The Dow Jones Industrial Average is up smartly and the Nasdaq Composite Index is down about 2%, but so accustomed have Wall Streeters become to violent swings in the market that they are pronouncing the day quiet.
"It's a lethargic day in front of a big earnings week," said Rob Cohen, co-head of listed trading at
Credit Suisse First Boston
. "There's not a strong consensus on which way to go."
At times one imagines plucking up some trader from the depths of an earlier epoch -- say a few years ago -- and seeing what he would have to say about this so-called quiet day. What would a younger Rob Cohen, a Rob Cohen circa 1997, think of what this later model is saying?
Volatility is one of the few things people will agree on in today's market. Though some will say tech stocks will soon climb anew, others think the baton is being passed to the Old Economy stocks for a spell and still others think the whole shebang is heading lower, more chop is a constant in everybody's outlook.
"For the next few months I think we'll see volatility," said Robert Dickey, managing director of technical analysis at
Dain Rauscher Wessels
in Minneapolis. "It's a trader's delight and a real frustration for investors."
Dickey believes that tech stocks, in particular, will bump and grind like unchaperoned teenagers -- he sees the Nasdaq caught in a range (if you can call something so big a range) of 3700 to 4700 for the next few months. It's a good market for Dickey, one where, because it is so psychological, traders are more apt to look at technical analysis than fundamentals.
It's also the kind of market that investors who are not interested in playing in the currents shun, and one of the reasons some focus is shifting elsewhere.
"The Old Economy, value, safe stocks are starting to attract more attention," Dickey said. "I would look at those as being relatively safe from a correction. They are not dot-coms, they're not going to move that way, but they're showing excellent action off their lows. That's where I'd be heading if I was an investor here."
Jeffrey Applegate, the
chief investment strategist, does not share those views. In his monthly conference call today, he said that technology stocks probably got a bit ahead of themselves a couple of weeks ago, but that last week's downturn brought them down to levels where they are actually a bit undervalued. He continues to be overweight the sector, "mindful that you will get these swoons in relative performance."
Cohen, too, had good things to say about technology as
earnings season kicks off, "as most of the companies that are expected to report this week should have good earnings." And though there are some investors who, tired of the ups and downs of the sector, may bail as tech stocks recover, he believes that others, seeing upside momentum reassert itself, will be more than happy to buy.
The Dow lately was up 108, or 1%, to 11,220 while the
was up 3, or 0.2%, to 1519.
The Nasdaq was off 79, or 1.8%, to 4368. Other tech proxies were underwater as well.
TheStreet.com Internet Sector
index was down 43, or 4.1%, to 1010 and the
Morgan Stanley High-Tech 35
was down 1.8%.
Cyclicals were doing well after a strong earnings report from
Morgan Stanley Cyclical Index
was up 2.4%.
American Stock Exchange Pharmaceutical Index
was up 2.2%. The
Philadelphia Stock Exchange/KBW Bank Index
was up 2.5%.
The 10-year Treasury lately was up 6/32 to 104 29/32, dropping the yield to 5.84%.
Breadth was mixed on light volume.
New York Stock Exchange:
1,511 advancers, 1,269 decliners, 463 million shares. 43 new 52-week highs, 9 new lows.
Nasdaq Stock Market:
1,617 advancers, 2,380 decliners, 712 million shares. 41 new highs, 33 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.