a good grip on when these people hit the data," he said. "The Street forecasts are all over the place." He's not kidding.
Morgan Stanley Dean Witter
reckons that 300,000 jobs were added.
Salomon Smith Barney
, an incredible 625,000.