Nowhere To Hide
Another rash of earnings warnings sent tech stocks spiraling lower Tuesday
where they were quickly followed by the broader market into the red. Even the
defensive stocks threw in the towel, leaving traders and investors nowhere
left to hide.Â
The Nasdaq’s 6.2% slide put it back
to painful lows not touched since October 1998. The Dow and S&P 500 fared
better but still sank 3.0% and 3.4%, respectively.Â
Volume spiked upward, with 1.37
billion shares trading on the NYSE and 2.50 billion shares changing hands on the
Nasdaq.
The VIX jumped as high as 40.71
before finishing the session up 4.58 to 39.33.Â
Traders commented that this market is
particularly rough right now because traders and investors have little reason to
jump in and buy, so the consequence is the slow and steady decline.Â
“Market sentiment continues to be
more bearish. The trend in the market appears to still be down. Few stocks
appear to be a safe haven, and the real miscreant in the whole mix is the
continuation of earnings disappointments which are surfacing all too
rapidly,” said Alan Ackerman,
Market Strategist, Fahnstock and Company.
“Research analysts continue to run for cover, and that isn’t helping investor
confidence at all. One analyst today on a major
financial show even talked about investors taking a 5 to 15 year outlook on
their investments. That tells me that there are more and more lost souls
surfacing all the time,” he added.
According to preliminary numbers, the
Dow fell 292.62 to 9485.31, the Nasdaq sank 110.34 to 1672.63, and the S&P
500 slid 39.47 to 1106.40.
While most sectors were solidly in
the red, gold and silver
(
$XAU.X |
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PowerRating), managed a gain of 3.4%.
Weakest sectors were telecom
(
$XTC.X |
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down 4.7%, computer technology
(
$XCI.X |
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(
$GIN.X |
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PowerRating),
down 13.0%.
Former monster cap techs falling hard
included PMC Sierra
(
PMCS |
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PowerRating), down 11%, Qualcomm
(
QCON |
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JDS Uniphase
(
JDSU |
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PowerRating), down 16%.
On tech standout was NVIDIA
(
NVDA |
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PowerRating),
which gained 2 1/16 to 64 1/4 on news that NVDA will supply Microsoft’s iBox
video game with chips.
The only positive Dow stock was Home
Depot
(
HD |
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PowerRating), which gained .05 to 42.60. Dow losers were GE
(
GE |
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PowerRating), down 5.0%,
Caterpillar
(
CAT |
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PowerRating), down 5.1%, Hewlett Packard
(
HWP |
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PowerRating), down 5.2%,
Honeywell
(
HON |
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PowerRating), down 5.5%, and J.P. Morgan
(
JPM |
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PowerRating), down 6.7%.
Looking ahead, the next big economic
report due out is the March employment report which will be released at 8:30 AM
ET on Friday.
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