Revenge Of The Dow
A day ahead of the much-anticipated December Employment Report, banks, brokerages, and cyclicals are rallied while technologys and Internets continued their sharp sell-off. The rotation into recently neglected stock groups continued again Thursday, and that helped the Dow remain positive and avoid the profit-taking that pummeled the Nasdaq.
The Nasdaq again faced harsh selling pressures throughout the day and even traded intra-day more than 10% below its January 3rd all-time high.
According to preliminary numbers, the Dow gained 130.61 to 11253.26, the Nasdaq fell 150.34 to 3727.20, and the S&P 500 rose 1.35 to 1403.46.
Top performing groups Thursday were chemicals [$CEX.X>$CEX.X], up 4.1%, transportations [$TRX.X>$TRX.X], up 4.6%, banks [BKX.X>BKX.X], up 5.0%, and oil services [$OSX.X>$OSX.X], up 5.3%.
Groups that were hit hardest by the selling Thursday included telecom [$XTC.X>$XTC.X], down 2.1%, technology [$XCI.X>$XCI.X], down 2.0%, software [$CWX.X>$CWX.X], down 5.2%, and Internets [$GIN.X>$GIN.X], down 5.7%,
Stocks leading the Dow higher looked like a list of last year’s Dow losers. Leading Dow components included Minnesota Mining & Manufacturing [MMM>MMM], Exxon Mobil [XOM>XOM], Du Pont [DD>DD], and Caterpillar [CAT>CAT]. Dow losers on Thursday were AT&T [T>T], Microsoft [MSFT>MSFT], Intel [INTC>INTC] and Home Depot [HD>HD].
The rally in the banking group came after many banks recently traded at 52-week lows. Leading the group higher Thursday were JP Morgan [JPM>JPM], Bank of America [BAC>BAC], PNC Bancorp [PNC>PNC], and Wells Fargo [WFC>WFC] which each gained more than 4%.
In the broker/dealer group, Lehman Brothers [LEH>LEH] announced better-than-expected fourth-quarter earnings of $2.28 per share which beat Street estimates of $1.97 per share. Lehman gained 2 15/16 to 72 7/8 on the news. Also strong in the group were and AG Edwards [AGE>AGE], up 1 1/16 to 31 1/8, and Goldman Sachs [GS>GS], up 3 3/8 to 82 1/4.
Internets sustained big losses Thursday with recent high-flyers like Yahoo [YHOO>YHOO], Commerce One [CMRC>CMRC], DoubleClick [DCLK>DCLK], CMGI [CMGI>CMGI], Akamai [AKAM>AKAM], and Broadvision [BVSN>BVSN] all dropping more than 25 points each on the day.
Big-cap technologys suffered along with the Internets. Weakness was evident in Microsoft [MSFT>MSFT] down 3 13/16 to 110, Intel [INTC>INTC] down 4 7/8 to 78 3/4, Cisco [CSCO>CSCO] down 1 11/16 to 100, and Sun Microsystems [SUNW>SUNW] down 3 7/8 to 68.
Traders look toward Friday’s December Employment Report that will include unemployment numbers, average hourly wages, and non-farm payrolls. The report will be released at 8:30 AM ET.