<FONT COLOR=BLUE>MARKET SNAPSHOT--2:02 P.M.--Dow ekes out a gain. But sloppy performance for techs
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 2:02 PM ET Sep 21, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - Buyers emerged to take the Dow Industrials a touch higher Thursday, led by a sharp jump in shares of 3M. The Nasdaq sagged, however, with losses clustered in the chip sector.
Profit warnings and the oil muscle-flexing has put a lid on the market's attempts to rally in recent sessions, hurting old- and new-economy companies alike. On Thursday, November crude took a respite, dropping $1.12 to $34.12.
James Herrick, managing director of equity trading at Robert Baird & Co., believes it will be tough for the market to make any lasting progress during the pre-announcement period. Investors, he said, will be extremely selective as they navigate through the earnings season.
Inside the market, oil and oil service shares fumbled, as did financial and biotech stocks. Thursday's gainers included retail, drug and paper issues. Within technology, chip and Internet stocks slumped.
The Dow Jones Industrials Average ($DJ: news, msgs) advanced 30 points, or 0.3 percent, to 10,718.
Minnesota Mining and Manufacturing led the Dow higher, putting on 6 percent, or $4.88 to $86.63. The company (MMM: news, msgs) said Thursday that it expects annual sales growth of about 11 percent and per-share earnings growth of around 13 percent over the next three years. See full story.
The Dow's other frontrunners included Home Depot, Honeywell and Boeing. The blue-chip barometer's financial components were the biggest drag, as American Express, J.P. Morgan and Citigroup checked in with the heaviest losses.
The Nasdaq Composite ($COMPQ: news, msgs) slipped 45 points, or 1.2 percent, to 3,851 while the Nasdaq 100 Index ($NDX: news, msgs) fell 47 points, or 1.2 percent, to 3,742.
The Standard & Poor's 500 Index ($SPX: news, msgs) subtracted 0.5 percent while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks dropped 0.8 percent.
Separately, volume checked in at 574 million on the NYSE and at 832 million on the Nasdaq Stock Market. Market breadth was shabby, with losers beating winners by 16 to 10 on the NYSE and by 22 to 14 on the Nasdaq.
Cohen still bullish
Goldman Sachs' influential chief investment strategist, Abby Joseph Cohen, reaffirmed her year-end 2000 S&P 500 target of 1,575 and her mid-year 2001 target on the broad market index of 1,650.
Cohen told clients she believes the fundamental backdrop for U.S. stocks and the economy remains extremely favorable. Investors have been alarmed by rising energy prices and the slumping euro, she said, but has maintained operating earnings-per-share estimates of $56 for 2000.
The potential for expansion without inflation has been lifted in the U.S. thanks to the strides made in productivity, Cohen said. She views the deceleration in gross domestic product to a 3 to 4 percent growth rate as healthy as it will assure a durable, non-inflationary rate of growth.
Cohen believes the euro is undervalued against the dollar and believes the currency argument that has been brought up by many companies will fade.
Individual movers
Goodyear Tire & Rubber (GT: news, msgs) is the latest in a series of companies reporting a shortfall in earnings due to the sagging euro and higher prices of energy and raw materials.
Goodyear said it expects to breakeven or report a small loss for the third and fourth quarters compared to Wall Street's expectation for a 29-cent-per-share gain in the third quarter and earnings of 35 cents a share in the fourth quarter. Shares slipped $3.13, or 14 percent below Thursday's official NYSE close, to $18.75. See full story.
Brokerage stocks are taking it on the chin following a disappointing earnings report from Morgan Stanley Dean Witter. The company (MWD: news, msgs) posted third-quarter earnings of $1.09 a share, missing the First Call estimate of $1.17 a share but ahead of the 83 cents made in the year-ago quarter. The stock (MWD: news, msgs) slid 7.2 percent, or $6.94 to $89. Earlier in the week, Lehman Brothers and Goldman Sachs unleashed their quarterly results, both surpassing the Wall Street consensus estimates. See full story. Lehman (LEH: news, msgs) fell $4.50 to $141.50 while Goldman (GS: news, msgs) lost $1.94 to $118.
Checking the indexes, the Amex Securities Broker/Dealer Index ($XBD: news, msgs) fell 3.7 percent while the S&P Bank Index ($BIX: news, msgs) eased by 2.3 percent.
Internet stocks were weighed down by EBay's sell-off following a 17 percent jump on Wednesday. EBay (EBAY: news, msgs), off 7.3 percent, to $71, saw its rating lowered by CS First Boston to a "buy" from a "strong buy." First Boston said the market was quick to react to EBay's strong management presentation Wednesday, rising past its price target of $72. "Given this, the immediacy we felt investors should have had towards buying EBay is now somewhat diminished," First Boston said.
The Goldman Sachs Internet Index ($GIN: news, msgs) lost 1.3 percent while Merrill Lynch's Internet Holdrs (HHH: news, msgs) slipped 1.3 percent.
In earnings news, ConAgra (CAG: news, msgs) posted first-quarter earnings of 30 cents share, matching the First Call estimate. The stock edged up 6 cents to $18.81.
Treasury focus
Government prices enjoyed a slight bid in the long end Thursday while short-dated issue hugged the flat line.
The 10-year Treasury gained 1/32 to yield ($TNX: news, msgs) 5.90 percent and the 30-year Treasury bond was flat to yield ($TYX: news, msgs) 5.96 percent. See Bond Report.
On the economic front, Thursday saw the release of the Philadelphia Fed Index for September, which fell to 8.2 from 14.1. Meanwhile, weekly initial claims fell 18,000 to 308,000. Still ahead is the August Treasury budget data. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, the euro recovered a touch after reaching a fresh low on Wednesday. Dollar/yen (C_JPY: news, msgs) erased 0.2 percent to 106.40 while euro/dollar (C_EUR: news, msgs) climbed 0.7 percent to 0.8545.
The euro and rising oil prices are expected to be the topics of conversation at the G-7 meeting in Prague this weekend. In the meantime, Treasury Secretary Larry Summers reiterated on Wednesday that a strong U.S. dollar remains in the best interest of the U.S.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
