Today's Market: Tech Back After Yesterday's Selloff; Comp Back Over 3400
The market found pillars of strength in technology stocks this afternoon, as the
Nasdaq Composite Index boosted 72 to 3405 in recent action. Support from the
Dow Jones Industrial Average, meantime, was less pronounced. The blue-chip measure advanced a modest 10 to 10,910 in afternoon trading.
Today has been a turn-around day for many stocks that got a good battering yesterday.
Today's most notable turnaround comes in the semiconductor sector, which fell off sharply yesterday on the back of a revenue warning from specialty chipmaker
Altera
(ALTR) - Get Altair Engineering Inc. Report
. Good news from
Intel
(INTC) - Get Intel Corporation Report
, which forecasted a rise in sales in 2001, has cooled jittery investors' heels.
The chip giant added that the fourth quarter remains on track, after a less-than-perfect third quarter. Memorably, Intel issued a revenue warning for its third quarter that hammered its stock. Shares of Intel lately boosted 4.9% to $47.
A
report from the
Semiconductor Industry Association
has also pumped up chip manufacturers at midday. According to the trade group's research, global semiconductor sales are expected to rise 37% this year to $205 billion -- the highest ever -- and could reach $319 billion by 2003. Those figures have sent the
TheStreet Recommends
Philadelphia Stock Exchange Semiconductor Index
-- which closed down 3.8% yesterday -- up 2.8% today.
Today's tech rally has extended to the Net sector, where
TheStreet.com Internet Sector
is up 4.6%, and to PC manufacturers, where the
Philadelphia Stock Exchange Computer Box Maker Index
is ahead by 2%.
Lower-cased "e" companies,
eBay
and
eToys
(ETYS)
, in addition to
Amazon.com
(AMZN) - Get Amazon.com Inc. Report
, have emerged as today's leaders of the Internet pack. At the same time, boxmakers
Compaq
(CPQ)
and
Dell
(DELL) - Get Dell Technologies Inc. Class C Report
have both gained more than 4%.
Indeed, the Nasdaq may have reached a critical point today. "We're keying in on the 3400 level," said Todd Clark, head of listed trading at
W.R. Hambrecht
. "Reaching that number improves the technical underpinnings of the market."
On the Dow front, top mention goes to Intel,
IBM
(IBM) - Get International Business Machines Corporation Report
and
J.P. Morgan
(JPM) - Get JP Morgan Chase & Co. Report
, which have each contributed more than 13 points to the measure.
Cyclical stocks have brought weakness to the blue-chip index this afternoon.
ExxonMobil
(XOM) - Get Exxon Mobil Corporation Report
, down 3.3% to $89.06,
Alcoa
(AA) - Get Alcoa Corporation Report
, off 4.5% to $27.75, and
General Motors
(GM) - Get General Motors Company Report
, behind 2.3% to $59.94, have all been a drag on the Dow today.
What should investors make of today's activity? In recent days, a market trend has been hard to find. But some say that better days are yet to come. "We've seen the bottom of the selloff," said Jim Benning, a trader at
BT Brokerage
. "The market is going to work its way higher into the New Year."
In economic news, Wall Street got a heads-up on productivity. Released at 8:30 a.m. EST, the government's
Productivity and Unit Labor Costs
report showed that the efficiency of U.S. workers rose 3.8% during the third quarter, more than the 3.1% expected, but less than in the second quarter. Unit labor costs, however, also grew faster-than-expected, showing a 2.5% gain. That's well above market expectations of a 1.5% increase and the previous quarter's 0.2% decline.
High productivity can allow stronger growth to coincide with sustainable levels of inflation -- a good thing. But high unit labor costs, which measure worker compensation as adjusted for changes in productivity, can accelerate inflation -- a bad thing.
Headlining tomorrow's economic events is the
October employment report, which contains information about both job and wage growth and is considered the single best measure of the health of the economy.
Sector Watch
Energy stocks have lost power in recent action, as oil prices have eased today. The
American Stock Exchange Natural Gas Index
slipped 2.2%, the
American Stock Exchange Oil & Gas Index
shed 2.5%, and the
Chicago Board Options Exchange Oil Index
lowered 2.6%
Defensive stocks among the drug and paper industries have fallen this afternoon. Drug giant
Merck
(MRK) - Get Merck & Company Inc. Report
missed 1.3% to $88.56, and
Pfizer
(PFE) - Get Pfizer Inc. Report
declined 1.4% to $42.88. Paper giant and Dow component
International Paper
(IP) - Get International Paper Company Report
shaved off 3.8% to $34.69.
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Bonds/Economy
Bond prices were rising moderately this afternoon. The benchmark 10-year
Treasury note was up 2/16 to 100 3/32, yielding 5.736%.
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International
The major
European indices closed moderately lower.
The
FTSE 100
in London finished down 65.60 to 6392
The
CAC 40
in Paris dropped 8.74 to 6400.31, while the
Xetra Dax
in Frankfurt, still trading, was gaining 37.4 to 7096.47.
After economic data on Friday showed a slowing U.S. economy, the
battered euro continued to rise. It was lately at 0.8628.
Most Asian
equity markets ended Thursday mixed, as Taipei and Seoul booked gains and Tokyo finished in negative territory ahead of a three-day weekend.
Japanese investors remained on the sidelines, not wanting to stir things up too much before markets close Friday for a holiday. The
Nikkei 225
closed down 34.6 points, or 0.2%, at 14,837.8,
In Tokyo trading, the dollar traded down to 108.23 yen from the previous close of 109.16 yen. The greenback was lately at 108.34.
Elsewhere, Hong Kong's
Hang Seng
index fell 57.5, or 0.4%, to close at 15,291.5,
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