Rally Rescues The Dow From Bear
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Thursday March 22, 4:42 pm Eastern Time
Forbes.com
By Mark Lewis
<<Today may have been the briefest bear market on record. The Dow Jones industrial average fell deep into bear territory today, and then staged a furious afternoon rally that left traders hoarse and investors gasping for breath.
The Dow ended the day down 97.52 points, to 9,389.48, just above the 9,379 level that would have marked the blue-chip index's first official bear market since 1990. Earlier, the Dow fell almost 400 points, but tech stocks led a late rally that staved off the bear--at least for today.
Despite the late rally, it still was a down day for the Dow. The worst performing group was the cyclical stocks, such as Alcoa (NYSE:AA - news) , Boeing (NYSE:BA - news) , Dupont (NYSE:DD - news) and International Paper (NYSE:IP - news) .
While the Dow was in free-fall, the tech-heavy Nasdaq Composite held steady, and it eventually rallied to end the day up 3.7%. The Nasdaq's strength evidently gave heart to blue-chip investors, says Brian Finnerty, head of trading for C.E. Unterberg Towbin. "I think the Nasdaq has bottomed," he says. "When everything's negative, that's when you've got your bottom."
Tech has led the market down over the past year, but today it was stocks such as Intel (NasdaqNM:INTC - news) , Hewlett-Packard (NYSE:HWP - news) and Microsoft (NasdaqNM:MSFT - news) that put a floor under the rout.
For tech, the worst may be over. Despite the tough second-quarter earnings comparisons that lie ahead for these stocks, they might not be hampered, if the selling ends before reporting season begins, says Harry Laubscher, market analyst at Tucker Anthony.
"If the earnings reports come out and we've gone through a selling climax, I don't think that they would have that much of adverse impact," says Laubscher.>> |
