Naz Reversal Holds 2600
Fallout from Cisco’s less-than-stellar earnings report weighed heavily on the
tech group with the networking group getting hit the hardest. The Nasdaq fell
more than 100 points or 4% intraday but managed to stage a nice reversal late in
the day to cut its decline to just 2%.Â
But not all tech stocks were in the gutter. Strength in Microsoft and IBM
helped keep the Dow loss to just 0.1% while the S&P 500 slipped 0.9%.
Nasdaq volume increased by 18% over Tuesday’s level, as 2.0 billion shares
changed hands. NYSE volume rose 10%, with 1.1 billion shares trading.
With bellwether Cisco receiving a flurry of downgrades and trading to its
lowest levels since August of 1999, it seems that most of the bad news for tech
may finally be getting priced into the bellwethers. Some analysts even
commented that it might be time for some bargain hunting.
“The earnings releases and the guidance for the coming quarters for the last two or
three weeks has been very troublesome and punishing. Cisco’s comments yesterday sort of crowned that, and now it’s made a new recent low
here, so that part of the market looks like it still is going to have to bear some bad weather going
forward,” said Edward Wedbush, President, Wedbush Morgan Securities.
“But I would have to say that looking at some of these technology stocks that are down from $100 or more to five, 10 or 15
dollars, I would take a good look at some of them. If they have decent balance sheets and can get their cash flows positive, then they are currently
under-priced,” he added.
According to preliminary numbers, the Dow fell 10.70 to 10,946.72, the Nasdaq
lost 56.67 to 2607.82, and the S&P 500 slipped 11.37 to 1340.89.
Top sectors included retailers
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up 1.0%, and consumer stocks
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Weaker sectors were broker/dealers
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down 3.5%, and semiconductors
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Microsoft
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news that the company will discuss in appeals court some of Judge Jackson’s
actions and comments after the antitrust case. This led some tech watchers to
wonder whether a settlement might finally be reached in the case.
Also avoiding the tech selloff was wireless giant Qualcomm
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added 3 11/16 to 86 5/8.
Another tech standout was Gemstar
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3/16 on nearly double average volume.
Joining Microsoft as Dow winners were Wal-Mart
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up 2.5%, and Johnson & Johnson
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General Motors
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Looking ahead, economic news for the rest of the week remains light, but
traders will be focusing on the weekly jobless claims. The report spiked up to
346,000 last week.