Today's Market: Gore and Bush Each Wish for Dow's Edge

<LI>J.P. Morgan helping pump up blue-chips.</LI> <LI>Semiconductor stocks edging higher.</LI> <LI>Oil stocks glide lower.</LI>
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"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

Cisco's

(CSCO) - Get Report

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.

The

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

Prudential Securities

. "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

J.P. Morgan

(JPM) - Get Report

, which is merging with

Chase

(CMB)

. 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

Merck

(MRK) - Get Report

, up 2.4%, diversified titan

United Technologies

, ahead 4.2%, and automaker

General Motors

(GM) - Get Report

, higher by 3%.

Most active on the Nasdaq this afternoon were shares of

Oracle

(ORCL) - Get Report

, down 6% and

WorldCom

(WCOM)

, 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

TrimTabs.com

.

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

Philip Morris

(MO) - Get Report

and

R.J. Reynolds

. The Commission alleged the two companies are involvement in smuggling cigarettes into the European Union.

TheStreet.com

wrote a

separate story on the suit. Phillip Morris was lately up 3%, while RJR was gaining 2.9%.

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Market Internals

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 Report: 14 million shares.
  • Lucent (LU) : 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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Sector Watch

Semiconductors were following through on a light rally that began last week, with

Intel

(INTC) - Get Report

2%,

Advanced Micro Devices

(AMD) - Get Report

3.2% higher and

Applied Materials

(AMAT) - Get Report

rising 1.3%. The

Philadelphia Stock Exchange Semiconductor Index

, which has been on a wild ride up and down lately, was moving 2% higher.

The

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.

Cooper Cameron

(CAM)

and

Schlumberger

(SLB) - Get Report

were both lower.

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Bonds/Economy

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%.

The 30-year

Treasury bondis at 105 7/32, 7/32 lower, to yield 5.876%.

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International

European markets saw mixed action today amid earnings releases and the

European Central Bank's

third intervention in the euro in two trading days.

The

FTSE 100

closed up 45.60 points at 6431. On the Continent, the

CAC-40

in Paris dropped 46.68 points at 6352.24 and the

Xetra Dax

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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