Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Joey Smith who wrote (72847)	2/4/1999 8:44:00 PM
From: Ibexx	Read Replies (1) \| Respond to of 186894

Joey and thread, Here is a voice of sobriety: Larry Wachtel of Prudential: _________ Closing Stock Market Commentary February 4, 1999, 5:00 p.m. EST High tech was high wrecks today. As the fickle finger of fate finally got around to the big cap technology stocks. The NASDAQ Index, which rose an astounding 14% in January, fell back by 82 points today or 3.3%. This was one of the worst declines in NASDAQ history, exceeded only by the shake out period in August of 1998. Compared to NASDAQ, the 62 point decline in the Dow Jones Industrial Average was mild mannered. And even here, the five point decline in IBM accounted for 20 points of the Dow decline. Breadth showed a 2-to-1 ratio of losers to gainers and big board volume of 855 million shares was hefty. Among the four horsemen of the NASDAQ, Microsoft fell 8, Intel lost 8, Cisco fell 6 and Dell lost 5. but up and down the line, the sacred bulls in high tech land were led off to slaughter. This is not to suggest that high tech had had it. It is to say that there will be speed bumps on the highway to prosperity and today represented a more violent bump. Price cutting in the lower end of the personal computer semi conductor area hurt psychology. The non-blow out quarter from Cisco yesterday was a contributing factor and the 30 point decline in IBM from the top has also provided unsettling. Basically, things had gotten too hot not to cool down. We also had some carnage in the internet with EBay down 39 and Yahoo down 22. But given the stratospheric heights enjoyed by the web stocks, the declines today were relatively mild mannered. Wall Street has also begun to worry about the Federal Reserve. Despite the unchanged monetary policy announced and the absence of any drastic change in the minutes of the December meeting, the crowd continues to speculate about a bubbly economy forcing higher rates in the futures. The long term bond markets fell for a fourth day, sending the bellwether treasury yield up three basis points to 5.29%, the highest in three weeks. Stronger than expected numbers on factory orders and retail sales underscored the robust level of economic activity. Among the casualties Cerner fell 7 and Boron Lepage lost 12 on unfriendly bottom line results on the other hand IXC Communications gained 11 and Timberland advanced 5 on better than expected numbers. Aside and Abetting the downside today was an allocation shift by JP Morgan which took 10% out of stocks and put it into cash. The strategist said that to justify current stock prices the yield on the 30 year treasury would have to fall to 5%, and profits for the S&P companies would have to rise by 12% this year. The commentary found the S&P 500 about 16% overvalued based on current rates and profit forecasts. What we learned once again today is that in the wonderful world of ebb and flow, there are periods of ebb. Not to worry, we've got plenty of cushion. ______ Ibexx