Nasdaq Stuck In Bunker
Earnings warnings from Microsoft, Clorox, and Black and Decker and downgrades
on EMC and Sun Micro weighed heavily on stocks Friday, as the largest-cap,
ever-dependable techs tanked. The Nasdaq lost 2.7% for the day which was
significantly off its intraday decline of nearly 5.0%.
An inflation-friendly Consumer Price Index report failed to spark any
optimism in the broader market. Pockets of sluggishness kept the Dow down 2.2%
and the S&P 500 down 2.1%.
The CPI increased 0.2% which was as-expected, but the CPI core rate rose 0.3%, which was just ahead of the anticipated 0.2% increase.Â
Volume picked up substantially thanks to triple witching. Nasdaq volume
surged to 2.58 billion shares, which was nearly 50% above Thursday’s level. NYSE
volume also spiked 50% to 1.55 billion shares.Â
“The U.S. economy is slowing down. This was deliberate
policy because it had been growing too fast. However, an oil shock has now
ensued and it has slowed too fast and if nothing is done a hard or crash landing
is likely. This increases the probability that action will be forthcoming but
there are long time lags involved,” said Robin Griffiths, Chief Technical
Strategist, HSBC.Â
“In addition, the unprecedented delay in
electing a new President has increased uncertainty. Now that this issue has been
solved there probably will be a bear closing rally and a run up into the
new-year to inauguration day, although a Bush win is already partly discounted,”
he added.
According to preliminary numbers, the Nasdaq fell 74.09 to 2645.42, the Dow
sank 240.03 to 10,434.96, and the $&P 500 slipped 28.60 to 1312.33.
Top sectors were gold and silver
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up 2.0%, and integrated oils
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On the downside were telecom
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down 2.6%, and computer technology
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Tech casualties were Microsoft
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8.7%, Intel
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Among tech winners were Oracle
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7/8 after topping earnings estimates.
Adobe Systems
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which sent Adobe up 5 1/8 or 8.9% to 62 7/16.
In the what’s working department, Adolph Coors
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level consolidation on double average volume and finished up 3 1/2 to 79. Coors
has been the place to be since its March 8, 2000 low of 37 3/8.
Dow winners were J.P. Morgan
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and 3M
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Looking ahead, traders await the Federal Reserves Tuesday meeting where many
believe we will see at least a decrease to a neutral bias toward inflation. Word
of the decision will come at 2:15 PM ET.