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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Nick who wrote (26409)	12/20/2000 4:25:22 PM
From: stockman_scott	Respond to of 65232

Market Update: Bloodbath on Wall Street -- Nasdaq Posts Lowest Close Since March 1999 By Diane Hess Staff Reporter / TheStreet.com 12/20/00 4:12 PM ET Watch out for falling stocks! For the seventh straight session, the Nasdaq Composite Index plummeted -- this afternoon hitting its lowest level since March 23, 1999 -- amid serious concerns about corporate profits in the technology sector. The Dow Jones Industrial Average, meantime, plunged over 250 points on the heels of yesterday's Federal Reserve decision to leave interest rates unchanged, but to adopt an easing bias. Last night, Foundry Networks (FDRY:Nasdaq - news), which makes Internet networking products, cautioned that it would miss its previous earnings expectations, due a shift in spending on communication infrastructure. (TheStreet.com discussed Foundry's announcement in a separate story.) Foundry's warning set off alarm bells among owners of networking equipment stocks: At last look, Cisco (CSCO:Nasdaq - news) and Juniper Networks (JNPR:Nasdaq - news) had each decreased more than 12%. Extreme Networks (EXTR:Nasdaq - news), a close rival to Foundry, lost 57.6% to $13. As a result, analysts from ABN Amro, Robertson Stephens, SG Cowen and Merrill Lynch passed negative notes and downgrades Foundry's way. But Foundry was not the only target of Wall Street analysts today. This morning, Merrill Lynch cut its ratings on Hewlett-Packard (HWP:NYSE - news), Cisco and IBM (IBM:NYSE - news) to near-term neutral from accumulate. The firm said that it was not only troubled about the slowing technology sector, but also was quite concerned with the amount of money being spent on information technology. Slower corporate spending on IT would wreak havoc on the earnings picture at nearly every technology company. H-P was down 2.8%, and IBM was lower by 4.6%. Another Nasdaq stock, Manugistics (MANU:Nasdaq - news), which licenses and supports software products, reported earnings that -- believe it or not -- beat Wall Street's forecasts. But in recent trading, Manugistics was down 3%. Shares of Siebel Systems (SEBL:Nasdaq - news) had recovered lost territory earlier today, after a note from Credit Suisse First Boston that questioned the company's growth knocked the wind out of its sails yesterday. But Siebel ended in the red again, down $3.56, or 5.6%, to $59.81. Over on the Dow front, drug stocks Merck (MRK:NYSE - news), up 2.1%, and Johnson & Johnson (JNJ:NYSE - news), ahead 1.5%, were two of the index's points of light in late-day trading. Also, Big Boarder athletic shoe and apparel maker Nike (NKE:NYSE - news) was up 3.3% after it reported second-quarter earnings in line with estimates. Sector Watch Energy-related sectors were down in the dumps today as energy prices slid off their highs. The American Stock Exchange Oil Index was 2.3% lower and the Philadelphia Stock Exchange Oil Service Index was off 3.8%. Transportation stocks suffered because of concerns that oil prices were still too high, despite their recent slide. The Dow Jones Transportation Average was dropping 1.7%, while the American Stock Exchange Airline Index slid 1.8%. FedEx (FDX:NYSE - news) started the concern after posting second-quarter earnings in line with estimates. That was great news, but it was tempered by the transport saying its fuel expenses were $78 million higher than in the year-ago period, and that includes the affects of hedging to lock in low prices. Tech-related sectors were all lower, including the Philadelphia Stock Exchange Semiconductor Index, down 6.5%, and the Morgan Stanley High-Tech 35, down 7.3%. The Philadelphia Stock Exchange Computer Box Maker Index was down 5.3% thanks to the aforementioned Merrill note. TheStreet.com E-Commerce Index was getting slaughtered, plummeting 9.8%. BroadVision (BVSN:Nasdaq - news), eBay (EBAY:Nasdaq - news) and Ticketmaster Online-CitySearch (TMCS:Nasdaq - news) were among the hardest hit there. Bonds/Economy Treasury note and bond prices were sharply higher as investors worried that yesterday's decision by the Fed to leave interest rates unchanged will further slow the economy. That possibility is weighing on stock prices, which helps the bond market. The benchmark 10-year Treasury note lately was up 31/32 to 105 5/32, lowering its yield to 5.065%. Bond prices were rising despite signs of strength in the housing sector of the economy. Housing starts ( definition \| chart \| source ) rose more than expected in November, to 1.562 million from 1.528 million in October. Economists polled by Reuters had forecast a rate of 1.536 million.