Out with the old, in with the new.
Tech investors looking for a relief rally got a break this morning. But even after yesterday's
market meltdown, Wall Street experts are not convinced that stocks have hit bottom.
On the heels of yesterday's 436-point loss on the
Dow Jones Industrial Average, the index -- which briefly clawed into positive territory this morning -- was lately pitted firmly below the flatline. As investors rotated out of defensive stocks and into tech issues, shares of
Johnson & Johnson
were the biggest drags on the
blue-chip measure this afternoon.
But while every Dow stock closed down yesterday,
J.P. Morgan Chase
were moving higher in recent trading.
For Warren Epstein, head trader at
Richard A. Rosenblatt
, today's losses on the Dow do not come as much of a surprise. "The market is very skittish," he said. "Blue-chip stocks remain vulnerable to a selloff."
Nasdaq Composite Index, which closed below 2000 yesterday for the first time since December 1998, was lately gaining. Groups on the upswing included the
Philadelphia Stock Exchange Semiconductor Index
-- up 2.6%, the
Philadelphia Stock Exchange Computer Box Maker Index
-- ahead 2.7%, and
TheStreet.com Internet Sector
index --higher by 1.3%.
Beware the Bounce of March!
In the face of today's tech gains, market gurus are advising that investors beware a sucker's rally (an early Ides of March, perhaps?), because there aren't any catalysts for a sustainable upturn. "We are way oversold here, but the problem with yesterday's selloff is that there was no real volume -- not enough to convince anyone we've seen a real bottom in here," said Ray Hawkins, vice president of block trading at
J.P. Morgan Chase
As if the headlines from
could get any worse. Just days after it set plans to slash up to 17% of its workforce, the networking giant
said it remains doubtful about its future.
"We are not seeing a turnaround," CEO John Chambers said this morning at the
Global Investor conference in New York. Six weeks into the networking giant's fiscal third quarter, Chambers said, "We see the same slow growth we saw in January." Despite the comments, Cisco was up 6.6% to $20 -- though its bad news was one of the catalysts for yesterday's plunge.
said it's cutting 7,000 jobs in its cell-phone unit and taking a charge on its first and second-quarter results. Motorola shares were fractionally lower at $14.91. Just yesterday, rival
-- off 0.5% to $6.25 today, said it would report a loss instead of a profit for its upcoming fiscal first quarter.
The fact that some tech companies are bouncing off of bad news today gives Wall Street pros some incentive to be optimistic. "Arguably, we're closer to a bottom than we are to a top," said Art Hogan, chief market analyst at
. "We're more than 60% off the Nasdaq's all-time-high."
In economic news, the
retail sales report for February, released this morning, confirmed that consumers curbed their spending significantly last month. Sales were much lower than economists had been expecting. The data help make the case for aggressive rate cuts to get the economy back on its feet. Indeed the
fed fund futures contract, a good proxy for monetary policy, has fully priced in a 50 basis-point ease in the
fed funds rate at the
Federal Reserve's upcoming meeting on March 20.
On the mergers and acquisitions front, mobile-phone maker
-- 2.5% to $21.98, announced it was selling two plants to contract manufacturer
-- higher by 3.1% to $16.50. And diversified conglomerate
-- lower by 11.1% to $45.10, struck a deal to buy
-- up 32.8% to $30.22, for about $9.2 billion.
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As losses mount in the U.S., Japanese stocks are plunging to their weakest levels since 1985. The yen fell to a 20-month low against the dollar yesterday amid concerns the Japanese government will be unable to restore health to the country's sick economy. Adding to the weakness in the market, Japan's prime minister,
, who is widely blamed for the country's economic weakness, refused to resign as he was scheduled to do last weekend.
Asian markets were devastated again overnight, with the
sliding another 2.9% to a new 16-year low at 11,819.7, and the
falling 2.06% to a new 16-month low.
The dollar was much stronger on the yen, lately trading at 119.86 yen.
European investors were supporting a bounce in tech and telecom stocks near their midday, but a second day of losses in mobile-phone titan
and selling in old economy stocks was kept the major European indices down. Londons's
closed down 105.8 to 5721. Across the channel, the Paris-based
ended 55.5 lower to 5187 and the German
-- still trading -- was losing 100 to 5947.
The euro was lately trading at $0.9202.
For more on the world stock markets, check out
global indices information.
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