<FONT COLOR=BLUE>MARKET SNAPSHOT--1:31 P.M.--Triple-digit gains for Dow
Rebound for techs in choppy action
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 1:31 PM ET Oct 3, 2000
NEW YORK (CBS.MW) -The Dow Industrials flourished Tuesday as investors snapped up a cluster of its old-economy names. And buying in select big-cap technology issues kept the Nasdaq on firm footing in a session punctuated, however, by extremely volatile action.
Networking and chip stocks sustained the technology arena while Internet shares traded in a mixed fashion. The broad market generated interest in the bank, paper, transportation and biotech sectors while brokerage, drug and utility issues fell in the red.
"We're just bouncing from oversold conditions. Investors got a little too nervous and the downside was overdone," remarked Peter Boockvar, equity strategist at Miller, Tabak & Co.
The Nasdaq still has lost of work to do, he said, but the cyclicals are rebounding nicely Tuesday, underpinning the Dow.
In the meantime, the Federal Reserve is meeting Tuesday, with a decision on interest rates expected at the usual time -- around 2:15 p.m.
Wall Street is unanimous in expecting the central bank to leave the fed funds rate target unchanged at 6 1/2 percent. The Fed's last interest-rate move came on May 16, with a rare 50-basis-point nudge up in borrowing costs. As always, market watchers will scrutinize the statement released by the Fed at the conclusion of its meeting, which is expected to repeat recent language that risks to the U.S. economy remain tilted toward inflation.
The Dow Jones Industrials Average ($DJ) rallied 134 points, or 1.3 percent, to 10,834, just below its highs for the session.
The Dow's frontrunners included DuPont, Intel, Hewlett-Packard, International Paper, United Technologies and 3M. Movers on the downside were Wal-Mart, American Express and IBM.
The Nasdaq Composite ($COMPQ) added 9 points, or 0.2 percent, to 3,577 while the Nasdaq 100 Index ($NDX) gained 26 points, or 0.8 percent, to 3,484.
The Standard & Poor's 500 Index ($SPX) gained 0.9 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks eased 0.1 percent.
Volume stood at 640 million on the NYSE and at 1.10 billion on the Nasdaq Stock Market. Breadth was mixed, with winners beating losers by 15 to 13 on the NYSE while decliners outnumbered advancers by 21 to 17 on the Nasdaq.
Goldman still bullish on tech
Despite all the swings and swoons of late, Goldman Sachs remains bullish on technology stocks, suggesting that concerns over the macro environment may be overdone.
Goldman's chief investment strategist Abby Joseph Cohen said the deceleration in economic growth will prolong the profit expansion. She sees gross domestic product slowing to a 3 to 4 percent pace and said stock markets enjoy the best performance when investors are confident of the sustainability of growth.
Cohen also said she's more comfortable with the tech sector than in February and March as it offers more attractive opportunities.
Analyst Laura Conigliaro told clients that investors' perception may become more positive by November and December and that technology will continue to rise as a percentage of GDP.
The tech groups favored by Goldman include data networking, e-business software and storage networking. Among Goldman's favorites in these groups: Cisco Systems (CSCO), Juniper Networks (JNPR), Network Appliance (NTAP), EMC (EMC), BEA Systems (BEAS) and Oracle (ORCL).
Analyst Rick Sherlund is optimistic on the semis and believes the group will perform well next year. Among Goldman's picks in the group: PMC-Sierra (PMCS) and Linear Technology (LLTC).
Among the stocks mentioned in the group, Cisco Systems put on 6.1 percent, or $3.38 to $58.88, Network Appliance rose $4.81 to $127, Oracle lost $2.88 to $75.88 and BEA Systems fell $4.38 to $74.
Individual movers
Xerox (XRX) fell $3.06, or 20 percent, to $12.25. Xerox warned late Monday that it now expects to report a loss of 15 to 20 cents per share versus the First Call estimate of a profit of 12 cents per share. Xerox cited weaker revenue in North America and Europe, increased competitive pressures and the faltering euro as reason for the huge miss.
In the chip arena, Intel (INTC) added $1.69 to $41.81 and the Philadelphia Semiconductor Index ($SOX) rose 0.7 percent. Separately, the Semiconductor Industry Association reported that worldwide chip sales reached a high f $18.19 billion in August, an increase of 52.7 percent from the $11.91 billion registered during the same period last year.
The fastest growth in sales was witnessed in the wireless and Internet infrastructure markets, with increases spread across all geographical regions, according to SIA president George Scalise.
Abgenix added $3.13 to $75.25. The company (ABGX) announced late Monday that Pfizer filed with the FDA an investigational new drug application for the treatment of cancer, which was generated with the use of Abgenix's XenoMouse technology. The move will trigger an undisclosed payment to Abgenix. The stock is a component of the Nasdaq Biotech Index ($IXBT), which gained 1.1 percent following a 6.3-percent tumble on Monday. Pfizer (PFE), meanwhile, fell 63 cents to $43.63.
Bond focus
Government prices are unlikely to see any major action ahead of the results of the Fed's policy-setting meeting.
The 10-year Treasury note erased 3/32 to yield ($TNX) 5.84 percent while the 30-year bond gave up 6/32 to yield ($TYX) 5.94 percent.
In economic news, August new homes sales fell 3 percent to 893,000, less than the expected 901,000 level. July new home sales were downwardly revised to show an 11.8-percent increase versus the previously reported 14.7 percent surge. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, the dollar traded close to the flatline against both the yen and the euro. Limited reaction was seen to the release of Japan's quarterly "Tankan" report on business conditions.
The Tankan survey revealed better-than-expected business sentiment and an improvement for the seventh straight quarter. The index rose to 10 in the July to September quarter versus the 3-level registered in the previous quarter.
In recent trading, dollar/yen erased 0.2 percent to 108.62 while euro/dollar lost 0.3 percent to 0.8750.
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Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
