True and the way the old Gorillas are getting hit is very disconcerting. Look at the losses in ORCL and SUNW today.
Both at new 52 week lows on little more than half-lies innuendo:
finance.yahoo.com
Softer data dent U.S. stock indexes
By Julie Rannazzisi
biz.yahoo.com
NEW YORK (CBS.MW) -- A softer-than-expected reading in a key measure of the manufacturing sector crimped stocks Wednesday and added to the distress of a tech sector roiled by a steep decline in shares of Sun Microsystems.
But the Dow overcame a triple-digit deficit and was just marginally lower thanks to stepped up interest in many of its consumer and telecom components. The Nasdaq, however, continued to hover at its lowest level since late October as worries about the timing of a rebound in capital spending continued to plague the tech group.
The Institute of Supply Management Index fell to 53.9 percent in April from March's 55.6 percent. A survey of economists conducted by CBS.MarketWatch.com had projected the April ISM to come in at 55.3 percent. A reading above the 50-percent mark suggests that the factory sector is expanding.
Within the ISM, the new orders index slid to 59 percent from 65.3 percent. The employment sub-index also wavered while the prices paid index took a leap.
Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co., points out that the level of the ISM index corresponds to healthy GDP growth rate of 4.1 percent. While that should appease bulls, he said bears are homing in on the outright decline in the index as well as the drop in its employment component.
In the meantime, construction spending numbers also showed more weakness than had been expected, declining 0.9 percent in March vs. the 0.1 percent decrease that had been forecast.
The Dow Jones Industrial Average (: ^DJI - news) forfeited 29 points, or 0.3 percent, to 9,916 after falling as much as 116 points, dragged lower by shares of Intel, Hewlett-Packard, Honeywell, IBM and United Technologies. Among the upside movers were AT&T, Coca-Cola, SBC Communications, Walt Disney and Philip Morris.
The Nasdaq Composite (: ^IXIC - news) erased 37 points, or 2.2 percent, to 1,650 and the Nasdaq 100 Index (: ^NDX - news) subtracted 34 points, or 2.7 percent, to 1,243.
In the tech sector, Sun's plunge following the resignation of its chief operating officer upstaged positive action in Compaq Computer shares after a Delaware judge dismissed a suit aimed at impeding the company's hookup with Hewlett-Packard.
Hardware, software and Internet stocks witnessed the most aggressive selling while broad market bears stampeded on biotech, paper, airline and financial issues. Safe-haven drug and gold issues managed a push into the plus column, as did the oil service sector.
The Standard & Poor's 500 Index (: ^SPX - news) sagged 0.4 percent while the Russell 2000 Index (: ^RUT - news) of small-capitalization stocks dropped 0.8 percent.
Volume totaled 763 million on the NYSE and at 1.23 billion on the Nasdaq Stock Market. Market breadth was markedly negative, with losers trouncing winners by 17 to 13 on the NYSE and by 21 to 11 on the Nasdaq.
Sun takes a plunge, Compaq rises
Sun (NasdaqNM: SUNW - news) skidded over 14 percent after announcing that COO and President Ed Zander would step down and that CEO Scott McNealy would pick up his responsibilities. The news came less than a week after the company names a new CFO. Sun also reaffirmed that the company's financial targets for the quarter are on track.
The Goldman Sachs Hardware Index (: ^GHA - news) eased back 3.2 percent, with Compaq (NYSE: CPQ - news) up 2 percent and H-P (NYSE: HWP - news) off 3.7 percent. A judge put an end to uncertainties late Tuesday by dismissing a suit from Walter Hewlett to stop H-P from snaring Compaq. Hewlett said he would not appeal the decision and would back the merger. SG Cowen surmised that the deal would close next week and believes that H-P is undervalued relative to potential fiscal 2003 and 2004 earnings power. And Merrill recommended H-P as a value play in a note to clients.
