Against The Ropes
Chip downgrades and pre-earnings worries cast a shadow across the Nasdaq
landscape Tuesday, sinking the index another 3.4%. The Nasdaq has now fallen
more than 1000 points or 25% from its September 1 intraday high of 4259.87.
Banks and broker/dealers continued their recent slide, in part because of
rumored high-yield bond losses some of the major brokerages’ trading operations.
The weakened financials helped pull the S&P 500 down 1.1%. The Dow eased
just 0.4%.
Volume spiked back up from Monday’s light holiday showing, with 1.85 billion
shares trading on the Nasdaq and 1.04 billion shares changing hands on the
NYSE. While volume lifted, it by no means approached the washout levels that
more and more analysts believe the market needs before reversing its downward
spiral.
“There’s some bloodletting, but I don’t think we’ve seen
a capitulation yet. There’s a lot of pain right now given the precipitous
decline of the semiconductor index and the Nasdaq as a whole, but there hasn’t
been a really cataclysmic give-up yet,” said Scott Cummings, General Partner, Agile
Asset Management.
“I think that still needs to happen
before we can get any sustained movement to the upside. So the real possibility
is that we get a few disappointments from some of these upcoming technology
companies that are due to report,” he added.
According to preliminary numbers, the Nasdaq fell 115.00 to 3240.56, the Dow
slid 44.03 to 105.24, and the S&P 500 lost 16.09 to 1385.94.
Top sectors were oil services
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up 2.4% and drugs
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On the downside were banks
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down 4.4%, and semiconductors
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Big cap giants under pressure were Cisco
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down 3.7%, and Sun Microsystems
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Clobbering the SOX were Xilinx
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PowerRating), both of which fell after getting hit with analyst downgrades. For the day, Altera fell 11 1/16
to 29 3/4, and Xilinx dropped 16 11/16 to 62 1/2.
Looking ahead, economic news set for a Friday release includes the Producer Price Index and retail
sales figure for September.