(Updated from 9:30 a.m.)
It's a familiar scene. But that doesn't mean it's comfortable for investors.
After drop-kicking the
Nasdaq to new lows, investors this morning are deciding that some select stocks look, well, cheap.
Traders were lifting a few bloodied tech and telecom stocks, such as down-and-out communications chipmaker
, telecommunications-equipment maker
, Internet software company
Applied Micro Circuit
Broadcom was rising after
raised its rating on the company this morning. Broadcom has been mutilated in recent trading and some market-watchers predict that strength in this company could help lead the tech-heavy Nasdaq higher this morning.
data, which were just above forecasts, showed that the U.S. economy during the third quarter was growing at its slowest pace in four years. That information was seen as relatively friendly for the market.
But that wasn't enough to give a real lift to the major stock market indices. The battered Nasdaq edged 4 higher to 2739. The
Dow Jones Industrial Average was gaining 39 to 10,546. And the
S&P 500 moved 5 higher to 1341.
Anxiety abounds about a slowing economy and slowing corporate earnings, as well as about the still unresolved presidential election. Some market-watchers think the only thing that will turn this battered market around is some sign that the
Federal Reserve might cut interest rates in the coming months. And today's numbers are unlikely to be convincing enough. The Fed cuts rates when it needs to re-ignite economic growth.
"This morning's GDP is not enough," said Bryan Piskorowski, market analyst at
. "The market hasn't demonstrated any consistent follow-through in the past few months."
Watch out for
today lowered its fourth-quarter sales estimates on the PC-maker and said the company may issue a cautionary statement at a competitor's technology conference on Thursday. Merrill lowered its sales growth estimates to 24% growth, or $3.04 billion, from 28% growth, or $3.135 billion, but kept its 63 cent earnings-per-share estimate intact. Gateway was off 6.9%.
This morning, GDP came in at a 2.4% rise vs.
consensus poll estimates of a 2.2% rise. Economist had revised their calculations for the quarter down to 2.2% from the previous 2.7% estimate. That compares to a pace of 5.6% in the second quarter. The implicit price deflator, meanwhile, was on par with forecasts of a 2% rise, but down from the second quarter's 2.4% jump. The implicit price deflator is a broad measure of the inflation rate.
Yesterday's soft report on
durable goods orders -- which showed that orders for goods such as appliances and other big-ticket items were slowing -- revived hopes that the Fed might indeed be prompted to lower interest rates in the months ahead.
Following the data release yesterday,
fed fund futures at the
Chicago Board of Trade
discounted 70% odds that the Fed would, by the end of first quarter next year, lower rates to 6.25% from the current 6.5% level.
Before this morning's GDP report, it wasn't looking like presidents of the local Federal Reserve banks were too convinced. Yesterday, Federal Reserve Bank of San Francisco President Robert Parry said he expected the U.S. economy to rebound a bit in the fourth quarter from the third-quarter's lazy pace. Parry said the third-quarter's sluggish pace could be explained by one-time factors such as weaker government spending, which he doesn't expect to continue. And Chicago Fed President Mike Moskow said he still sees economic risks weighted towards inflation.
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Bond prices were inching up again this morning ahead of the third quarter GDP report. But lately, the benchmark 10-year
Treasury note was down 2/32 at 101 4/32, yielding 5.597%.
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European markets had revived a little with strength in U.S. futures, but that strength wasn't expected to last. London's
remained in the red due to weakness in techs and some profit-taking in financials. The FTSE was off 41.50 to 6208.30 as it neared its midsession.
Across the channel, Paris'
was down 6.68 to 6062.54, while Germany's
was off 26.33 to 6599.23.
The beleaguered euro was trading at $0.8655.
Asian markets swung sharply lower overnight. Japan's
fell 151.23 to 14,507.64, while the Hong Kong
tanked 397.16 to 14,169.06.
The greenback was getting 109.82 yen.
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