Warnings Wilt Naz
An earnings warning from Oracle rattled tech stocks Friday, and while the
Nasdaq did manage to turn positive at mid-day, it faded into the close for a
3.0% loss. A flurry of analyst downgrades in the software sector also helped
cast the shadow across the Nasdaq.
The Dow was able to eke out a 0.2% gain thanks to strength in cyclicals while
the S&P 500 edged down by 0.6%.
Volume picked up a tad from Thursday’s level as 2.36 billion shares traded on
the Nasdaq and 1.28 billion shares changed hands on the NYSE.
In economic news, the University of Michigan Consumer Sentiment Report for
February came in at 90.6, which was better than the 87.8 that analysts expected.
This number supported the case Greenspan made this week that the economy might
not be as bad off as we had thought.Â
“With yesterday’s intraday low of 2070.03, Nasdaq got
pretty close to our downside target of 2050. Some said that’s close enough for
government work and so ‘you’ve got to buy them here because your target was
essentially hit,’ said John Roque, Vice President, Arnhold and
S. Bleichroeder.
“Hold on a second – You mean you go from bearish to bullish on
a dime? In this environment? Coming close to or hitting a target doesn’t
necessarily mean that item (in this case the Nasdaq) reverses quickly. We see a
period of sideways action which will involve a retest. That’s where we’ll feel
more comfortable picking stocks,” he added.
Top sectors were oil services
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up 2.5%, and semiconductors
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Weakest sectors were Japanese stocks
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technology
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Oracle
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the company became the latest warnings casualty.
Getting whacked in software were PeopleSoft
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Systems
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One bright spot for tech was the fact that the semis finished positive. Among
winners was Texas Instruments
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Dow winners were International Paper
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up 1.2%, and SBC Communications
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Dow stock as it fell 4.5%.
Looking ahead, the fourth quarter productivity report will be released
Tuesday at 8:30 AM ET. The figure for the previous quarter was 2.4%.