Nasdaq Plunges While Cyclicals Shine
After gaining nearly 500 points since Nov. 1, the Nasdaq fell victim to profit-taking Tuesday as several of the big-cap technology leaders finally took a breather from their month-long run. As well, many of the recently red-hot Internet and networking-related stocks saw sharp price declines.
According to preliminary figures, the Dow fell 70.11 points, or 0.6%, to 10877.81, the Nasdaq was down 85.22 points, or 2.5%, to 3336.15, and the S&P 500 fell 1.3% to 1389.07.
While technology showed weakness, there was new strength in financials and cyclicals. The top performing groups of the day included forest and paper products [$FPP.X>$FPP.X], up 2.7%; banks [$BIX.X>$BIX.X], up 1.5%; broker-dealers [$XBD.X>$XBD.X], up 1.5%; and oil services [$OSX.X>$OSX.X], up 1.0%.
Groups showing weakness included computer software [$CWX.X>$CWX.X], down 2.9%; telecom [$XTC.X>$XTC.X], down 3.3%; and Internet [$GIN.X>GIN.X], down 4.0%.
Big-cap technologys that saw profit-taking included Intel [INTC>INTC], down 2 * at 76 11/16; Cisco [CSCO>CSCO], down 3 9/16 at 89 3/16; and Sun Microsystems [SUNW>SUNW], down 4 9/16 at 132 *.
Internets that saw big drops included Yahoo [YHOO>YHOO], down 13 3/8 at 212 *; and America Online [AOL>AOL], down 6 1/16 at 72 15/16.
One tech bright spot was Apple [AAPL>AAPL]. JP Morgan bumped up its price target on the PC concern to 115, the stock gaining 3 5/16 to close at an all-time high of 97 7/8.
Traders now look toward Wednesday’s release of the National Association of Purchasing Managers Index and construction spending report that should provide players with more clues as to any budding inflationary pressures.