No Surrender
The Dow traded above 11,000 for the fourth time this year but yet again
failed to close above what has become an elusive psychological level. Weakness
in financials and cyclicals kept the Dow and S&P 500 slightly in the red,
but the Nasdaq, on the other hand, fought its way back to an 0.8% gain that put it within 7 points of its 50-day moving average.
Tech stocks rebounded a bit from their recent malaise with solid gains in
some of the tried-and-true big caps. Cisco closed up 1 3/16 to 35 3/4 as traders
figured most bad news had already been priced into the stock. After the close,
the company announced earnings of 18 cents per share after the bell, a penny shy
of estimates, and that sent Cisco down more than a dollar in after hours trading.
Volume remained light, with Nasdaq levels rising about 10% above Monday’s
level as 1.76 billion shares changed hands. NYSE volume was flat, with 1.04
billion shares trading.
“I think the market’s going to be in a little bit of a trading range
here, certainly going toward whatever might happen relative to the next rate
cut. There’s no question the market is wanting another rate cut, but whether the
market gets a surprise rate cut or not before the next meeting is going to be
sort of the platform question,” said Tony Cecin, Director of Equity
Trading, U.S. Bancorp/Piper Jaffray.
“Simplistically speaking, the market’s going to want rate cuts until
it’s obvious it doesn’t need them anymore. The question now is whether Greenspan
does something in February, and otherwise we will probably mark time in
without any clear-cut direction,” he added.
Top sectors were biotechnology
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up 4.0%, oil services
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up 0.6%.
On the downside were insurance
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down 2.3%, and gold and silver
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Among the tech boomers was Dell Computer
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10% to 26 7/8 on heavier-than-average volume.
Biotechs and genomics showed new vigor, and one winner was Celera Genomics
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which rose 4.45 or 10% to 46.15.
In other earnings news, Walt Disney
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share which topped analyst expectations by a penny. The House of the Mouse
gained 1.18 to 31.61 and was one of the top performers in the Dow.
Joining Disney to lead the Dow was Hewlett Packard
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McDonald’s
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Financials were weak, and that was evident in the Dow. Dow losers were
Citigroup
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Morgan
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Looking ahead, the fourth quarter productivity numbers will be released at
8:30 AM ET on Wednesday.