Softie Managed To Shine
Tensions in China, warnings worries, and economic numbers showing little
chance for emergency rate cuts all combined to deal stocks a blue Monday. The
Nasdaq finished off its lows, but traded down 3.1% to levels not touched since
Oct. 1998. Despite the gloom, Dow component Microsoft was one of the few stocks
that shone through with a 2% gain.Â
The Dow and S&P 500 contained their losses thanks in part to strength in
cyclicals and select financials and finished down 1.0% and 1.4%, respectively.
Volume was moderate for a Monday, as 1.2 billion shares traded on the NYSE
and 1.8 billion shares traded on the NYSE.
A stronger-than-expected reading on the National Association of Purchasing
Managers report and an earnings warning from Dow component American Express also
weighed on the market.
The NAPM came in with a reading of 43.1%, which was better than the 42.5%
that analysts expected. The strong NAPM may have dashed hopes for an
inter-meeting rate cut, and that may explain the funk in stocks Monday.
“As the first quarter draws to a close, market indices are well down and have seen a certain amount of capitulation. It is
now possible to have a significant rally from those oversold levels in the Dow Jones and the S&P, but still see the
Nasdaq go lower,” said Robin Griffiths, Global Market Strategist, HSBC.
According to preliminary numbers, the Dow fell 100.85 to 9777.93, the Nasdaq
sank 57.38 to 1782.88, and the S&P 500 fell 14.48 to 1145.85.
Top sectors avoiding the selloff included insurance
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and chemicals
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Weakest sectors were Internets
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down 7.0%, and semiconductors
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American Express said earnings would likely fall 18% short of analyst
estimates for the upcoming quarter, and that help send AXP down 1.51 or 3.6% to
39.71. American Express was the second worst Dow stock and was topped to the
downside by Hewlett Packard
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Dow winners included Microsoft
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0.7%, and Coca-Cola
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Among tech standouts was Oracle
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15.32. That gain shows just how far the Nasdaq has fallen because 34 cents
actually is 2.2%.
Also avoiding the tech slide was Ciena
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heavier-than-average volume.
Looking ahead, the factory orders for Feb. will be out at 10:00 AM ET.
Analysts expect an increase of 0.2%.