The stock market is putting together a modest rally on this, the third-to-last trading session of the year. There's some renewed interest in drug stocks and retailers today, and the maligned technology sector is also pulling its weight, adding some juice to the rally.
That's not to say the rally is particularly convincing, although after a year like this, one can't be too picky. The
S&P 500 is up 0.8%, and the
Nasdaq Composite Index, which had lately gained 27 points to 2520.5, still showed more stocks lower than higher on the day. Looking into next year, however, speculation that the
Federal Reserve will shave a quarter point or so off the current 6.50%
fed funds rate is growing.
Investors are certainly primed for this, based on the steady decline in long-term and short-term interest rates, as well as the
fed funds futures contract, which is currently fully discounting a 25-point rate cut Jan. 31, the date of the Fed's next meeting.
Broad sentiment aside, there are still a few potholes in the market. Today's loser is
, a software security systems provider. The company said
yesterday it expects to lose between $130 million and $140 million in the fourth quarter. It was lately dying, off 67.4%.
Network Associates did not provide earnings-per-share estimates in its release, but the 11 analysts polled by
First Call/Thomson Financial
were previously calling for the company to earn 31 cents a share for the quarter. The company earned 20 cents in the year-ago period. Analysts, such as those at
, have accepted the role of Lord High Executioner this morning, chopping the company's earnings-per-share estimates for 2000 to 9 cents from $1.01.
Herb Greenberg has been following this company for a while and has interesting
insights into its accounting practices.
Retailers were up strong today after the weekly sales reports showed a recovery in consumer demand in the final week of the year. Still, it's a bit late to salvage a lackluster December, as the last week of the month only accounts for about 10% of the monthly sales volume. According to the
Redbook Retail Sales
report, December sales are up 2.1% year-over-year, less than expected.
S&P Retail Index
gained 3.8% today, better than expected.
was bouncing, up 9.3% despite Goldman Sachs, which cut earnings estimates on the retailer.
, which also had its estimates trimmed by Goldman, was lately up 7.2%.
Investors are pouring money into drugs and health care stocks today, lifting a number of those stocks to 52-week highs. Dow component
Johnson & Johnson
is at a new high, up $1.69 to $104.06, while the Amex Pharmaceutical Index is up 1.4%.
Amex Health Care Index
gained 1%, and a number of health care names, such as
were at 52-week highs.
Breadth was mixed on moderate volume.
New York Stock Exchange: 1759 advancers, 1035 decliners, 502 million shares. 218 new 52-week highs, 61 new lows.
Nasdaq Stock Market: 1782 advancers, 2017 decliners, 993 million shares. 89 new highs, 271 new lows.
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Most Active Stocks
NYSE Most Actives
- Lucent Technologies (LU) : 22.1 million shares.
AT&T (T) : 12.3 million shares.
Nortel (NT) : 8.7 million shares.
Nasdaq Most Actives
- Network Associatesundefined: 46 million shares.
JDS Uniphase (JDSU) : 24.9 million shares.
Cisco Systems (CSCO) : 24.6 million shares.
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Similar to yesterday, investors continued to find solace in energy stocks. The
American Stock Exchange Oil & Gas Index
Chicago Board Options Exchange Oil Index
were lately edging higher. Natural gas stocks soared yesterday as natural gas prices hit new 10-year highs. Among the energy stocks hitting new 52-week highs today were
. Oil services stocks were lower, with the
Philadelphia Stock Exchange Oil Service Index
, which tracks the sector, losing 1.5%. Oil service companies had been climbing since the beginning of the month.
Chip stocks, whose fortunes have fallen along with diminished demand for equipment and computers, were stronger. The semiconductor sector has been uniformly lousy for the better part of four months now, and they're seeing a little interest today. The
Philadelphia Semiconductor Index
, which tracks the sector, was up 5.3%. Dow component
was gaining 1%, while rival
Advanced Micro Devices
was up 3.1%.
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Treasury notes and bonds are lower in quiet trading as the market continues to level after its accelerated run over the last two weeks. The latest commercial data further confirmed the fragile state of the economy. But such signs have been frequent of late and the money market has not taken much notice. It seems to be waiting for either a prolonged equities rally or another
Fed announcement before moving substantially either way. Yields for the notes and the long bond are up from their closing levels of yesterday.
The benchmark 10-year
Treasury note lately was down 12/32 to 104 27/32, raising its yield to 5.108%.
In other news, the
index of leading economic indicators
) showed a decline of 0.2% in November following on the 0.3% drop-off in the prior month. The year has so far seen six monthly periods of shrinking economic activity.
BTM-UBSW Weekly Chain Store Sales Index
chart ) rose 3.9% after three consecutive declines, benefiting no doubt from stronger holiday sales towards the end of the shopping season. The
Redbook Retail Average
chart ) has December sales running at the same level as in November.The latest
Mortgage Applications Survey
) release has been delayed by a day.
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European markets were strong after the end of the holidays. In London, the
closed up 120.7 to 6218.2. Meanwhile, on the Continent near the end of the trading day, Paris'
was up 73.42 to 5857.15, while Frankfurt's
rose 75.66 to 6327.06.
Asia markets closed mixed. Hong Kong's
rose 10.15 to 14748.36, while Tokyo's
lost 26.36 to 13981.49.
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