V: The Trend is Becoming VERY CLEAR...See the 1st paragraph below...
<<Dow drops to four-month low, Nasdaq ends above 4,600
(NEW YORK, Feb 24 (Reuters) - The Dow Jones industrial average slumped to its lowest close for more than four months on Thursday as investors again switched out of the ''old economy'' retailers, banks and manufacturing companies into technology issues.
The Nasdaq market managed to rack up another record to its first close above 4,600 after taking a beating earlier in the session.
The sell-off in the Dow came a day after Federal Reserve Chairman Alan Greenspan warned that rising stock prices were contributing to strong consumer demand but that the central bank would not target stock prices directly.
''I think Greenspan has put his cards on the table and I think he is telling everyone that the Fed is going to raise rates,'' said Charles Payne, head analyst at Wall Street Strategies. ''The spooky part for the market is that even though we don't see inflation, the Fed is going to continue to raise rates. Greenspan's great weapon so far is his ability to talk down the market.''
The Dow (^DJI <http://finance.yahoo.com/q?s=%5edji&d=t> - news </n/_/_dji.html>) skidded 133.10 points, or 1.30 percent, to 10,092.63, its lowest close in more than four months. But the 30-stock index recuperated from an earlier slide that saw it fall below 10,000 to 9,942.78, its lowest intraday level since April 1999.
Pulling the Dow down were interest-rate-sensitive financial services giant American Express Co. (NYSE:AXP <http://finance.yahoo.com/q?s=axp&d=t> - news </n/a/axp.html>), off 7-9/16 at 130-1/16, and drug companies such as Johnson & Johnson (NYSE:JNJ <http://finance.yahoo.com/q?s=jnj&d=t> - news </n/j/jnj.html>), down 3-1/4 at 72-7/8.
The technology-laced Nasdaq Composite Index (^IXIC <http://finance.yahoo.com/q?s=%5eixic&d=t> - news </n/_/_ixic.html>), which had dropped more than 55 points earlier in the session fought back to close up 67.32 points, or 1.48 percent, at a record 4,617.65, marking its first close above 4,600.
The Standard & Poor's 500 Index (^SPX <http://finance.yahoo.com/q?s=%5espx&d=t> - news </n/_/_spx.html>) fell 7.65 points, or 0.56 percent, to 1,353.04.
Boosting the Nasdaq was a technology company that also helped counter the downtrend in the Dow. Intel Corp. (NasdaqNM:INTC <http://finance.yahoo.com/q?s=intc&d=t> - news </n/i/intc.html>), a Dow component and the world's largest computer chip maker, gained 5-3/16 to 114-1/4 on bullish remarks by the brokerage house Robertson Stephens.
The 30-stock Dow index remains in correction mode, having fallen more than 10 percent from its Jan. 14 high of 11,722.98. At Thursday's close, the Dow was down 13.9 percent from its high.
Economic data on durable goods gave Wall Street a mixed inflation picture, reinforcing fears that the Fed may continue to hike interest rates until it sees a relaxing of demand in the U.S. economy.
The Commerce Department reported that durable goods orders fell 1.3 percent in January. Economists had expected the orders to drop 1.4 percent.
But December's durable goods numbers -- showing stronger-than-expected activity -- were revised to an increase of 6.3 percent from a boost of 5.5 percent.
''Often, it is difficult to put your finger on anything that is hurting the market, but when you see the stock market going down and the bond market going up, it means concerns about (corporate) earnings and interest rates are intensifying,'' said Hugh Johnson, chief investment officer at First Albany Corp, Albany, N.Y.
The 30-year U.S. Treasury bond slipped 6/32 with the yield rising to 6.14 percent from Wednesday's close of 6.13 percent.
On the New York Stock Exchange, decliners trounced advances nearly 2 to 1 with 1.17 billion shares changing hands. There were 47 stocks hitting new highs and 354 hitting new lows.
Oil drillers and marine transport companies rose but many sectors were bruised by the selling, including metals, retailers, drug makers, software and paper companies.
Shares of semiconductor companies specializing in chips for the communications market rose after PaineWebber in a special report cited the sector's strong growth prospects.
Arrow Electronics Inc. (NYSE:ARW <http://finance.yahoo.com/q?s=arw&d=t> - news </n/a/arw.html>) jumped 9 to 32 after the No. 1 distributor of semiconductor components reported better-than-expected profits. Three brokerage firms raised their ratings on the company.
Among other big gainers, JDS Uniphase Corp. (NasdaqNM:JDSU <http://finance.yahoo.com/q?s=jdsu&d=t> - news </n/j/jdsu.html>), the world's biggest supplier of parts for fiber-optic equipment in phone networks, soared 22-1/2 to 258.
Qualcomm Inc. (NasdaqNM:QCOM <http://finance.yahoo.com/q?s=qcom&d=t> - news </n/q/qcom.html>), one of the Nasdaq's brightest stars, lost 7-3/16 at 139-11/16 on news that China has inexplicably delayed the roll-out of mobile phone networks that use technology owned by the U.S.-based company.
Intuit Inc. (NasdaqNM:INTU <http://finance.yahoo.com/q?s=intu&d=t> - news </n/i/intu.html>) rose 4-3/4 to 72-5/16 on speculation the world's largest maker of personal finance software would pleasantly surprise with its earnings due after the close. Intuit's stock fell in after-hours trading as its fourth quarter earnings only matched Wall Street's expectations.
Internet media giant America Online (NYSE:AOL <http://finance.yahoo.com/q?s=aol&d=t> - news </n/a/aol.html>) rose 3-7/16 to 60-3/16 and was the most actively traded issue on the NYSE after Credit Suisse First Boston upgraded the stock, along with AOL's merger partner Time Warner (NYSE:TWX <http://finance.yahoo.com/q?s=twx&d=t> - news </n/t/twx.html>). Time Warner was up 5-1/4 to 86-5/16.>>
Best Regards,
Scott
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