<font color=blue>MARKET SNAPSHOT 1:46 P.M.
Nasdaq gets lots of treats
Nets, chips and networkers vault
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 1:46 PM ET Oct 31, 2000
NEW YORK (CBS.MW) - Technology stocks zoomed Tuesday with Halloween bringing lots of treats to the Nasdaq following a rough ride during the month of October.
The Dow Industrials extended gains for a fourth straight session, garnering momentum as the session progressed. A 7.9 percent slide in shares of Procter & Gamble in the wake of its ho-hum earnings report initially stymied attempts to gain ground but broad-based buying emerged around midday.
Leading the techs on the upside were chip, networking and Internet shares -- particularly the business-to-business segment. Chip stocks managed a nifty gain, taking the closely-monitored Philly Semiconductor Index ($SOX) up 6.1 percent even as Rambus (RMBS), one of its components, dropped nearly 12 percent.
The overall market was underpinned by a climb in retail, biotech and brokerage issues. Cyclical stocks took a breather after Monday's magnificent rally, with chemical and paper issues succumbing to some mild profit taking. Also lower: drug, utility, consumer and oil stocks. A 54-cent drop in the December crude contract to $32.27 hampered the latter group.
Separately, Bear Stearns' chief strategist Elizabeth Mackay shifted sector allocations by boosting financials to a modest overweight from a market weight, lowering energy to a market weight from a moderate overweight and reducing industrial services to a modest underweight from an overweight.
Mackay said financial stocks tend to do well when the Fed is done raising rates. Further, if the central bank removes its bias to tighten, this sector stands to benefit, she said.
Regarding energy, the strategist said the stock market seems to be discounting a top in oil. And if prices indeed move lower, energy shares will have trouble outperforming, she concluded.
The Dow Jones Industrials Average ($DJ) climbed 85 points, or 0.8 percent, to 10,921.
Procter & Gamble (PG) was the index's downside mover, losing $6.38 to $70.50 after reporting earnings that met Wall Street's expectations.
Among the Dow's movers on the upside were shares of General Motors, Home Depot, Intel and Boeing. And IBM (IBM) put on $4 to $97.31 after announcing a $3.5-billion buyback program.
The Nasdaq Composite ($COMPQ) tacked on 159 points, or 5.0 percent, to 3,352 while the Nasdaq 100 Index rallied 195 points, or 6.4 percent, to 3,278.
The Standard & Poor's 500 Index ($SPX) gained 1.7 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks rose 2.1 percent.
Volume checked in at 780 million on the NYSE and at 1.23 billion on the Nasdaq Stock Market. Market breadth was positive, with advancers pouncing on decliners by 17 to 10 on the NYSE and by 25 to 14 on the Nasdaq.
Listen to midday market report.
Sector movers
Networking shares stole the show in the tech arena Tuesday, with Cisco Systems (CSCO) climbing $3.19 to $51.25 after a rough session Monday during which it lost as much as 10.7 percent. The climb in the networking monolith buttressed the Amex Networking Index ($NWX) by 9.1 percent.
Better-than-expected earnings from Alcatel - Europe's second-largest telecom equipment maker - gave many of the recently hard hit fiber-optic stocks reason to cheer and also buoyed wireless telecom stocks.
France's Alcatel (ALA) said its record performance in the third quarter was underlined by strong gains in data and optical networking sales. Further, Alcatel expects 2001 revenue growth to be greater-than-expected, with early indications showing growth in the company's telecom business of at least 25 percent. Read the full story. Shares put on $5.31 to $62.44.
Last week, Canada's Nortel Networks sent shockwaves through the high-octane networking and fiber-optic sectors when it missed analysts' revenue estimates by $200 million last week. On Tuesday, Nortel (NT) rose $3.75 to $43.75, Ciena (CIEN) gained $8.31 to $99 and JDS Uniphase (JDSU) rose $5.44 to $76.75. Merrill Lynch's Broadband Holdrs (BDH), which includes Nortel, JDS and Ciena, tacked on a lofty 9.2 percent.
Chip stocks ascended even as Rambus was hit by a decline of $10.19 to $43.25. Rambus was hurt by an industry report that Intel intends to drop the company's dynamic random-access memory technology from its computing platforms, with the exception of high-end workstations, by mid-2001. But other chip stocks flew: Xilinx (XLNX) rose 11 percent after Merrill Lynch added the stock to its "Focus I" list, Advanced Micro Devices (AMD) put on 10 percent and PMC-Sierra (PMCS) rallied 12 percent.
Internet stocks rallied heartily on the last day of a month that has been extremely harsh to the group. In fact, the Goldman Sachs Internet Index ($GIN), up 8.3 percent on Tuesday, has fallen a bruising 23 percent in October. B2B and infrastructure plays led the advance with PurchasePro, up 29 percent, and Exodus Communications, up 18 percent, highlighting the scintillating move.
Treasury focus
In the government market, prices slid as equities gained momentum. The 10-year Treasury note slipped 3/32 to yield ($TNX) 5.745 percent while the 30-year bond gave up 15/32 to yield ($TYX) 5.78 percent.
Little reaction was seen to the morning's spate of economic news. Tuesday saw the release of October consumer confidence, which fell to 135.2 from September's 142.50 and came in less than the expected 140.2 level. It was the index's lowest reading since October 1999, with the equity market's poor performance in the September-October period impacting confidence.
Also out: September new home sales, which climbed by an unexpectedly large 9.2 percent to 946,000, much higher than the expected 888,000 and the second highest level of the year. It was the second-highest pace for home sales in the year.
Finally, the Chicago Purchasing Mangers Index decreased to 48.7 in October versus the previous 51.4. View Economic Preview, economic calendar and forecasts and historical economic data.
Cornering the currency market, dollar/yen edged up 0.2 percent to 109.20 while euro/dollar climbed 0.7 percent to 0.8454. |
