Red September
Concerns ranging from potential inflation to fears of a slowdown in
technology spending weighed heavily on the Nasdaq Friday, as the average gave
back all of Thursday’s gains and finished down 2.9% for the day. The Nasdaq has
fallen nearly 230 points in the month of September and also closed below its
200-day moving average for the first time since August 22.
Strength in retailers, banks, and consumer stocks helped keep the Dow’s and
S&P 500’s losses somewhat contained, as they fell 0.3% and 0.5%,
respectively. Several analysts were pleased by the strength in the banks but
commented that the swoon in the tech sector could be the market factoring in an
interest-rate and energy-price induced economic slowdown.
Volume remained in the summertime light mode, with 1.50 billion shares
trading on the Nasdaq and 963 million shares changing hands on the NYSE.
"I think the market is in a small consolidation phase, and although
there recently was no Fed action, it doesn’t mitigate the fact that we’ve got a
little bit of inflationary pressure coming from raw material prices and energy
prices. So, I think the market is digesting that news," said Louis Parks,
Senior Managing Director, Raymond James Financial.
"I see some portfolio managers right now just tweaking some positions,
making some small sales in some of the more growth-oriented names and adding on
to some of the names they think will benefit from a slightly inflationary trend
they may see in the marketplace. So we are continuing to see interest especially
in the energy stocks and in some of the commodity-related stocks," he
added.
According to preliminary numbers, the Nasdaq sank 119.03 to 3979.32, the Dow
eased 38.11 to 11,221.76, and the S&P 500 slipped 7.87 to 1494.64.
The worst-performing sectors were semiconductors
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Internets
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Top sectors of the day were retailers
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up 2.3%, insurance
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1.0%.
Big cap techs under pressure included Oracle
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down 3.6%, Intel
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2.6%.
Components of the SOX falling the most were KLA-Tencor
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3/8 to 55 3/4, Teradyne
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down 4 7/8 to 75 1/2, and Micron
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Dow winners were SBC Communications
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up 4.8%, and Citigroup
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down 3.2%, General Motors
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5.0%.
Looking ahead, the next big round of economic news are the August Producer
Price Index and the August retail sales numbers which are due out next Thursday.
Consensus estimates look for a 0.1% increase in the PPI and a 0.2% increase in
retail sales.