"Don't just do something, stand there!" Wait, that's not how the saying goes, but it seems to be the advice some investors have taken in afternoon trading today.
Ahead of technology (and market) bellwether
earnings release this evening -- and as the closest presidential race in 40 years nears the finish line -- many market players have decided to sit this session out.
Those who haven't, have nothing to sneeze at.
Dow Jones Industrial Average was bouncing giddily higher, but volume is light for a Monday. The new economy heavy
Nasdaq Composite Index was struggling for direction. Volume on both indices is the lowest since July.
"To see the market treading water ahead of tomorrow's election is not surprising," said Bryan Piskorowski, market analyst at
. "The market can't discount a campaign that is this close. By now, the market would have expected to know the election outcome. But it doesn't. And that is creating inertia today."
"We're seeing short covering ahead of the election and Cisco's earnings announcement," said Patrick Boyle, head financial trader at
Credit Suisse First Boston
. When investors cover their shorts, they buy shares to pay back stock they borrowed in anticipation the price would fall and they'd be able to pay back the loan with cheaper shares. Buying shares to cover shorts, helps send the market higher. And it generally signals that short-selling investors have reversed their bearish opinions and believe the market will go up.
Helping the Dow see the upside today are stocks that saw the downside last week. Today's top gainer has been
, which is merging with
. Along with J.P. Morgan, the financial sector was having a decent day. The
Philadelphia Stock Exchange/KBW Bank Index
was up 1.5%.
Other Dow leaders this afternoon include pharmaceutical giant
, up 2.4%, diversified titan
, ahead 4.2%, and automaker
, higher by 3%.
Most active on the Nasdaq this afternoon were shares of
, down 6% and
, up 2.4%. Cisco, today's most-watched company, was lower by 2.3% ahead of its earnings announcement that will be released after the close today. Last week, the tech giant's stock boosted almost 15%.
Cisco's eagerly anticipated earnings release packs a lot of punch. With a $400 billion market capitalization, Cisco's results will help guide the market. The networking equipment manufacturer has beaten earnings estimates for 14 straight quarters, but some worry it may have reached the end of its earnings growth rope. Several tech darlings have blamed a
slowdown in capital spending for earnings weakness going forward.
As companies release information on their most recent earnings, investors listen just as closely to what companies are saying about their upcoming earnings periods. And after a rocky
third-quarter earnings period , the market is rebuilding itself. "From a valuation standpoint, we're now on better footing," Piskorowski said. "But there's no quick fix to this market."
In fact, Piskorowski points out that there is a lot of money on the sidelines. "There is currently $1.7 trillion sitting in money market mutual funds," he said. And U.S. stock mutual funds increased the
amount of cash on their books from the end of August to the end of September, according to
And tobacco companies were brushing off news that the European Commission filed a civil lawsuit in a U.S. court against U.S. tobacco titans
. The Commission alleged the two companies are involvement in smuggling cigarettes into the European Union.
separate story on the suit. Phillip Morris was lately up 3%, while RJR was gaining 2.9%.
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Breadth was mixed on modest volume.
New York Stock Exchange: 1,383 advancers, 1,253 decliners, 546 million shares. 68 new 52-week highs, 24 new lows.
Nasdaq Stock Market: 1,777 advancers, 1,934 decliners, 928 million shares. 67 new highs, 67 new lows.
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Most Active Stocks
NYSE Most Actives
- PCS (PCS) : 15.1 million shares.
AT&T (T) - Get AT&T Inc. Report: 14 million shares.
Lucent (LU) - Get Lufax Holding Ltd American Depositary Shares two of which representing one Report: 12.5 million shares.
Nasdaq Most Actives
- Oracle: 48.1 million shares.
WorldCom: 38.8 million shares.
Cisco: 34.5 million shares.
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Semiconductors were following through on a light rally that began last week, with
Advanced Micro Devices
3.2% higher and
rising 1.3%. The
Philadelphia Stock Exchange Semiconductor Index
, which has been on a wild ride up and down lately, was moving 2% higher.
Philadelphia Stock Exchange Oil Service Index
, which has surged along with oil prices lately, was down 1.6%. It was brought down by nearly every component.
were both lower.
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Bonds traded lower this afternoon in light volume, ahead of tomorrow's elections. There was no new economic data directing the bond market today.
The benchmark 10-year
Treasury note is at 99 3/32, down 10/32, to yield 5.872%.
Treasury bondis at 105 7/32, 7/32 lower, to yield 5.876%.
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European markets saw mixed action today amid earnings releases and the
European Central Bank's
third intervention in the euro in two trading days.
closed up 45.60 points at 6431. On the Continent, the
in Paris dropped 46.68 points at 6352.24 and the
in Frankfurt was up 28.98 points at 7157.25.
The ECB intervened for the third time in two trading days to boost the value of the euro. Like Friday's interventions, the ECB acted without help from the U.S. or Japan. The intervention did support the currency, but wasn't giving it much of a boost. The euro initially rose by about 1 cent to $0.8720, but had recently fallen back to about 0.8669.
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