(Updated from 9:27 a.m. EDT)
Investors are snatching up some tech bargains this morning -- -- as long as there aren't any more scary semiconductor downgrades.
Dow Jones Industrial Average was down 8 to 11,303. The
Nasdaq Composite Index was up 34 to 4048. And the
S&P 500 moved up 5 to 1497.
Analyst downgrades on
in the last two days fanned concerns over continued strength in technology earnings and gave investors an excuse to unload tech stocks.
But two days of selling wiped out nearly half of the
Nasdaq Composite Index's August rally, and some investors think tech is looking pretty oversold -- or cheap -- at these levels. Between Tuesday and Wednesday, the Nasdaq lost 220 points of its 550 point upward spike in August.
"For the most part, we're bullish. We think that things have beaten up too much because of short-term profit-taking," said Phil Ruffat, vice president of
"There is still plenty of money going around. The acquisition of
Associates First Capital
should give a bid to companies like Bear Stearns," Ruffat said.
Meanwhile, Ruffat was also bullish on stocks outside of tech, saying he didn't agree with recent analyst attacks on the semiconductor and drug stocks, and that he expects a turnaround. On Tuesday,
Banc of America Securities'
analyst Leonard Yaffe downgraded the pharmaceutical sector to market weight from over weight, saying he believes growth of the U.S. drug industry could slow significantly and that a shift to generic drugs would hurt the sectors' biggest companies.
"I think we had a fall for two days. The guy who battered drug companies -- I can see his point," Ruffat said. "But I think
also have presence in generic manufacturers, and there are always brand-new drugs."
Enthusiasm over oil prices, meanwhile, which broke
10-year high overnight, should keep pumping cash into oil services stocks. These stocks have seen a wild run-up since late July as surging prices continue to surprise the market.
Crude traders are betting that any production increase
might agree to at a meeting this weekend won't be enough to restore paltry inventories. Despite the continuing rise in oil prices, an analyst downgraded these stocks in mid-August, saying they had become overvalued.
Meanwhile, high oil prices are biting into the profits of some companies. The biggest chemical company in the U.S.,
warned it would miss 2000 earnings per share estimates this morning due to increases in energy and raw materials costs. The company cut its estimate to $2.85 to $2.95 before items, from analyst forecasts of $3.01. DuPont shares fell in pre-open trading.
Elsewhere in the news, United Airlines' parent
looked to sputter at the open after
analysts Candice Browning and Mike Linenberg slashed its third-quarter and full-year earnings per share estimates on the company due to operational problems at the airline. Merrill Lynch cut UAL's third quarter earnings per share forecast to $0.30 from $2.00.
wireless unit -- named, you guessed it,
-- is considering getting together with
The Wall Street Journal
reported this morning that AT&T Wireless was planning to discuss possible combinations with Nextel, among other options, during a board meeting later this month.
And the market will continue to watch for any sign from U.S. brokerage
concerning a deal between the two. Dow component J.P. Morgan surged 5% yesterday on speculation that the institution was in talks to be acquired by Deutsche Bank.
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Treasuries were flat this morning after two days of selling on rises in oil prices and expectations of a flood of new corporate bonds in the coming weeks. The 10-year Treasury note was lately up 3/32 at 100 7/32, yielding 5.722%.
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European markets were late mixed but mostly lower by midsession.
was lately down 18.50 to 6676.20. Across the channel, the
in Paris was off 3.92 to 6800.71, and the
in Frankfurt was off 11.22 to 7321.80.
The euro was lately trading lower at $0.8733.
Asian markets took a little trip lower overnight.
Buying in software and transportation shares countered selling on weak economic data in Japan, but the
index shed 99.41 to close at 16,300.46.
The greenback edged slightly lower against the yen in Tokyo trading to 106.32. The dollar was lately trading at 105.20 yen.
index dipped 173.28, or 1%, to close at 17,431.95, largely on investor disappointment with the share placement of
. The firm said it would place up to 60 million shares at HK$5.08 each with an option to see up to 15.8 million additional shares at the same price. With shares closing down HK$0.65, or 11.2%, at 5.15 ($0.66) today, investors wondered why the firm decided to place shares at such a discount.
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