Today's Market: Volatility the Name of the Game Ahead of Long Holiday Weekend
Today, the markets were looking about as stable as that traditional Thanksgiving treat -- the
Jell-O mold.
Just not quite as yummy as Mom used to make before she went back to work.
Volatility had the major indices flailing all over the board today. The
Dow Jones Industrial Average managed to finish the day on the upside, while the
Nasdaq Composite Index couldn't fight its way back to the positive, finishing at a low for the year. The
S&P500 pulled off a green finish.
Typically, ahead of a long holiday weekend, volume is light, but that was compounded today by the not-so-typical-this-close-to-Thanksgiving election uncertainty. Today, election activity centered around the
Florida's Supreme Court
, which said that it doesn't have a timetable on handing down a ruling over whether to accept the manual hand court.
And so, the election saga continues. Don't worry, there were plenty of other distractions today.
Nortel Networks
(NT)
tried to warm things up with an optimistic, if conservative, outlook for 2001optical equipment sales. The company's CEO John Roth said at an analyst conference in Boston that its closely watched opticals unit would grow faster than the industry but not as quickly as previously projected. The news sat well with investors. The stock was lifted 8.3% to $38.19 on the news.
TheStreet.com
covered the announcement more in-depth in a separate
TheStreet Recommends
story.
Other good news in tech came from
Agilent
(A) - Get Agilent Technologies Inc. Report
, which was up 9% after it reported better-than-expected earnings for its fourth quarter.
TheStreet.com
wrote about the
earnings announcement in an earlier story.
But then there was that sad, sad tale about
Lucent
(LU) - Get Lufax Holding Ltd American Depositary Shares two of which representing one Report
, which announced that it had identified a "revenue recognition issue," which affects $125 million in revenue for its fourth quarter. This represents a 2-cent per share impact on the fourth quarter, which was previously announced to come in at 18 cents a share.
TheStreet.com/NYTimes.com
joint newsroom wrote more about the
issue in a separate story.
Lucent has guided estimates lower four straight times while missing earnings forecasts all over the place. This morning, Merrill Lynch cut its long-term rating on the company to accumulate from buy and slashed its 2001 earnings estimate to 20 cents a share from 65 cents a share. Lucent lost $3.38, or 16.1%, to $17.56.
Luckily, the Lucent news was mostly self-contained. Sector mates
Corning
(GLW) - Get Corning Incorporated Report
,
Ciena
(CIEN) - Get Ciena Corporation Report
and
JDS Uniphase
(JDSU)
all made nice upside moves.
Biotechs were with the opticals in the green.
Prudential Securities
raised ratings on four biotechnology firms to strong buy from accumulate, including
Gilead
(GILD) - Get Gilead Sciences Inc. Report
and
IDEC Pharmaceuticals
(IDPH)
. Gilead was up 5.8% to $68.38 and IDEC was 5.9% higher to $161.44.
Meanwhile, the Dow got the most help from
Boeing
(BA) - Get The Boeing Company Report
, which yesterday announced that it may split a $300 billion jet fighter contract from the Pentagon with
Lockheed Martin
(LMT) - Get Lockheed Martin Corporation Report
. Boeing bounced 4.7% on the news, while Lockheed moved up 2.2%.
The blue-chip index also got some help from
3M
and
ExxonMobil
(XOM) - Get Exxon Mobil Corporation Report
, each contributed about 10 points to the good.
IBM
(IBM) - Get International Business Machines Corporation Report
was the Dow's biggest drag, with nearly 30 negative points.
Holding Pattern?
While the Dow and the S&P managed a rally today, many were wondering if it can hold through the holiday.
Steven Goldman, market strategist at
Weeden
, said stocks are experiencing a holiday reprieve right now. But stocks on the
New York Stock Exchange and the S&P are performing better the over-the-counter stocks because their valuations were adjusted earlier, which braced them for slower growth. Goldman said tech stocks weren't concerned with slowing growth and so have been getting killed.
"The market has been damaged as far as tech, and it's going to take time and rallies are going to fade, but hopefully, they'll be able to build a base."
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Market Internals
Breadth was terrible on moderate volume.
New York Stock Exchange: 1,381 advancers, 1,464 decliners, 1.122 billion shares. 70 new 52-week highs, 109 new lows.
Nasdaq Stock Market: 1,431 advancers, 2,483 decliners, 1.724 billion shares. 29 new highs, 439 new lows.
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Most Active Stocks
NYSE Most Actives
- Lucent: 60.3 million shares.
Nortel: 32.1 million shares.
AT&T (T) - Get AT&T Inc. Report: 22.2 million shares.
Nasdaq Most Actives
- Oracle (ORCL) - Get Oracle Corporation Report: 57.6 million shares.
Cisco (CSCO) - Get Cisco Systems Inc. Report: 56.4 million shares.
WorldCom (WCOM) : 47.5 million shares.
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Sector Watch
Yahoo!
(YHOO)
sent
TheStreet.com Internet Sector
index plummeting 5.4% today. Yahoo! dropped 14.7% after concerns arose by
Morgan Stanley Dean Witter
analyst Mary Meeker said there is a 30% chance the company might miss revenue estimates for the next few quarters as the Internet advertising market slows.
The
Philadelphia Stock Exchange Semiconductor Index
continued to fall, losing 4.7%. Computer manufacturers weren't faring any better. The
Philadelphia Stock Exchange Computer Box Maker Index
slid 1.6%.
The
American Stock Exchange Airline Index
jumped 3% ahead of the holiday season, which helped lift the
Dow Jones Transportation Average
2.1%. This morning,
Goldman Sachs
adjusted its earnings estimates on
Southwest Airlines
(LUV) - Get Southwest Airlines Company Report
and
UAL
(UAL) - Get United Airlines Holdings Inc. Report
. Southwest was up 7.3%, while UAL hopped 1.2% higher.
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Bonds/Economy
Treasuries were mixed, with long-maturity issues rising while short-maturity issues fell. After spending much of the session under water, intermediate- and long-maturity rallied in the final hour of the last full-length trading session of the week.
Next week, the Treasury Department will sell new short-maturity notes. At the same time, investors normally buy intermediate- and long-maturity issues on the last business day of November. Those dynamics will make it profitable to own intermediate- and long-maturity issues, and not to own short-maturity ones. Treasury investors positioned themselves today to take advantage of those dynamics, market-watchers said, because participation in the market is likely to be limited tomorrow and Friday.
The benchmark 10-year
Treasury note rose 2/32 to 100 20/32, dropping its yield to 5.664%.
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International
European markets ended with a strong finish after dipping midday. In the U.K., stocks lost some of their earlier strength on news that the U.S. trade gap for September shot to a new record.
In London, the
FTSE 100
closed up 37.1 to 6382.1.
Over on the continent, the
CAC-40
in Paris rose 59.23 to 6081.02 and the
Xetra Dax
, in Frankfurt, was up 68.59 to 6678.07.
The beleaguered euro was giving up a bit of recent strength, trading at $0.8434.
Asian equity markets closed lower overnight.
Tokyo stocks sold off for the fourth straight session after Prime Minister Yoshiro Mori survived a no-confidence vote in parliament, strangling any hopes that a reform-minded government would take power and turn the economy. Hong Kong's blue-chips closed lower on weakness in telecoms and techs.
In Tokyo, the
Nikkei 225
slipped 123.19, or 0.85%, to 14, 408.46.
The greenback was lately trading higher to 109.97 yen.
Hong Kong's
Hang Seng
index slipped 158.36, or 1.03%, to 15,188.3.
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