The end of last week was a veritable gourmand's delight, with investors gorging themselves on stocks of all types and sizes. Today was the day to pick at the leftovers.
Investors today weren't concentrating on lifting long-lost sectors. Nor were they suggesting a shift in sentiment based on earnings releases, economic data or a nagging pain in the stomach. Today investors concentrated on company-specific news, such as the
merger announcement. Within that, they lifted the
Dow Jones Industrial Average and industrial-type stocks, and kicked technology down a stair or two.
Last week's precipitous decline, and the subsequent rebound, represented the market's assessment and swift reassessment of earnings and expectations for the economy in the fourth quarter. A number of strong earnings reports reaffirmed investor faith in corporate profits. Prior to today, 57.4% of the 265
S&P 500 companies already reporting showed results that were better-than-expected, according to
. Year-over-year earnings growth for the quarter is currently 16.7%; the consensus forecast was for 14.2% growth.
Investors took stock in that last week following releases by
, and aren't yet motivated to take the market higher.
"That's not untypical of the middle of the earnings reporting season," said Art Hogan, market strategist at
. "There's no real catalyst on the macro-economic front. Most major events we've sort of priced into the marketplace."
So, investors were sifting through individual stocks and valuing them based on recent news and recent performance. General Electric dropped after the weekend announcement that the diversified manufacturing giant would purchase Honeywell, after the aborted talks between Honeywell and fellow Dow component
last week. Honeywell gained $3.94 today to $98.38 on the news; GE fell $2.50 to $49.75.
The Dow was also helped by positive reactions to earnings releases from
. Overall, however, it was something of a Pagliacci day for the
New York Stock Exchange. Similar to the operatic clown (no, not Andrea Bocelli), it was laughing on the outside and crying on the inside. The outside was the 45-point surge in the Dow, and the inside was poor breadth and uninspiring volume.
Some were no less pessimistic when it came to the technology behemoths. Large-cap technology stocks performed poorly today.
lost $1.44 to $55.88 following a
article questioning the company's accounting practices, while the personal computer manufacturers slid under persistent concern over future demand.
lost $2.58 to $54.40 today and
dropped 94 cents to $27.50. Microsoft's CEO
, speaking at a luncheon, questioned the valuation of technology companies, and traders took their aggression out on his company's stock, knocking it down $3.06 to $62.13, or a 4.7% loss. The stock was the most actively traded on the
Nasdaq Stock Market
today, with 90.5 million shares traded.
Technology stocks have been taken down aggressively in the last six weeks, as investors confronted the specter of slowed economic growth, as well as engaging in a bit of
-style flagellation, in admitting that expectations were perhaps too high. After a couple of strong rallies, the market's in a Missouri mood, looking for more evidence that stocks should continue to rally.
"Those stocks have to show me that Thursday and Friday's rally, particularly in the S&P and the Nasdaq, has legs," said David Sowerby, portfolio manager at
in Detroit. "It's taking that show-me attitude."
Fiber-optics companies, currently reigning as the market's leading sector, were sold today despite
reporting strong earnings and a doubling in sales growth. Corning fell $4.50 to $101.44, a 4.3% loss, after its report prior to today's open, and the "sell-the-news" practice spread to other stocks in the sector.
fell $7.38 to $142.13, while
dropped $7.09 to $331.94.
sunk, after the company
dumped its current CEO and said first-quarter 2001 earnings would fall short of expectations. Lucent fell 56 cents to $22.06.
Breadth was middling on average volume.
New York Stock Exchange: 1,279 advancers, 1,578 decliners, 1.027 billion shares. 49 new 52-week highs, 72 new lows.
Nasdaq Stock Market: 2,080 advancers, 1,874 decliners, 1.66 billion shares. 72 new highs, 99 new lows.
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Most Active Stocks
NYSE Most Actives
- General Electric: 70.6 million shares.
Honeywell: 47.4 million shares.
Lucent: 37.2 million shares.
Nasdaq Most Actives
- Microsoft: 90.5 million shares.
Cisco: 44.7 million shares.
Intel (INTC) : 42.5 million shares.
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Biotechnology and pharmaceutical stocks were strong today. Drug stocks gained after analysts raised their recommendations on Dow component
, helping elevate that stock $2.88 to $84.75 today. Other drugmakers, such as
, were also strong, pushing the
American Stock Exchange Pharmaceutical Index
to a 2.9% gain.
Nasdaq Biotechnology Index
gained 3.9%, on the strength of surges in
, which rose 8.8%, and
, which gained 13%.
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The bond market continued to improve as funds move to safer investments in the face of international unrest. There were no economic releases today.
The benchmark 10-year
Treasury note has ended at 101 5/32, up 11/32 and yielding 5.594%.
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European markets all ended up at the close.
The decision by
and its partners in the mobile-phone consortium
to pull out of Italy's auction for third-generation mobile-phone licenses helped lift London's stocks.
was up 39.60 to 6315.90.
in Paris was up 32.90 to 6182.34, while the still-rallying
in Frankfurt was barely up, 0.35 higher to 6618.78.
The euro was lately trading down to at 0.8350.
Asian equity markets closed mixed Monday, as investors in Japan and South Korea booked some profits. Their counterparts in Hong Kong and Taiwan were able to build on gains made Friday.
In Tokyo, the
closed down 100.8, or 0.7%, at 15,097.9.
In Tokyo trading, the dollar rose 0.75 to 108.22 yen. The greenback was lately trading lower to 108.43
Elsewhere, Hong Kong's
index rose to close 57.8 higher, or 0.4%, at 15,102.4, as heavyweights
put in mixed results. HSBC rose HK$3.00, or 2.8%, to 110.50 ($14.17) and China Mobile fell HK$1.50, or 2.8%, to 52.25.
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