Festivus when you need it?
Thanksgiving's over and so is the giving mood that had the major indices rallying Friday and the Dow up yesterday.
Dow Jones Industrial Average was volatile all day, while the
Nasdaq Composite Index pretty much declined throughout the session and closed at its low point for the year.
Jim Benning, trader at
, attributed the slide in the major indices to this morning's weaker-than-expected
durable goods orders
report which indicated that the pace of economic growth is slowing. It fell 5.5%, which was its biggest drop in three months. An average forecast among economists polled by
was for a 1.3% decline.
the report in an earlier story.
While Benning maintained that the durable goods report was the leading factor today, he also said continuing concern about the election was definitely not having a positive effect.
Meanwhile, most semiconductors continued to fall today after getting slammed yesterday by a series of lowered ratings and EPS views. The
Philadelphia Stock Exchange Semiconductor Index
was down 8.1%.
, which was downgraded by
yesterday, was off 7.8% and
which saw its earnings outlook lowered by
, was off 5.2%. But
, which was also lowered by Lehman, was rebounding earlier, but slid again and was down 1.3%.
Benning said, "There's concern that if we do go into recession, there will be a lot less spending in technology."
There was plenty of evidence of negative sentiment in tech stocks today.
, which has dropped more than $130 in the month of November to trade within $10 of a 52-week-low, announced that it was acquiring Israeli chip supplier
for 7.96 million shares of its stock, valued at $776.6 million based on Monday's closing price of $97.56. The acquisition will become the core of a new Broadcom unit, called
. The news from Broadcom coupled with a cut to its earnings outlook yesterday didn't sit well with investors. The stock was knocked down $12.50 to $85.06.
And it wasn't just the Nasdaq getting hit by tech stocks. On the
New York Stock Exchange,
, slashed numbers and ratings on electronic-components makers
. Vishay plummeted 21.3%. AVX lost 15.7%. And Kemet, which was halted in early trading, sunk 19.6%.
Philadelphia Stock Exchange Computer Box Maker Index
was down today on a note from
Salomon Smith Barney's
Richard Gardner that said PC inventory levels are high and demand is lagging. The note singled out
as having relatively high U.S. retail inventories. Gardner said he was skeptical
would make its targeted fourth-quarter revenue growth and that
might fall short of its revised guidance for fourth-quarter earnings.
Also, blue-chip behemoth
declined $3.69 to $67. Yesterday, the software giant asked an appeals court to throw out a lower court's ruling that would break up the company, saying it wasn't a monopoly and hadn't violated antitrust laws. It stuck the Dow with 22 negative points.
was weighing heavily on the Dow after
Deutsche Banc Alex. Brown
raised some concerns about its merger partner
fourth-quarter earnings. Alex. Brown said the bank could miss estimates because of a drop in the value of publicly traded securities in its investment portfolio.
One industry Benning said he was surprised to see in the red was transports, especially airlines. He said with oil prices down, airlines should be rallying. The
American Stock Exchange Airline Index
was 1.9% lower. Benning said he believes oil prices have peaked, and since oil prices are a very big chunk of operating cuts, that should be favorable for airlines.
Breadth was wretched on moderate volume.
New York Stock Exchange: 1,148 advancers, 1,687 decliners, 1.028 billion shares. 87 new 52-week highs, 97 new lows.
Nasdaq Stock Market: 1,080 advancers, 2,932 decliners, 1.895 billion shares. 31 new highs, 511 new lows.
Back to top
Most Active Stocks
NYSE Most Actives
- Lucent (LU) : 31.9 million shares.
AT&T (T) - Get Report: 18.3 million shares.
Compaq: 17.8 million shares.
Nasdaq Most Actives
- Microsoft: 63.5 million shares.
Cisco (CSCO) - Get Report: 51.1 million shares.
Intel (INTC) - Get Report: 48.8 million shares.
Back to top
Nasdaq Biotechnology Index
dropped 5.7%. Most components were dragging, including
, down 8.8%;
, off 8.5% and
, 14.9% lower.
TheStreet.com Internet Sector
index, which tracks the industry, was off yet again, falling 8.6%. This was the eighth day of losses in the previous nine sessions. So far in November, the
dot-com index has closed higher in just four sessions. Component
was down 7.9%. Earlier the stock hit a two-year low amid concerns of industry-wide slowing advertising revenue.
Also, the sector got socked by
, which fell 10.6% after three different analysts advised caution about Amazon's future.
said the outlook for fourth-quarter sales is still unclear, while competition has increased in the sector and online advertising spending has trailed off.
Banc of America
said Amazon's 2001 growth rate would slow considerably. And while
Dain Rauscher Wessels
advised that shipping costs could be a company concern, it upped its estimates for Amazon's fourth-quarter sales.
Back to top
Treasuries are mixed but mostly higher in response to weaker-than-expected economic data.
The benchmark 10-year
Treasury note lately was up 11/32 at 101 7/32, dropping its yield to 5.587%.
Orders for big-ticket items and consumer confidence were both surprisingly low in reports released today.
Durable goods orders
) fell 5.5%, compared to an average forecast among economists polled by
for a 1.3% decline. A 15.8% drop in orders for transportation equipment was largely responsible; still, the growth rate for durable goods orders slipped to 1.4%, the slowest in nearly two years.
Consumer Confidence Index
) dipped to 133.5 in November, the lowest since October 1999. The index had been forecast to rise to 135.9.
The sluggish economic data is giving Treasuries a boost --the shortest-maturity issues in particular -- by fostering hope that the
Fed will lower interest rates. At the
Chicago Board of Trade
fed funds futures were discounting about a 70% chance that the Fed will lower the rate to 6.25% from 6.5% currently by the end of the first quarter. Yesterday, the futures were discounting even odds of such a move.
Back to top
Over in Europe, markets were sour, like a carton of milk in a dorm room fridge. London's
was off 125 to 6250. Paris
dropped 102 to 6069, while Germany's
slipped 71 to 6626.
were two of the worst London stocks, after news hit that phone watchdog group
was launching an investigation into some new industry practices.
And in currencies, the euro last traded at $0.8563, while the yen was at 110.16.
And Asian markets, well, Asian markets were weak. Japan's
slid 62 to 14,659, as investors sold off following yesterday's nice run up. Lately, the Nikkei's been drawing a lot of its direction from moves on America's technology-laden Nasdaq Composite Index.
The Hong Kong
dipped 37 to 14,566. Steep losses in telecom weighed down the index, while banking and property concerns swung to the upside.
Back to top