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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Joseph Beltran who wrote (17654)	1/2/2002 12:59:18 PM
From: Sully-	Respond to of 99280

U.S. stocks off at midday amid new-year caution (UPDATE: Updates to midday) By Denise Duclaux NEW YORK, Jan 2 (Reuters) - Stocks slipped at midday on Wednesday as investors kept up their guard in the first session of 2002, weighing prospects for an economic recovery with gnawing concerns that share prices are too lofty. ``A lot of people's expectations for a recovery have been baked in,'' said Charles White, president of Avatar Associates, which oversees $2.5 billion. ``In order to break out meaningfully and really establish a profound uptrend, it will will take some further evidence an earnings and economic recovery is coming.'' White added portfolio adjustments usually mark the start of a new year and warned against placing too much emphasis on the weak tone of the first few hours of trading in 2002. History, at least, points to a higher 2002 after two back-to-back years of steep declines -- the first since 1973 and 1974. Chipmakers emerged as a bright spot on Wall Street with rising prices for computer chips nursing hopes the sector is poised for a rebound. Oil services shares like Halliburton Co. (NYSE:HAL - news) fell as investors took profits after a widely expected move by OPEC to cut oil production. The technology-laced Nasdaq Composite Index (^IXIC - news) eased 9 points, or 0.48 percent, to 1,941. The blue-chip Dow Jones industrial average (^DJI - news) lost 46 points, or 0.46 percent, to 9,975. The broader Standard & Poor's 500 Index (^SPX - news) slipped 7 points, or 0.66 percent, to 1,140. ``There are still problems with valuations, which is going to make the market run in fits and starts,'' said Paul Cherney, market analyst at S&P Marketscope. ``I think we will end the year higher, but I don't think we will have gigantic gains.'' A key index of U.S. manufacturing rose more than expected for a second straight month in December, suggesting the sector is well on its way to clawing out of a 17-month slump deepened by the Sept. 11 attacks. The Institute for Supply Management's monthly Purchasing Managers' Index rose to 48.2 in December from 44.5 in November, above economists' expectations of a 45.5 reading, extending a rebound from a 10-1/2 year low of 39.8 in October. After a brief bounce, the market shrugged off the news. Investors have hoisted the market well off three-year lows hit on Sept. 21 as hopes for an economic rebound in 2002 temper concern over the shrinking economy and weak corporate profits. ``There is a feeling the economy is recovering, so some of that has been discounted already,'' said A.C. Moore, chief investment strategist at Dunvegan Associates. ``And after difficult years, markets tend to be hesitant ... with investors reflecting.'' South Korea's Hynix Semiconductor Inc. announced a 30 percent hike in contract chip price, sparking a rise in chipmakers across the globe by signaling a possible rebound for the hard hit sector. Micron Techology Inc. (NYSE:MU - news), the No. 2 memory chip maker, rallied $1.68, or more than 5 percent, to $32.68. Intel Corp. (NasdaqNM:INTC - news), the world's No. 1 provider of computer chips, gained 71 cents to $32.16. The Philadelphia Stock Exchange Semiconductor index (^SOXX - news) tacked on a 1.27 percent gain, extending its surge since Sept. 21 as investors bet chip shares will be the first to recover in an economic rebound. The Philadelphia Stock Exchange oilfield services index (^OSX - news) dropped 4.72 percent. Analysts said losses were linked to profit-taking after gains last week driven by a rise in crude oil prices as OPEC nations agreed to cut their oil production by 1.5 million barrels per day. EBay Inc. (NasdaqNM:EBAY - news) dropped $2.02 to $64.88. Wall Street house Robertson Stephens lowered its investment rating on the Internet auction site to ``buy'' from ``strong buy'' after recent stock-price appreciation and prospects of new investment spending that would limit short-term margin expansion. Kmart Corp. (NYSE:KM - news), the No. 2 discount chain behind Wal-Mart Stores Inc. (NYSE:WMT - news), dropped 73 cents, or more than 13 percent, to $4.73. Prudential Securities cut its rating on Kmart to ``sell'' from ``hold,'' citing disappointing fourth-quarter results as well as cash flow concerns. AT&T Corp. (NYSE:T - news) rose 24 cents to $18.38. Merrill Lynch raised its intermediate term rating on the Dow component to ``buy'' from ``neutral'' because of Comcast Corp.'s (NasdaqNM:CMCSK - news) purchase of AT&T's cable television business for $47 billion. biz.yahoo.com