(Updated from 9:54 a.m.)
Tech stocks were lately solidly in the green after floundering earlier in the morning. The tech-heavy
Nasdaq, which yesterday dropped back toward the key 3000 threshold, was lately up 46 to 3077. Stocks moved up after a judge in Florida said the votes that are being recounted by hand do not have to be accepted by the Florida Secretary of State.
Dow Jones Industrial Average was higher by 77 to 10,733. And the
S&P 500, which tracks the broad market, was 9 higher to 1382.
After an influential downgrade on communications chipmakers by
reignited fears of a slowdown in the semiconductor area, the Nasdaq lost 133.61, or 4.22%, to 3031.88. Merrill cited inventory concerns, which suggest weakness not only in the chip business, but also in computer and telecom equipment businesses.
While Merrill's downgrade was bad news for tech, investors may not think it's worth another trip below Nasdaq 3000. Aside from Monday's loud crash through that low level, it hadn't been revisited since Nov. 2, 1999. And there was at least a whisper of good news for tech this morning that was keeping the index above that mark.
"We got overdone on the downside, especially on the Nasdaq," said Peter Coolidge, managing director of trading at
Brean Murray Foster Securities
. "I wouldn't expect too much. We got overdone on the downside, so we should probably just get the kind of bounce back we've seen before. If we come off our highs quickly, it's a good sign that it's not sustainable."
Unix systems company
said it is on track to meet earnings targets for the current quarter. Sun also said that demand remains strong.
took a close look at
Battered chipmaking giant
, meanwhile, announced it would launch its new high-speed Pentium 4 chip in a bid to upstage rival
Advanced Micro Devices
in the market for processors that run personal computers. Intel was adding 2.5% in early trading.
And sotware company
was jumping 8.9% after reporting first-quarter results that met Wall Street's reduced targets. Earlier this month, VA Linux had warned that earnings and revenue would miss analysts' forecasts because of a slowdown in new demand from Internet companies. Before the market opened this morning, the company's stock price had lost 89% of its value since March.
Another headliner this morning is book retailer
Barnes & Noble
. Sagging stock prices giving you time to catch up on your reading? The company was upgraded this morning by Merrill Lynch to buy from accumulate. It was lately gaining 18.5%.
But don't let yourself get carried away. Stocks may just drift for a while. And volume will probably remain anemic. At least until we get ourselves a president.
And even then, the market may not feel that such resolution is reason enough for the year-end rally Wall Streeters have been predicting for months.
"The market is treading water until we get resolution -- but even at that point, we still have nagging problem of slowing economy," Coolidge said. "Elections resolution will not necessarily provide a year-end rally."
So what's the latest? A Florida judge will decide today whether Florida Secretary of State Katherine Harris must include late recounts in her final certification of the statewide vote. Harris has already said she won't.
Despite bullish comments from a few bullish strategists earlier this week, investors seem simply in no mood to put new cash into this market.
bull of bulls
Abby Joseph Cohen
said Wednesday that equity valuations are the most attractive they've been all year, and Merrill Lynch's
raised her recommended equities allocation to 60% from 55% that same day.
Mutual fund managers, for their part, certainly have money to put to work. Cash reserves are at their highest level since the financial crisis of 1998. Mutual funds had 5.3% of their assets in cash, on average, at the end of the third quarter, compared with 4% six months earlier, according to the latest numbers from the
Investment Company Institute
, the mutual fund industry's professional association.
And even though the worst quarter for earnings this year is finally winding down, it doesn't look like the future holds anything all that much better. Earnings warnings for future quarters have not let up, and telecom
last night warned it didn't expect to meet earnings estimates for the fourth quarter. It was losing 12.7%. And automaker
was 1.2% lower this morning after it said earnings at its U.S. Chrysler unit will be lower than expected. It also said it would revamp management at Chrysler.
To be sure, many companies are still reporting that their earnings are growing at a healthy clip -- but the pace of that growth is slowing.
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Bond prices were flat this morning after rallying higher Thursday. The benchmark 10-year
Treasury note was lately down 3/32 to 100 16/32, yielding 5.683%.
Bond prices rose modestly on light volume yesterday thanks to sagging stock prices and some soothing words earlier this week from the Fed about the risks of inflation.
The bond market also continued to benefit from the idea that the next occupant of the White House, no matter who it is, will be ineffectual because of the controversy surrounding the election. If so, that will leave in place the recent fiscal trends that have greatly benefited the bond market. Specifically, the bond market has liked the mounting federal budget surpluses, which greatly reduced the issuance of new Treasury securities.
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European markets were flat to lower near midsession on weakness in DaimlerChrysler, technology companies and continuing uncertainty about the outcome of U.S. presidential elections. DaimlerChrysler's shares fell to a new year-low as talk swirled that it would warn investors about losses at its beleaguered U.S. unit
was flat, but had turned into the green, lately up 5.7 to 6436.10.
Over on the continent, stocks were faring less well. The CAC-40 in Paris was off 37.36 to 6245.70 and the
in Frankfurt was 41.63 lower to 6800.48.
The beleaguered euro was lately trading higher at $0.8543.
Asian equity markets took the Nasdaq's renewed slide towards 3000 badly, and most major indices closed lower.
In Tokyo, the
slipped 42.73, or 029%, to 14, 544.30 on weakness in semiconductor stocks.
The greenback was lately trading at 108.91 yen.
index fell 174.87, or 1.14%, to 14,123 as spooked investors stepped in to take profits amid very low volume.
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