Stupid joke of the day: What's red and red and red all over?
The stock market is getting it from all sides today, as the major indices are sinking under the weight of decade-high oil prices, a weakened euro and a number of earnings warnings. (Other than that
Mrs. Lincoln, how was the play?)
At last check, just five of the 30 stocks in the
Dow Jones Industrial Average were on the upside, and most of them just barely.
Lately, the Dow was down 208 to 10,582; the
S&P 500 lost 22 to 1438, the
Nasdaq Composite Index fell 43 to 3822 and the
Russell 2000 dropped 3 to 521.
Strategists view this time period, the few weeks heading into earnings season, as a time when bad news unduly affects the market, because its mindset is geared toward accentuating the negative. Higher oil prices contribute to that negative mindset. Despite federal data that shows the rate of inflation remains in check, investors are quite aware that higher fuel costs leave less money for spending and investment by consumers and corporations alike.
"There's some heebie-jeebies on the horizon," said Doug Myers, vice president of equity trading at
. "They keep saying inflation is low, but oil is still on up there."
Predictably, oil and oil service stocks are performing well, as the price of oil was lately trading at $37.50, highest in a decade. The
American Stock Exchange Oil & Gas Index
gained 1.2%, and the
Philadelphia Stock Exchange Oil Service Index
rose 0.9% and oil service name
Outside of the oil sector, earnings warnings were playing a big part in the weakness in communications stocks today. Long-distance carrier
said it expects third-quarter earnings of 45 cents to 47 cents a share, lower than the
First Call/Thomson Financial
consensus for 49 cents per share. The stock was down 5.3% to $26.75.
Other telecom companies were dropping today.
was lately down 5%, and
lost 5.1%. Dow component
The major technology sectors were also performing poorly. Over the last two weeks, concerns about an economic slowdown have become more pronounced, and investors have reacted by questioning technology valuations. The Nasdaq's gains in August were quickly erased, and investors are selling in a number of tech industries, including optical communications names like
, down 3.5% today, and
, off 4.3% today.
"We continue to be nervous about earnings going forward," said Art Hogan, market strategist at
. "The catalysts are oil and currency issues, and you throw all that together with a scheduled bad news season and it's just tough."
Especially because the few sectors that had provided leadership have abdicated said leadership. Through this month, the brokerage stocks have been a source of strength -- largely motivated by consolidation and expectations for more consolidation. Trading desk rumors about
perhaps merging with or getting consumed by Canada's
CIBC World Markets
perked up the brokerage sector, but it didn't last.
Morgan Stanley Dean Witter
bounced early on, but have since been deflated. Lehman itself is still up on the day, as the company reported a 58% gain in profits due to trading operations in its third-quarter earnings report this
Big-cap tech is also dying on the vine today.
are both weaker.
Internet stocks, and their relatives, are also off.
TheStreet.com Internet Sector
index is dropping, down 16 to 776.
Breadth was stinky on strong volume.
New York Stock Exchange: 1,026 advancers, 1,564 decliners, 588 million shares. 39 new 52-week highs, 96 new lows.
Nasdaq Stock Market: 1,324 advancers, 2,321 decliners, 918 million shares. 46 new highs, 111 new lows.
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Most Active Stocks
NYSE Most Actives
- Sprint PCS (PCS) : 17.8 million shares.
AT&T: 14.5 million shares.
Lucent (LU) : 9.9 million shares.
Nasdaq Most Actives
- Intel (INTC) - Get Report: 33.9 million shares.
Cisco: 28.5 million shares.
Dell (DELL) - Get Report: 23.5 million shares.
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Stocks that count fuel costs as a major part of their monthly bill are getting whacked. The
Dow Jones Transportation Average
was lately off 1.8%, and the
Amex Airline Index
Dow Jones Utility Average
continued to lose, dropping 1.5%.
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Bond prices are falling as oil has resumed its record-setting climb. Continuing the recent trend, long-term yields are rising more than short-term ones, indicating that bond investors are worried about faster inflation as a result of rising energy prices.
With oil trading over $37.50 a barrel for the first time in 10 years, the benchmark 10-year Treasury note lately was down 5/32 at 99, lifting its yield to 5.882%. The 30-year bond was faring worse, lately down 19/32 at 104 3/32, boosting its yield to 5.95%.
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European markets were in bad shape at the end of the day.
ended down 123.60 to 6279.9, a 1.9% decline.
Across the channel, the
in Paris ended down 124.52 to 6405.43, and the
in Frankfurt was down 118.09 to 6819.65.
The euro was still losing ground, down $0.8472.
Asian markets traded higher overnight.
A late-day rally in selected technology shares helped nudge key Japanese indices a hair higher Tuesday. But the buying continued to be countered by selling from institutional investors that shed blue-chips ahead of book closings for the fiscal first half.
index rose 63.03 to close at 16,124.19.
index rose 117.04 to close at 15,677.20, reversing the ugly 4% drop recorded yesterday. A bout of short-covering in the futures market, along with property shares rallying helped sentiment today.
rose HK$2.50, or 2.7%, to 94.25 ($12.09), while
Sun Hung Kai Properties
climbed 2.25, or 3.5%, to 66.75.
index declined for the ninth straight session, closing down 6.39, or 1.1%, at 571.17. Investors are still fleeing the market on worries over slowing corporate restructuring. Taiwan's
index also fell 175.24, or 2.5%, to end at 6734.90.
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