D.C. Drama Drags On
Stocks finished mixed Tuesday as a lack of a decision from the Supreme Court
kept stocks edgy for most of the day. Technology stocks sold off into the close,
leaving the Nasdaq down 2.8% at its lows of the day. The Dow was up 0.4%, and
the S&P 500 was down 0.6%.
Nasdaq volume decreased 21% from Monday’s level, as just 1.89 billion shares
changed hands. NYSE volume pulled back by about 11%, as 1.07 billion shares
traded.
"The path of least resistance is up. Although I’m not a political
analyst, I think that when the Presidential election gets resolved and if Mr.
Bush is put in that there will be a nice spike rally off of that. I think that
that rally probably ought to be sold," said Tim Heekin, Director of
Trading, Thomas Weisel Partners.
"I think the market will come in for maybe a couple days after that, but
I think that that will be a buying opportunity. The Nasdaq has still been the
under-performing index, and I think people are starting to look at tech
companies again," he added.
According to preliminary numbers, the Nasdaq fell 83.23 to 2931.87, the Dow
rose 42.47 to 10,768.27, and the S&P 500 slipped 9.02 to 1371.18.
Top sectors were telecom
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up 1.4%, and integrated oils
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Weakest sectors included broker/dealers
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biotechnology
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down 6.3%.
Alan Ackerman, Market Strategist, Fahnstock & Co. had some keen insights
into how to describe this market. "The market’s rally mode of late is
interpreted by some as a Santa Claus Rally, by others as a Bush Rally, and by
still others as a Bear-Trap Rally," he said.
"Only one thing is for sure, and that is that the market continues to
swing widely on a moment’s notice. Because of the swing in this market, it could
well be called the Benny Goodman Market," he added.
Among telecom stocks reviving were Lucent
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up 7.6%, AT&T
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In the back-from-the-dead department, Dell Computer
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or 8% to 21 11/16 on heavier-than-average volume.
Earnings warnings are starting to have contrary reactions in selected stocks
for a change. Last week, Intel rose following its warning, and today, both
Eastman Kodak
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earnings shortfalls for the fourth quarter. Kodak gained 1 1/2 to 41 1/16 and
DoubleClick rose 1 15/16 to 13 7/8. This may indicate that most bad news has
already been factored into stocks, which actually could be looked at as a bullish
sign.
Looking ahead, traders will be waiting for a conclusion to the election duel,
and most are hoping that the process doesn’t drag out too much longer.
Otherwise, the next big economic report is the Producer Price Index on Thursday
at 8:30 AM ET.