Today's Market: Dow Struggles Under Weight of DuPont, Nasdaq Ends Solidly Higher - TheStreet

Today's Market: Dow Struggles Under Weight of DuPont, Nasdaq Ends Solidly Higher

J.P. Morgan also hampered the Dow today after skyrocketing Wednesday on ever-present merger chatter.
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Profit-takers broke on through to the blue-chips today, opening the door for tech stocks to rally. For the most part, sector rotation was to blame for most of the

Dow's losses, but an earnings warning from

DuPont

(DD) - Get Report

did its part to hold down the index and leave investors skeptical of future corporate earnings.

At the closing bell, the

Dow Jones Industrial Average

ended down 51.51, or 0.4%, to 11,259.13. Investors went cashing in gains on financial component

J.P. Morgan

(JPM) - Get Report

after the shares flew yesterday on reports that the investment bank was in talks for a possible combination with

Deutsche Bank

. Meanwhile, an earnings warning from DuPont took second place for the biggest loss of the day. The chemical giant fell 11.7%, on news that its fiscal 2000 earnings would miss analyst expectations due to rising raw materials costs.

But, a snapback from the semiconductors put the tech stocks in rally mode, taking the

Nasdaq up 84.31 to 4097.65.

Vitesse Semiconductor

(VTSS)

recovered 13.4%, after Wall Street downgrades on

Intel

(INTC) - Get Report

and

Micron Technologies

(MU) - Get Report

made for two straight session losses for the group.

The

Philadelphia Stock Exchange Semiconductor Index

rose 3.4%.

"More or less, the groups or sectors that led the market lower are doing the brunt of the rebounding," said Steve Goldman, market strategist at

Weeden

. "The Nasdaq gained back a little less than 2/3 of what it lost in the previous session. You still have tremendous volatility associated with the Nasdaq, and it's still trying to weather losing close to 35% between March and April. It's vulnerable to air pockets along the way and I think that's what we're seeing."

Elsewhere, the broader

S&P 500 popped 10.16 to 1502.41, while the small-cap

Russell 2000

bounced 3.8 to 540.12.

Yahoo!

(YHOO)

fell 4.5% despite, somewhat optimistic comments from

Lehman Brothers

analyst Holly Becker on the Internet giant's near-term results. Becker said she is cautious on the stock's outlook due to the slowdown in dot.com advertising.

In a research note,

Merrill Lynch

Henry Blodget expressed his concern over dot.com advertiser's profit warning, but supported

America Online

(AOL)

, Yahoo! and

DoubleClick

(DCLK)

, calling the stocks leaders that will likely fall in line or beat analysts expectations.

TheStreet.com Internet Index

closed the session off 7.7 to 838.29.

Market Internals

Breadth was mixed on moderate volume.

New York Stock Exchange: 1,531 advancers, 1,268 decliners, 978 million shares. 135 new 52-week highs, 36 new lows.

Nasdaq Stock Market: 2,262 advancers, 1,731 decliners, 1.5 billion shares. 94 new highs, 39 new lows.

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Most Active Stocks

NYSE Most Actives

  • Associates First Capital (AFS) : 22.2 million shares.
  • Citigroup (C) - Get Report: 21.2 million shares.
  • DuPont: 17.5 million shares.

Nasdaq Most Actives

  • Microsoft (MSFT) - Get Report: 54.9 million shares.
  • Read-Rite (RDRT) : 38.9 million shares.
  • WorldCom (WCOM) : 38.6 million shares.

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Sector Watch

The

American Stock Exchange Broker/Dealer Index

finished up slightly after yesterday's merger speculation had that sector ringing in new highs.

The

Philadelphia Stock Exchange Oil Service Index

skidded 1.6%, after OPEC said it will up output by 700,000 barrels a day when it meets in Vienna on Sunday. Crude oil prices edged off a little from a 10-year high. Yesterday, after crude oil futures striking $34 per barrel, the group received a cash infusion, as investor grew confident that oil companies would ramp up their capital spending.

The

American Stock Exchange Oil & Gas Index

was fractionally lower.

High-energy prices sent the

Dow Jones Utility Average

to yet another new all-time high level of 377.04.

Peco Energy

(PE) - Get Report

moved up 1.7%, after

Donaldson Lufkin & Jenrette

upgraded the stock to a top pick from a buy.

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Bonds/Economy

Treasuries were lower today on little news, as the economic data drought continues.

The benchmark 10-year note was lately down 5/32 to 99 31/32, moving its yield to 5.3754%.

With no major economic reports slated before next Thursday's (

retail sales and

Producer Price Index) and Friday's (

Consumer Price Index and

industrial production, the Treasury market is biding its time, looking to energy prices and the corporate-bond offering calendar for guidance.

Oil yesterday hit a 10-year high, and the corporate-bond offering calendar is projected to be heavy for the month, competing with Treasuries for investor dollars.

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International

At today's close, the European indices were mixed with London's

FTSE

down 5.5 to 6689, while in Paris the

CAC

was down 37.67 to 6834.46. Germany's

Xetra Dax

was bucking the trend, rising 40.32 to 7373.34.

Asian markets took a little trip lower overnight.

Buying in software and transportation shares countered selling on weak economic data in Japan, but the

Nikkei 225

index shed 99.41 to close at 16,300.46.

Hong Kong's

Hang Seng

index dipped 173.28, or 1%, to close at 17,431.95, largely on investor disappointment with the share placement of

Tom.com

. The firm said it would place up to 60 million shares at HK$5.08 each with an option to see up to 15.8 million additional shares at the same price. With shares closing down HK$0.65, or 11.2%, at 5.15 ($0.66) today, investors wondered why the firm decided to place shares at such a discount.

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