Today's Market: Meet the New Year, Same as the Old Year -- Stocks Lower in Early Action

<LI>PMI expected to show continued slowing.</LI><LI>Some speculate on rate cut before Fed meets this month.</LI><LI>Tyson, IBP get together for new year.</LI>
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Today, the market's getting its first taste of 2001. Funny, it tastes like the same old crap we had to eat last year.

After months and months of battering, the Nasdaq has made several attempts to recover of late. Early this morning, it seemed ready to make a go of it again, with several big-cap tech stocks moving higher in preopen trading. But preopen trading has been volatile, and tech futures lately slipped into the red. The broader market was sluggish all morning.

At least one trader felt that stock performance at the end of last week did not bode well for this morning's action. On Friday, the major indices tried to rally out of the gate, but closed down.

"They closed at their session lows. That's doesn't look good for today's trading," said Todd Clark, head of listed trading at

W.R. Hambrecht

.

In early action, the

Dow Jones Industrial Average was down 96 to 10,692, the

Nasdaq Composite was down 20 to 2452 and the

S&P 500 was off 2 to 1322.

Once a factory of fortunes for investors everywhere, the tech-heavy Nasdaq was wrecked in the second half of last year as slowing consumer and corporate spending and an inventory buildup began to put a dent in tech-company earnings. Slowing earnings meant overpriced stocks, and the selling took off with a fury.

Now recession worries have begun to cloud the market's future, and Wall Street is anxious to know what the

Fed plans to do to interest rates when it meets at the end of this month. Some market pundits are speculating that the Fed could prompt an "intermeeting" cut in interest rates if Friday's unemployment report shows a greater-than-expected jump in the jobless rate. Such a cut could come as soon as next week.

This morning, investors will get some clues on the economy from the December

National Purchasing Manufacturer's Index

, or PMI, due out at 10 a.m. The experts are expecting the PMI to show continued slowing in the manufacturing sector for December. Economists polled by

Reuters

are forecasting it will hit 47 compared with 47.7 in November. The figure signals expansion in the manufacturing sector when it's above 50 and contraction when below. The PMI is based on a survey of purchasing executives at roughly 300 industrial companies.

While few economists are forecasting a recession for this year, most say recession is a greater risk now than it has been in a long time. A recession is defined as two quarters of negative economic growth.

But even if the economy doesn't slow to recession speed, the kind of downshift that is expected should be felt pretty dramatically, economists say. According to the

Philadelphia Fed's Livingston Survey

, economists are projecting

gross domestic product

growth to slip to 3.1% this year compared with 2.2% in the third quarter and 5.6% in the second quarter of last year. Figures for the fourth quarter have not yet been released.

Meanwhile, last year's champions -- defensive stocks like foods, pharmaceuticals, tobacco and energy stocks -- may continue to steal the show until the market gets a sense of just how much the economy has slowed and how much it will continue to slow. These kinds of companies typically do well in a slowing economy.

Over in the foods aisle of the market, a couple of meatmakers just got meatier.

Tyson

(TSN) - Get Report

agreed Monday to buy

IBP

(IBP) - Get Report

for $3.2 billion, creating what could be the nation's biggest meat company. Tyson, a leading U.S. poultry company, beat out

Smithfield Foods

(SFD)

. The acquisition is part of a wave of marriages between food companies -- and all kinds of companies, really -- this year.

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Bonds/Economy

Treasury prices were soaring this morning. The benchmark 10-year

Treasury note was lately up 12/32 at 105 5/32, yielding 5.063%.

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International

European markets were mixed this morning, showing middling gains in Britain and France and meager losses in Germany.

London's

FTSE

was up 30.30, or 0.49%, to 6252.80. Across the channel, Paris'

CAC-40

was 14.74 higher, or 0.25%, to 5941.16 while Germany's

Xetra Dax

was 6.93 lower, or 0.11%, to 6426.68.

The flip-flopping euro was trading at $0.9423 this morning. It has been gaining slowly in the past few weeks as the U.S. dollar weakens in the face of a slowing domestic economy.

Hong Kong's

Hang Seng

closed down 225.59, or 1.49%, to 14,869.94.

The greenback was rising against the yen, lately trading at 114.915 yen.

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