Stocks Craving Good News

Malaise in the technology sector raged on Friday, as good news became scarce
and buyers lost all interest in buying. The Cisco-Dell-Lucent negatives helped
push the Nasdaq down for a 3.6% loss. The only good news was that volume
remained fairly light and the Nasdaq finished about a half-percent off its lows.

Weakness in telecom, transports, cyclicals, and retailers handed the Dow and
S&P 500 losses of 0.9%, and 1.3%, respectively. Despite the pummeling in the
Nasdaq and the weakness in the S&P 500, the Dow is still holding above its
50-and 200-day moving averages.

Volume was a carbon copy of Thursday’s levels as 1.06 billion shares traded
on the NYSE and 1.87 billion shares changed hands on the Nasdaq. 

If it’s good news the market wants, then the only chance of finding any next
week will likely be in D.C. Greenspan is giving his Humphrey Hawkins testimony on
Tuesday in Congress, and Fed watchers would welcome some reassuring words that
the Fed will maintain a hands-on approach to keeping the economy from
collapsing.

“The market is nasty and negative, and there seems to
be no relief from earnings jitters. Because of this, the Nasdaq in particular is
the brunt of some serious selling. We had some Cisco shock earlier this week,
but whether it’s Lucent or Dell, there are few indications of any real strength
in the technology sector for now,” said Alan Ackerman, Market Strategist,
Fahnstock & Co.

“I think realistically it will be a quarter or
two before these companies can get back in gear earnings wise. Much will depend
on how quickly the U.S. economy recovers and what the Fed may do,” he
added.

According to preliminary numbers, the Nasdaq sank 91.10 to 2470.96, the Dow
fell 99.10 to 10,781.45, and the S&P 500 lost 17.77 to 1314.76.

Top sectors were Japanese stocks
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, up 2.1%, integrated oils
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,
up 2.0%, banks
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, up 0.6%, and gold and silver
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, up
0.5%. Japanese stocks got a boost from a rate cut by the Bank of Japan.

On the downside were telecom
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, down 3.2%, computer technology
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, down 4.8%, and Internets
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, down 5.6%. 

Despite the drab day for equities, there were some winners. Amgen
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rose 2 3/4 to 72 9/16 on heavier-than-average volume to close at its highest
level since October 2000. 

One tech-related standout that side-stepped the selloff was storage player
Network Appliance
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which topped earnings estimates after the bell on
Thursday. Network Appliance gained 2 13/16 or 8% to 38 on triple its average
volume.

Dow winners were Philip Morris
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, up 2.2%, Exxon Mobil
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, up
1.6%, and McDonalds
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, up 1.4%. Microsoft
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was the biggest
Dow loser, falling 5.0%.

Looking ahead, the next economic number due out are the January retail sales numbers which will be released Tuesday at 8:30 AM ET. Analysts expect a 0.3%
increase, and that should help indicate whether the recent tech swoon has
rattled consumers.