The market's made a habit out of bouncing back and forth. For a time, tech stocks were strongest, but they've recently faded, with the
Nasdaq Composite Index falling into the red on this, the penultimate session of what's been the worst year for the stock market in a long, long, time.
Breadth, it should be noted, has been strong for the second straight day, a contrast to recent months, when the major indices would move higher despite poor internals. Today, more stocks are rising than falling, despite the lackluster performance out of the major indices. The PC sector is coming under fire after
trimmed revenue estimates on
Dow Jones Industrial Average was up 24 to 10,827; the
S&P 500 lost 1 to 1328, and the Comp was off 10 to 2529.
Pru cut fourth-quarter revenue estimates for IBM to $24.5 billion from $25.3 billion, citing weak software and PC sales. The stock was lately unchanged at $84.69. Pru trimmed its revenue estimates for Dell to $8.29 billion for the quarter from a previous estimate of $8.38 billion. Lately Dell was traded off 2.4% to $17.56. The
Philadelphia Stock Exchange Computer Box Maker Index
was recently down 1.5%.
Other major technology indices had fallen into the red, as buying interest waned heading into the afternoon. The
Amex Networking Index
fell 0.9%; the
Nasdaq Telecommunications Index
dropped 0.3%, and the
Philadelphia Stock Exchange Computer Semiconductor Index
lost 0.6%. Big-cap technology stocks were having a rough go of it today, including the likes of
, lately down 3.9% to $29.16, and
, down 4.2% to $44.50.
The defensive stocks were carrying their weight, however.
Johnson & Johnson
, which hit a 52-week high yesterday, was once again at a new high, rising 1.7% to $104.75. Health-care stocks were in good shape as well, with names such as
once again hitting 52-week highs. The
Amex Healthcare Index
lately was up 1.2%.
Sentiment has improved in the last couple of days. There's a growing feeling that the
Federal Reserve will soon cut interest rates, which would at least provide a psychological boost to investors. Interest-rate cuts, however, won't eradicate existing problems within the stock market, such as the reduced demand and debt issues plaguing quite a few companies. These issues asserted themselves most prominently in the telecommunications sector -- even if the Fed eases credit, those companies still have debt to pay.
But conviction that all this is going to settle in an orderly fashion with lots of stocks going up doesn't quite seem to be there yet. With the exception of energy and aerospace names, the stocks dominating the charts are defensive names, such as pharmaceuticals, healthcare and insurance stocks. Among those hitting 52-week highs today are
, a medical supply company and
A couple of earnings warnings hit the Street since yesterday's close. Last night,
, the nation's largest railroad company, said it planned to cut 2,000 jobs and take a charge of 26 cents a share in the fourth quarter. The stock was down 4.9% to $50.06 in trading today.
(they make toilets -- lots of 'em) said it would cut its work force by 1,200 nationwide and close a plant. The stock was lately up 2.9% to $46.69.
Breadth was positive on above-average volume.
New York Stock Exchange: 1,694 advancers, 1,092 decliners, 533 million shares. 236 new 52-week highs, 35 new lows.
Nasdaq Stock Market: 2,091 advancers, 1,740 decliners, 1.107 billion shares. 121 new highs, 215 new lows.
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Most Active Stocks
NYSE Most Actives
- Lucent Technologies (LU) : 20.9 million shares.
AT&T (T) - Get Report: 13.2 million shares.
Nortel (NT) : 11.8 million shares.
Nasdaq Most Actives
- WorldCom (WCOM) : 30.6 million shares.
Cisco Systems (CSCO) - Get Report: 28.4 million shares.
Intel (INTC) - Get Report: 26.7 million shares.
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Drug stocks were having a reasonably strong day. In addition to J&J,
was lately up 1.6%, and
gained 0.7%. The
Amex Pharmaceutical Index
Aerospace and defense stocks were uniformly strong.
, a stalwart all year, was lately up 3.2%, while
rose 0.9% and
Regional banks were having a somewhat strong session.
rose 1.1% and
was lately up 3%. The
Philadelphia Stock Exchange/KBW Bank Index
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Treasury notes and bonds were trading mostly lower as the market absorbed the latest economic data without much reaction. The number of people applying for unemployment insurance fell and last month's sales of previously owned homes were strikingly higher. Such optimism was however neutralized by a slumping attitude among consumers. The fact that many traders are home and those at work are unwilling to revise their portfolios at the year's close is another reason for the minimal response. Yields were up from their previous closing levels.
The benchmark 10-year
Treasury note lately was down 5/32 to 104 20/32, raising its yield to 5.136%.
In economic news, the
Mortgage Applications Survey
), the release of which had been delayed by a day, detected an increase in refinancing and a decrease in new mortgage activity as mortgage rates remained low. The Refinancing Index rose to 794.1, closer to its previous peak recorded in May 1999. The Purchase Index slipped to 278.2, its lowest level since February.
Initial jobless claims
) fell much more than expected. First-time claims for unemployment insurance fell to 333,000 from 356,000 the previous week. However, 18 of the states have turned in estimated data, so the revised number may be closer to the Reuters estimate of 351,000. The four-week average fell to 340,750 from 347,750.
Existing home sales
) rose more than expected to 5.22 million in November from 5 million in October. Economists polled by Reuters had forecast a drop to 4.9 million for the month. Low mortgage rates have been helping the housing market.
Consumer Comfort Index
chart ) remained at 27%, 11 points lower than its 12-month high but not far below its 12-month average of 29%. Buyers lining up for last-minute gifts kept the number steady.
Consumer Confidence Index
) fell more than forecasted to 128.3, its lowest level since December 1998. The Reuters poll had reflected similar sentiments in pegging it at 128.7. Economists watch this index closely due to its influence on consumer spending, which accounts for two-thirds of the
gross domestic product
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Currency trading extended recent trends. The euro strengthened against the dollar as perception of economic strength continues to shift toward Europe, while the Japanese yen dropped to a 16-month low against the greenback, on further concerns of economic weakness in Japan. The euro lately traded at $0.9255, while the dollar/yen was lately at 114.61. European stocks were mildly stronger at the close. Paris'
gained 63.45 to 5920. London's
was lately up 5 to 6223, and Frankfurt's
was up 5 to 6333. Asian stocks ended mixed. Hong Kong's
ended the day up 48.19 at 14,796.55, while Tokyo's
slipped 34.53 to 13,946.96
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