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Today's Market: Dow Feeling That Holiday Spirit; Financials Surging

Back from the long weekend and with the Presidential matter closer to being settled, investors are coming back to stocks.
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Relaxed and maybe a couple pounds heavier, investors were full of good will toward stocks.

Lately the

Dow Jones Industrial Average and the tech-laden

Nasdaq Composite Index were off their highs. The Dow was near triple-digit gains, while the Nasdaq was starting to slide a bit toward the flatline.

Today's rally was extended from Friday's shortened session.

Doug Meyers, vice president at

Wachovia

, said the rally will be a short-lived one. His take on what's making the market move is people go home, talk to friends and family about the stock market and then come in on Monday and buy the stocks they talked about. Meyers said a rally similar to this one has happened the week after Thanksgiving for the last several years.

So, can these gains be sustained? Well, concerns about how much the pace of economic and corporate growth is slowing haven't gone away and presidential election uncertainty is still floating around -- does that answer the question?

If it doesn't, Meyers offers up that "something sort of macro has to happen to keep the direction pointing upward."

"Right now we've got a nice little rally going. People are finally comfortable with stocks at these prices and comfortable with seeing some of the high flyers at these prices," Meyers said. Investors have commiserated over the drops and now are running out and buying stocks to round out their portfolios, he added.

Meanwhile, the Dow was getting a lift from financials

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. Report

and

American Express

TheStreet Recommends

(AXP) - Get American Express Company Report

. Also, the world's largest retailer

Wal-Mart

(WMT) - Get Walmart Inc. Report

was jumping after it said that sales at stores open at least a year rose 4% to 6%.

Blue-chip company

General Electric

(GE) - Get General Electric Company Report

this morning named Jeffrey Immelt as the new president and chairman-elect of the conglomerate to succeed Jack Welch when he retires at the end of 2001. In recent action, General Electric was up 31 cents, or 0.6%, to $49.63.

Over on the

New York Stock Exchange,

Micron Technology

(MU) - Get Micron Technology, Inc. Report

was off 4.9% to $38.81 after it was upgraded to strong buy from buy at

Banc of America

, but had its EPS estimates for 2001 cut by

ABN Amro

.

The Nasdaq was feeling some pressure from

Commerce One

(CMRC)

, which was down 8.3% to $36.06 after it announced it was working with business-to-business e-marketplace

GTWeb Korea

, which is a conglomerate comprised of

LG Electronics

,

Hyundai

,

Kumho

and

Samyang

that will offer businesses real-time buying and selling capabilities. That alliance had Commerce One jumping in pre-open action, but an analyst downgrade knocked the wind out of its rally.

Wit Soundview

cut its recommendation on Commerce One and

Ariba

(ARBA)

, citing slowing growth rates,

TheStreet.com's

sister site

RealMoney.com

reported. Ariba had lately dropped 10.8%, to $70.

Another SOX component hit with a downgrade was

Cypress Semiconductor

(CY) - Get Cypress Semiconductor Corporation Report

, which got cut by

Prudential Securities

to accumulate from strong buy. The firm said it believes further upward estimate revisions are unlikely and that visibility for future quarters is not as strong as it has been for last several quarters. The new price target is $42, down from $75.

Also,

Lehman Brothers

lowered its earnings forecasts for chipmakers

Xilinx

(XLNX) - Get Xilinx, Inc. Report

and

Altera

(ALTR) - Get Altair Engineering Inc. Class A Report

, citing slower demand in November. Lehman believes that neither of the semiconductor manufacturers will meet their 12% quarter-over-quarter growth targets for the fourth quarter. Xilinx tumbled 14.7% to $48.50, while Altera fell 11.2% to $27.69.

And shares of communications semiconductor manufacturer

Broadcom

undefined

fell 14.2% to $100.38, on the back of a downgrade from

Salomon Smith Barney

. Citing "signs of flattening orders in Broadcom's supply chain," the investment house cut its 12-month price for the company.

The

Philadelphia Stock Exchange Semiconductor Index

was recently down 5%.

Still, not everything was bad on the Nasdaq.

Greater Bay Bank

(GBBK)

was bouncing 9.4% to $32.88 after it said it expects to beat analysts' estimates for its fourth quarter.

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Market Internals

Breadth was positive on moderate volume.

New York Stock Exchange: 1,523 advancers, 1,160 decliners, 485 million shares. 58 new 52-week highs, 39 new lows.

Nasdaq Stock Market: 1,880 advancers, 1,836 decliners, 927 million shares. 32 new highs, 124 new lows.

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Most Active Stocks

NYSE Most Actives

Nasdaq Most Actives

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Sector Watch

High-tech stocks have gotten a bounce in recent action. Shares of

Yahoo!

(YHOO)

had boosted 0.9% to $41.25, while

eBay

(EBAY) - Get eBay Inc. Report

had gained 1.4% to $37.44.

eToys

(ETYS)

has continued to ride out Friday's rally and was lately up 10.3% to $2.

The

S&P Retail Index

was moving up 4.5%.

Kohl's

(KSS) - Get Kohl's Corporation Report

,

Gap

(GPS) - Get Gap, Inc. Report

and

Wal-Mart

(WMT) - Get Walmart Inc. Report

were the sector's big gainers after one of the busiest shopping weekends of the year.

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Bonds/Economy

Treasuries are under pressure in reaction to rising stock prices and the prospect that

George W. Bush

will be the country's next president.

The only economic news of the day -- the

existing home sales

(

definition |

chart |

source

) report for October -- was weaker than expected, a positive development for the bond market because it suggests the economy is slowing. The pace of existing home sales fell to 4.96 million from 5.16 million in September. Economists polled by

Reuters

had forecast a rate of 5.14 million, on average.

The benchmark 10-year

Treasury note lately was down 2/32 at 100 24/32, lifting its yield to 5.647%.

The stock market has been the principal influence on the bond market lately. If stock prices are rising, then bond prices fall, and vice versa. Bond investors reason that rising stock prices indicate a strengthening economy, necessitating higher interest rates and lower bond prices.

At the same time, Treasury market participants view the prospect of a Bush presidency as likelier than an

Al Gore

presidency to change fiscal policy in ways that will lead to smaller budget surpluses. Surpluses are positive for the Treasury market because they lessen the government's need to issue additional notes and bonds.

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International

European markets got a boost from telecom and technology stocks.

At the close of the day, the

FTSE 100

was up 47.10 to 6374.70.

Over on the continent, the

CAC-40

in Paris was 25.68 higher to 6171.33 and the still-rallying

Xetra Dax

in Frankfurt was up 47.48 to 6711.66.

The euro lately was at $0.8516.

Asian equity markets closed up overnight.

In Tokyo, stocks the

Nikkei 225

added 405.04 to 14,720.4.

The greenback jumped higher to 110.57 yen.

Hong Kong's

Hang Seng

index rose 225.86 to 14,602.76.

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