Today's Market: Volatility the Name of the Game Ahead of Long Holiday Weekend

There's one more day of trading before we strap on the feed-bag. Expect it to be a quiet one.

Author:: Betsy Riley
Publish date:: Nov 21, 2000 5:46 PM EST

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

story.

Other good news in tech came from

Agilent

(A) - Get 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)

, 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 Report

Ciena

(CIEN) - Get 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 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 Report

, which yesterday announced that it may split a $300 billion jet fighter contract from the Pentagon with

Lockheed Martin

(LMT) - Get Report

. Boeing bounced 4.7% on the news, while Lockheed moved up 2.2%.

The blue-chip index also got some help from

(MMM) - Get Report

and

ExxonMobil

(XOM) - Get Report

, each contributed about 10 points to the good.

IBM

(IBM) - Get 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."

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.

Most Active Stocks

NYSE Most Actives

AT&T

(T) - Get Report

Nasdaq Most Actives

Oracle

(ORCL) - Get Report

Cisco

(CSCO) - Get Report

WorldCom

(WCOM)

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 Report

and

UAL

(UAL) - Get Report

. Southwest was up 7.3%, while UAL hopped 1.2% higher.

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%.

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.