<font color=blue>MARKET SNAPSHOT--Different paths for major averages
Techs rebound; Dow fumbles
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 1:29 PM ET Sep 7, 2000 NewsWatch
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NEW YORK (CBS.MW) - Stocks put on a mixed performance Thursday, with a rebound in tech issues helping the Nasdaq score healthy gains while a sell-off in shares of DuPont chipped away at the Dow Industrials.
Still, the Dow's losses were limited due to advances in its technology components and the blue-chip barometer came well off session lows.
"There's still a fairly thick cloud hanging above the market. Nobody is willing to make any [long-term] bets," said Brian Belski, fundamental market strategist at U.S. Bancorp Piper Jaffray.
In addition, with the confession period set to begin on Wall Street, investors are likely to play it safe. "We're likely to trade sideways to slightly lower from here," Belski said.
Semiconductors gained ground after faltering for three straight trading sessions. Market watchers say it's imperative the semis reclaim lost territory for the Nasdaq to make any lasting progress. Also gaining ground in the tech arena were networking and computer hardware shares.
A rally in the biotech group, which put an end to two days of selling, was also behind the Nasdaq's nice performance on Thursday. Oil and oil service shares took a breather as crude oil futures dipped following Wednesday's rally. October crude lost 10 cents to $34.84 after reaching a high of $35.17 in intra-day trading. The American Petroleum Institute reported that crude-oil stocks rose by a larger-than-expected 3.13 million barrels in the latest week.
The Dow Jones Industrials Average ($DJ: news, msgs) slipped 12 points, or 0.1 percent, to 11,297.
DuPont was the biggest drag on the index following its profit warning, dropping 12 percent. Also moving lower were shares of Honeywell, International Paper and J.P. Morgan. The Dow's winners Thursday included Boeing, Wal-Mart, Intel, General Motors and Hewlett-Packard, Intel and IBM.
DuPont (DD: news, msgs) lowered its 2000 earnings-per-share estimate to $2.85 to $2.95, which falls short of the current First Call estimate of $3.01. The company blamed higher-than-expected energy and raw materials costs as well as the euro's continued decline. See full story. Shares fell $5.50 to $41.50.
"The markets are likely entering a period of rest in the form of a trading range after running up for the last five weeks. Since the rally period was slow, the consolidation period will likely be similarly quiet," said Robert Dickey, chief technical strategist at Dain Rauscher Wessels.
"This may be the best we can expect as the market sorts through the earnings news of the next two months," he concluded.
The Nasdaq Composite ($COMPQ: news, msgs) rose 72 points, or 1.8 percent, to 4,085 and the Nasdaq 100 Index ($NDX: news, msgs) rallied 100 points, or 2.6 percent, to 3,938.
Many big-cap tech stocks, many of which came under selling pressure over the past couple of trading sessions, rebounded nicely on Thursday. Sun Microsystems, for example, climbed 5.4 percent, Cisco Systems was 2.3 percent higher, Intel rose 3.4 percent, and JDS Uniphase put on 2.0 percent.
The Standard & Poor's 500 Index ($SPX: news, msgs) gained 0.7 percent while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks advanced 0.5 percent.
Volume was heavy at 596 million on the NYSE and at 974 million on the Nasdaq Stock Market. Market breadth remained mixed, with losers beating winners by 14 to 13 on the NYSE and advancers outpacing decliners by 20 to 17 on the Nasdaq.
Listen to midday market report.
Sector movers
Chip stocks were the star performers on Thursday, as buyers, absent for three days, took the Philadelphia Semiconductor Index ($SOX: news, msgs) up 3.4 percent. Intel and Micron Technology (MU: news, msgs) moved higher after struggling this week on the heels of an analyst downgrade.
Computer hardware stocks also checked in with respectable gains as Dell Computer (DELL: news, msgs), the sore spot over the past three trading sessions, rose 88 cents to $40.38. SG Cowen said that while concerns regarding PC concerns have sparked fears over Dell business, the PC maker's business is on track to meet estimates for the third quarter.
Internets shares put on a mixed performance, with the Goldman Sachs Internet Index ($GIN: news, msgs) up 0.6 percent and Merrill Lynch's Internet Holdrs (HHH: news, msgs) off 0.2 percent.
Yahoo (YHOO: news, msgs) shares slipped into negative territory in choppy trading, shedding $2.31 to $109.69. The company's chief executive Tim Koogle made some cautious comments on ad revenue at the Robertson Stephens Internet Conference on Wednesday. In fact, asked whether Yahoo will see weakness in advertising -- both traditional and dot-com -- Koogle said that while it's hard to gauge, he believes the difficult period will continue for two more quarters. See full story. CMGI (CMGI: news, msgs) was one the downside movers in the group, falling 3.6 percent to $45.06. The company announced a reorganization that should help move the Internet incubator to profitability and increase focus on its Net operating companies. See full story.
Treasury focus
Government issues traded on a mixed note, with gains clustered in the 30-year bond. Observers say the heavy issuance calendar in the corporate market is likely to put a cap on gains going forward.
The 10-year Treasury note shed 2/32 to yield ($TNX: news, msgs) 5.735 percent and the 30-year bond gained 5/32 to yield ($TYX: news, msgs) 5.70 percent. See Bond Report.
In economic news, Thursday saw the release of weekly initial claims, which dipped 3,000 to 316,000. The week's data docket has left the bond market without any fresh evidence that the U.S. economy is slowing and Treasurys have been mired within a tight range. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, dollar/yen (C_JPY: news, msgs) dropped 1.0 percent to 104.83 while euro/dollar (C_EUR: news, msgs) recovered following Wednesday's steep decline and a slide to a fresh low of 0.8637 early Thursday. The pair was recently trading at 0.8752, up 0.5 percent.
Comments from European officials suggest that the European Central Bank won't intervene in foreign exchange markets to prevent additional declines in the fledgling currency. This gave investors the green light to sell more euros.
"Financial capital flows to wherever risk-adjusted expected returns are greatest. Perhaps as a means of avoiding the Continent's restrictive regulatory and tax policies, Europeans continue to pour financial capital into the U.S.," said John Lonski, chief economist at Moody's Investors Service.
"Global investors are very much attracted to the flexibility and dynamism of the U.S. economy," Lonski added.
The euro has fallen 14 percent this year and is down almost 26 percent since its inception in January 1999. The euro first fell below parity against the dollar in December 1999.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
