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That great

Nasdaq bounce everyone was raving about earlier today faded. But we've gotten used to early enthusiasm for tech stocks that wanes as the day progresses.

Time for a power shake, perhaps?


Dow Jones Industrial Average got some lift off the tech sector, but was getting the most support from

J.P. Morgan


, the banking giant that is merging with

Chase Manhattan Bank


. Morgan, up 5.9% today, has been climbing back in the past week or so from a selloff that started in early September. It's moving higher on general strength for financial stocks today. Hey, if you're buying, why not pick up a cheap one? Chase is also jumping 6% today -- the two stocks tend to move in synch with each other since they announced their marriage plans.

This morning's strong open for the market was fueled by enthusiasm left over from yesterday's rally, darn good numbers from fiber-optics leader

JDS Uniphase



gross domestic product figures that give further credence to a slowing economy.

But hey, it's been a crazy month with dips and bumps no one expected -- and a volatile Friday shouldn't throw anyone off.

Everyone cites poor earnings, the

ever-weakening euro and problems in the Mideast as reasons for the strange happenings in the market recently, but others see gyrations based on cyclical corrections.

Dan Ascani, president and director of research at

Global Market Strategists

, said the market is right on the money as far as where it should be in a 39-month cycle. Every 39th month, he says, the market bottoms to correct itself. He said this theory predicted the lows that were hit during the 1987 crash, Operation Desert Storm in 1990, problems in 1994 and the Asian market crisis in 1997. Ascani said October 2000 is right on schedule for another adjustment.

But he said while the theory works for predicting lows, other factors, including the aforementioned ones, as well as additional cycles, act on the market. So, you can't just say "OK, it's the 39th month, I'm going to make some money off of this."

Ascani said seasonal cycles are also a consideration. Oil stocks, for example, are nearing their peaks and probably should be left alone until spring, while many tech stocks are on track to make gains in the next couple months and are in a perfect position for buying. Still, he said you have to look at each stock on its own merits and then check out what cycle it follows.

Meanwhile, investors were looking at and liking what they saw in

JDS Uniphase


, which issued a bullish outlook for coming quarters as part of its third-quarter

earnings report. It was lately gaining 7.4%.

And while, JDS' news was good, some analysts are skeptical of the mismatch between



and JDS Uniphase's numbers. (

earlier wrote about

Nortel's earnings, which showed a disappointment on the revenue side.) Nortel was lately up 2.8%, after it dropped earlier this week on its earnings report.

But the fun ruckus in fiber-optics was being matched by negativity in biotech on news that



lowered its

sales projections and its earnings forecast.

The third-quarter GDP number, which was released this morning and showed the lowest gain since the second quarter of 1999, certainly bodes well for the end of the

Federal Reserve's interest-rate-hiking cycle. Wall Street, of course, has been anxiously awaiting a definitive end to rate hikes. But the latest GDP numbers could fuel concerns the Fed's interest-rate program is slowing the economy too far, too fast. GDP grew at a rate of 2.7% in the July to September quarter compared to


consensus estimates of 3.4%. For more on the GDP, read a separate

piece on

. We also recently wrote about the kind of impact an economic slowdown would have on

earnings growth.

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Market Internals

Breadth was positive on active volume.

New York Stock Exchange: 1,592 advancers, 1,088 decliners, 605 million shares. 37 new 52-week highs, 47 new lows.

Nasdaq Stock Market: 1,856 advancers, 1,739 decliners, 1.1 billion shares. 29 new highs, 92 new lows.

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Most Active Stocks

NYSE Most Actives

  • AT&T (T) : 25.4 million shares.
  • Nortel: 22.5 million shares.
  • Corning (GLW) : 12.4 million shares.

Nasdaq Most Actives

  • JDS Uniphase: 49.6 million shares.
  • Cisco (CSCO) : 38.3 million shares.
  • Microsoft (MSFT) : 35.4 million shares.

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Sector Watch

Oil stocks were feeling pressured. The darlings of late haven't known which way to go all week. The

American Stock Exchange Oil & Gas Index

was down 1.9%, while the

Philadelphia Stock Exchange Oil Service Index

fell 6.1%.

Optimism was putting financials on the upside. The

American Stock Exchange Broker/Dealer Index

was 2.2% higher.

Merrill Lynch



Lehman Brothers


were two of the sector's strongest movers. The

Philadelphia Stock Exchange/KBW Bank Index

, which tracks the banking industry, lately rose 2.9% and the

S&P Insurance Index

jumped 1.9%.

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Bonds initially rallied after the GDP numbers were released, but then fell back.

The benchmark 10-year

Treasury note is down 6/32 to 100 7/32, pushing its yield to 5.719%.

The 30-year

Treasury bond fell 4/32 to 107 6/32, yielding 5.742%.

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European markets finished strong following JDS' strong earnings release Thursday.


FTSE 100

in London was up 64.20 to 6366.50.


CAC 40

in Paris was 60.51 higher to 6268.93, while the still-rallying

Xetra Dax

in Frankfurt was up 135.61 to 6903.51.


battered euro was climbing back after falling to new lows yesterday, lately at 0.8406.

The major

Asian equity markets ended lower Friday, as technology shares closed out the week with a whimper.

In Tokyo, the

Nikkei 225

closed down 276.2 points, or 1.9%, at 14,582.2, as tech bellwether



suffered heavy losses after posting disappointing earnings.

In Tokyo trading, the dollar traded up 0.13 to 108.37 yen. The greenback was lately at 108.64.

Elsewhere, Taiwan's


index fell 136.7, or 2.3%, to 5805.2, as chip-making giant

Taiwan Semiconductor


fell 3.3%. South Korea's


index slid 8.3, or 1.6%, to 515.3.

Hong Kong's

Hang Seng

index dipped 93.8, or 0.6%, to 14,902.5, as

Pacific Century CyberWorks


fell 0.8% to HK$6.00 ($0.76) and

China Mobile


rose HK$0.50, or 1%, to 52.75.

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