The Nasdaq Was Down How Much on Tuesday? Never Mind, Let's Buy

The Nasdaq Comp continues its long, brief trip back from Tuesday's intraday nadir, rising strongly on big-cap tech strength.
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There's no doubt some of the aftershocks of Tuesday's debacle are still being felt. Which makes investing decisions obvious -- why, technology! Of course.


Nasdaq Composite Index

is advancing smartly today, led by well-worn tech names, while the

Dow Jones Industrial Average

is marginally higher, as profit-taking hits financial stocks. There was little reaction to the typically strong March

employment report

, released this morning.

For the Comp, it's a strong, solid advance overall, with breadth nearly 2-to-1 positive, but on light volume.

Monday and

Tuesday took a lot of juice out of the market, so investors are responding, for the third day in a row, by focusing on the most well-capitalized, fundamentally solid technology stocks, despite how overvalued (by conventional standards) they remain.

So while the Dow was up a modest 44, or 0.4%, to 11,158, with the most positive thrust coming from


(INTC) - Get Report

, up 3.9%, the Comp lately was up 126, or 3%, to 4394. The

S&P 500

was up 15, or 1%, to 1516.



(ORCL) - Get Report

, the


(DELL) - Get Report

, the


(SUNW) - Get Report

and the Intels never really broke with that

upward market," said Larry Rice, chief investment strategist at


. "With any degree of skittishness

investors are going to come back to the four horsemen. And you can throw


(CSCO) - Get Report

in there too."

Oracle was lately up 3.3%, Dell gained 5.9%, Sun Microsystems rose 2.9%, and Cisco, the

Nasdaq Stock Market's

most active, was up 2.8% on 28.4 million shares. All of those stocks, save Oracle, finished


on topsy-turvy Tuesday. That bolstered investor confidence -- the sky wasn't falling, they'd say -- and has been a prime factor for the Comp's advance for the balance of the week, despite technicians who believe the Nasdaq needs to re-test the lows.

"Tech investors have been emboldened with the confidence that if you buy dips, you're immediately rewarded, said Alan Skrainka, chief market strategist at

Edward Jones

in St. Louis. "The response from Wall Street to the massive selloff is to 'trade up to quality,' so instead of owning Internet stocks, you buy blue-chips like Oracle, Cisco or Sun."

Not that the market is ignoring Internet stocks today. Internet Sector

index was lately up 33, or 3.2% to 1048, led by the likes of



, rebounding after yesterday's earnings-related selloff.



was up a big 12.3% and



was up 3.2%.


, an online British auctioneer (just in case you need

Oliver Cromwell

memorabilia), was smacked, however, down 7.5%. The stock soared yesterday on a lofty

SG Cowen

price target.

Strong Jobs Report Shrugged Off

But the renewed confidence -- which many still believe is fleeting -- is partially why the market has also shaken off another strong jobs report. (Economists who have gone to great length to dismiss the strength as a bunch of technical factors are also part of the reason.)

New nonfarm payrolls totaled 416,000, stronger than the


consensus estimate of 376,000. Average hourly earnings rose 0.4%, a bit higher than the consensus for 0.3%, but the year-over-year rate of wage growth actually slowed to 3.7% from 3.8%. The 10-year bond was lately up 8/32 to 104 16/32, yielding 5.89%.

Some of the strength is attributable to the hiring of 117,000 temporary census takers. Bruce Steinberg, chief economist at

Merrill Lynch

, in a research note, said the figure was "essentially in line with expectations." However, that reasoning ignores the fact that in this economy, the bulk of those people would have found jobs anyway. The unemployment rate was steady at 4.1%.

"The jobs report didn't point out good news," Skrainka said. "The threat of a rate hike is still there."

Skrainka attributed some of today's weakness in the banks and brokerages to this report, but profit taking is also responsible, because nimble investors have fattened up on these stocks in the last few weeks.


American Stock Exchange Broker/Dealer Index

lost 1.8% while the

Philadelphia Stock Exchange/KBW Bank Index

shed 0.9%. Dow component

American Express

(AXP) - Get Report

was down 0.9%, while

Charles Schwab


lost 4.7%.

Among the banks,

Bank One

(ONE) - Get Report

lost 2% and

Summit Bancorp

(SUB) - Get Report

lost 2.3%.


New York Stock Exchange's

most active stock was Dow component

Philip Morris

(MO) - Get Report

, up 0.3% on 12.6 million shares.


Russell 2000

was lately up 1.5%.


Dow Jones Transportation Average

was down 0.1%, while the

Dow Jones Utilities Average

gained 0.5%.

Market Internals

New York Stock Exchange

: 1,470 advancers, 1,301 decliners, 507 million shares. 44 new highs, 22 new lows.

Nasdaq Stock Market

: 2,475 advancers, 1,429 decliners, 895 million shares. 35 new highs, 36 new lows.

For a look at stocks in the midsession news, see Midday Movers, published separately.