Blue-Chips Fade
Blue-chips gave back some of their recent gains Tuesday as retailers and
financial stocks weighed on both the Dow and the S&P 500, sending each down
1% and 0.5%, respectively. The Nasdaq, however, managed to eke out a 2 point
gain thanks to another solid performance in semiconductors. Positive comments
about chip companies from Morgan Stanley Dean Witter helped boost the SOX.
Volume improved upon Monday’s anemic levels but again remained light, with
1.34 billion shares changing hands on the Nasdaq and 895 million shares trading
on the NYSE.
In economic news, July’s industrial production number came in at the expected
0.4%, but stocks generally remained unaffected by the number.
“We’re seeing a very quiet pullback from yesterday’s very powerful move
up. The overall tech area is a little bit weak today, and the financials are a
little bit weaker, but we’re not seeing any real money coming out of the
group,” said Brian Conroy, Head of Listed Trading, J.P. Morgan.
“We’re still finding buyers in some of the older cyclical names, but
mainly I think people have just stepped back after yesterday’s powerful up move,
and they’re just trying to take a look and see what’s happening,” he added.
According to preliminary numbers, the Dow slipped 109.14 to 11067.00, the
S&P 500 dropped 7.13 to 1484.43, and the Nasdaq nothched a 2 point gain to
3851.69.
Top-performing sectors included semiconductors
(
$SOX.X |
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Internets
(
$GIN.X |
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(
$JPN.X |
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and chemicals,
(
$CEX.X |
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On the weak side were transportation
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$TRX.X |
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broker/dealers
(
$XBD.X |
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(
$RLX.X |
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3.4%.
Red-hot semis that helped pace the chip sector’s gains included Micron
(
MU |
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up 7.5%, National Semiconductor
(
NSM |
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(
RMBS |
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Applied Materials
(
AMAT |
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(
TXN |
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4.0%.
The Goldman Sachs Internet Index
(
$GIN.X |
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PSI Net
(
PSIX |
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(
AMZN |
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(
EBAY |
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7.6%, RealNetworks
(
RNWK |
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(
VRSN |
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Dow component Home Depot
(
HD |
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per share, but the home products retailer collapsed anyway, falling 5 7/16 or 9%
to 53 9/16. Also dragging the Dow lower were McDonalds
(
MCD |
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Hewlett Packard
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HWP |
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(
BA |
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Dow winners included Procter & Gamble
(
PG |
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(
MO |
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up 1.7%, and Intel
(
INTC |
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Economic news slated for Wednesday includes July’s Consumer Price Index, the
CPI core rate, and July’s new housing starts. Analysts expect both CPI figures
to show a 0.2% increase, while the new housing starts figure is projected to be
1.57 million units.
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