Today's Market: Stocks Slightly Lower at Midday Following Gloomy Call From Dell

Big-cap tech has been bearing the brunt from this morning's warning from Dell. Retailers are bouncing back.
Author:
Publish date:

The

Dow Jones Industrial Average and the

Nasdaq Composite Index were playing follow the leader today, frolicking in tandem on the upside and downside.

This morning's

earnings warning from PC-making giant

Dell

(DELL) - Get Report

added an element of negative sentiment to the market, but stocks have really traded with very little conviction today.

Last week, the market wasn't easily swayed by earnings news -- good or bad -- and that seemed to be the prevailing mood again today. Instead of relying on earnings announcements for direction, investors are banking on and waiting for another move from the

Fed. The

Federal Open Market Committee is scheduled to meet at the end of the month.

Still, some were happy to reward and punish standout stocks.

The shining star today was biotech

Amgen

(AMGN) - Get Report

, which was the winner of a patent infringement case against

Transkaryotic Therapies

(TKTX)

. Amgen was popping 12.1% to $67.25, and, egads, Transkaryotic was plunging 40.4% to $20.25 in recent trading.

The battered retail sector was getting a nice bounce today thanks to a positive note from

Goldman Sachs

, which upgraded several retailers and added a few to its "U.S. recommended for purchase list." The list included mall-staple

Gap

(GPS) - Get Report

, king of reinvention

Target

(TGT) - Get Report

and Old Economy retailer and major appliance pusher

Sears

(S) - Get Report

. The aforementioned were all popping at midday.

The good news was also helping blue-chips home improvement stocks

Home Depot

(HD) - Get Report

and

Wal-Mart

(WMT) - Get Report

. Last week, Home Depot added pressure to the sector by

warning that it would miss estimates. The news pushed down Home Depot and Wal-Mart, so today they were recovering some of those losses.

Another to get a gold star was

Juno Online

(JWEB)

, which said its active subscriber base grew 8% to 4 million in December from 3.7 million in September. The Internet service provider was up 21.2% to $4.

Also in the Internet realm, newly merged

AOL Time Warner

(AOL)

was lately the most active on the New York Stock Exchange after it got a nice upgrade from

J.P. Morgan H&Q

to buy from long-term buy.

Big-caps were being disciplined today thanks to Dell. Those suffering include

Oracle

(ORCL) - Get Report

,

Sun Microsystems

(SUNW) - Get Report

and blue-chip

Microsoft

(MSFT) - Get Report

.

Other Dow components getting hurt by Dell's news was

Hewlett-Packard

(HWP)

and

IBM

(IBM) - Get Report

. H-P was lately down 5.3% to $33.88, while IBM was off 2.4% to $105.50.

Market Internals

Breadth was positive on the Big Board and just about even on the Nasdaq. Volume was active.

New York Stock Exchange: 1,400 advancers, 1,275 decliners, 606 million shares. 49 new 52-week highs, 3 new lows.

Nasdaq Stock Market: 1,783 advancers, 1,810 decliners, 1.116 billion shares. 53 new highs, 6 new lows.

Back to top

Most Active Stocks

NYSE Most Actives

  • AOL Time Warner: 18.7 million shares.
  • Lucent (LU) : 14.8 million shares.
  • Nortel Networks (NT) : 13.5 million shares.

Nasdaq Most Actives

  • Dell: 45.2 million shares.
  • Amgen: 36.6 million shares.
  • Cisco (CSCO) - Get Report: 31.2 million shares.

Back to top

Sector Watch

Amgen's

(AMGN) - Get Report

news was giving the

Nasdaq Biotechnology Index

a boost. In recent trading, the sector was jumping 5.7% to 1024.

The

Dow Jones Transportation Average

was driven up 0.8% to 2978 with help from trucking company

CNF

(CNF) - Get Report

and speedy-delivery company

FedEx

(FDX) - Get Report

.

Back to top

Bonds/Economy

Treasuries are trading lower, though the market's weakness is much more so among longer maturing securities. Traders have been shifting investments toward shorter-term notes in the hope of a half-percentage point cut in interest rates. Analysts are also awaiting Chairman Alan Greenspan's address to the

Senate Finance Committee

later this week in which he is very likely to hint of the

Federal Reserve's current strategy and elaborate on critical economic issues. Some more data released this morning confirms the slowdown in the economy.

The benchmark 10-year

Treasury note lately was down to 14/32 to 103.28/32, raising its yield to 5.229%.

In economic news, the

index of leading economic indicators

(

definition |

chart |

source

) fell 0.6% in December, compared to a 0.4% decrease in November. Analysts attributed the continued drop to a rise in company layoffs, declining consumer confidence and reduced working hours in the manufacturing sector.

Back to top

International

European markets bounced back after falling earlier on Dell's warning.

London's

FTSE

jumped 23 to 6232. Across the channel, Paris'

CAC-40

was up 37 to 5883. Frankfurt's still-rallying

Xetra Dax

crawled 9 higher to 6661.

The dollar was trading at $0.9371 euro. The euro has been slowly gaining in the past few months as the U.S. dollar weakens in the face of a slowing domestic economy. Fund managers are now forecasting that Europe's economies will grow faster than the U.S. this year, according to a recent

Merrill Lynch

report.

Asian markets rose overnight.

Tokyo's key

Nikkei 225

index rose for a seventh straight day Monday. It has been rebounding after hitting a 27-month low on Jan. 11. The index closed up 43.30, or 0.31%, to 14,032.42.

Hong Kong's key

Hang Seng

index closed over 16,000 for the first time since early October. The benchmark index closed up 1.04%, or 165.72 points, to 16,099.27.

The greenback was lately trading at 116.33 yen.

For more on world stock markets, check out

TheStreet.com's

global indices information.

Back to top