Naz Battles For Flat Finish
A weaker-than-expected third quarter Gross Domestic Product figure helped put
stocks in a little better mood Thursday following the previous day’s Nasdaq
drubbing. The Nasdaq battled between red and green all day and managed to eke
out a 0.3% gain.
Continuing signs of a weakening economy helped give financials a boost, and
that helped push the Dow up 1.6% and the S&P 500 up 0.8%.
Third quarter GDP was an anemic 2.2%, which was below the anticipated 2.4%
growth rate. The number is the slowest growth rate since 1996, and leaves many
Fed critics wondering why the Fed failed to cut rates on Tuesday.
In addition to the weak GDP figure, weekly jobless claims spiked up 34,000 to
354,000, which is a significant increase from last week’s 320,000.
Volume was again very heavy, though slightly lower than Wednesday’s levels.
Nasdaq volume reached 2.7 billion shares while NYSE volume ended at 1.4 billion
shares.
“Tech selling is certainly winding down, and the activities today do
look as if maybe the funds have started to do some window dressing and realign
their portfolios. So, if we can hold most of the strength today I would expect
to see some further strength coming in between now and the end of the year,”
said Harry Laubscher, Market Analyst, Tucker Anthony.
“The Nasdaq Composite Index is certainly not out of the woods, but as
long as it can hold above the 2200 level, then that would be a positive. We’re
still anticipating a good rally during the initial months of the first quarter,”
he added.
Top sectors included chemicals
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products
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banks
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On the downside were gold and silver
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down 1.8%, and Internets
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The pain continued in the telecom arena where Lucent
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restructure its business and that its financial woes would continue into the
next quarter. After closing down 1 7/8 to 15 1/2 on Wednesday, Lucent lost
another 1 5/16 or 8% to 14 3/16.
The weakness in the telecom space is partly to blame for the continuing
collapse of many of the opticals and networkers. The reason for this is that the telcos are the big purchasers of the Net infrastructure nuts and bolts. Former leaders under the gun
were PMC Sierra
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down 2 3/4 to 43 1/4. Both hit 52-week lows.
Top Dow gainers were Wal-Mart
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J.P. Morgan
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Microsoft
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Biggest dogs in the Dow were IBM
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down 10%.
Looking ahead, November’s durable goods orders will be out Friday at 8:30 AM
ET, and analysts expect a 1.6% increase. It will be interesting to see if this
number falls short like most other numbers of late.