Dell Computer (NasdaqNM: DELL - news) lost 2.5 percent, though Merrill Lynch had some positive comments on the company. At the brokerage's "Hardware Heaven" conference Tuesday, Dell highlighted the competitive advantages of its direct business model and its ability to gain market share in a difficult economic environment. Merrill reiterated its "strong buy" rating on the stock.
A brutal warning from Agile Software (NasdaqNM: AGIL - news) infused the software sector with negative sentiment. Agile got decimated by 25 percent after predicting a wider-than-expected loss in its fiscal fourth quarter and lowering revenue targets. Agile also unveiled plans to trim its workforce.
Oracle shares (NasdaqNM: ORCL - news) also took in on the chin, sliding 9 percent after Lehman Brothers slashed fiscal fourth-quarter and full-year earnings and revenue targets due to pricing pressures and a tough industry environment. The brokerage also feels that Oracle's chances of meeting Wall Street's fourth-quarter expectations are low. Rival Microsoft fell 1.4 percent in recent trading. See the Ratings Game.
Cisco Systems (NasdaqNM: CSCO - news) took a 5-percent hit after announcing plans to snag two privately-held tech firms, Hammerhead Networks and Navarro Networks, for a combined total of $258 million in stock.
Chip stocks followed the rest of the tech sector lower, though losses were more modest compared with other groups. Among the equipment makers, stalwart Applied Materials declined 2.2 percent. Merrill Lynch said the company (NasdaqNM: AMAT - news) sounded upbeat at the brokerage's hardware conference Tuesday. Merrill also said it feels "quite comfortable" with its fiscal second quarter revenue, earnings and order estimates on AMAT. In the broader chip arena, Advanced Micro Devices (NYSE: AMD - news) edged up 0.7 percent following an upgrade.
Trading in the telecom group was mixed, with WorldCom (NasdaqNM: WCOM - news) resuming its downward trajectory following a one-day respite after the company's CEO resigned. Shares dropped 10 percent while AT&T jumped 3.6 percent, Qwest Communications rose 2 percent and SBC Communications added 2.4 percent.
Gold stocks (: ^GOX - news) enjoyed their safe-have status and headed sharply higher, also benefiting from a climb in gold futures. Even Barrick Gold (NYSE: ABX - news) gained 4.1 percent following a slump out of the gateafter posting first-quarter earnings that fell short of the Wall Street consensus estimate due to a decline in production, which more than offset a rise in gold prices. Barrick also lowered its profit forecast for the year.
In the biotech space, Gilead Sciences (NasdaqNM: GILD - news) rallied 7.6 percent after posting late Tuesday a narrower-than-expected loss in the first quarter.
Read Movers & Shakers for the latest individual stock action.
Bonds capitalize on stock woes
As has been typical of late, government bonds benefited from the equity market's struggles and were bid up significantly.
Bond investors also focused on the Treasury's quarterly refunding announcement. The agency said smaller tax revenues forced it to suspend its debt buyback operations in the current quarter.
Next week, Treasury will sell a larger-than-expected $22 billion 5-year offering and $11 billion in existing 10-year securities.
The 10-year Treasury note ascended 12/32 to yield (: ^TNX - news) 5.04 percent while the 30-year government bond sprinted 24/32 to yield (: ^TYX - news) 5.545 percent.
The dollar weakened significantly against its major counterparts, falling 1.1 percent to 127.16 yen, a level not seen since mid-December. The euro added 0.9 percent to 90.83 cents, also a four-month high.
Treasury Secretary Paul O'Neill did not appear worried about the value of the U.S. dollar at a Senate hearing Wednesday. He asserted that worries the nation is running an unsustainable current account deficit are overblown.
But Ashraf Laidi, chief currency analyst at the MG Financial Group, said O'Neill's rhetoric was hurting the dollar.
"The fact that he sheds doubts on the effectiveness of rhetoric relative to the importance of economic performance implies that the Secretary himself might be admitting his strong dollar policy mantra is not effective," Laidi commented.
RtS |
