What Caused Today’s Follow Through
Share prices on the Nasdaq and NYSE continue to
fall lower today as investors sell stocks because of concerns about the health
of the U.S. economy.
In late-morning trading, the Dow Jones Industrial
Average is down 50 points to 9937, after losing 80.33 Friday. The Nasdaq
Composite index has dropped 28 points to 1994.40 after declining 24.78 in the
previous session. The Nasdaq is now down below the 2,000 level.
Monday’s selling appears to have carry over from Friday’s session, when stocks
fell following some cautious comments about the economy from Federal Reserve
Chairman Alan Greenspan. In his first speech on the subject in months, Mr.
Greenspan told an audience in San Francisco that the economy is beginning to
show signs of a recovery, but it is too early to tell.
The S&P 500 is falling to
its fifth decline in six days as investors speculate the outlook for corporate
profits doesn’t justify the gains over the past four months.
The Dow
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$INDU |
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PowerRating) is
trading at 9918.33 down 69.55. The Nasdaq
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$COMPQ |
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at 1986.64, and the S&P 500
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$SPX |
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Nextel Communications
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NXTL |
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and other mobile phone companies are dropping after Lehman Brothers said
cellular service subscriber growth remains weak and recommended selling Nextel
shares. AT&T Wireless
(
AWE |
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PowerRating), Sprint PCS
(
PCS |
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Wireless
(
WWCA |
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PowerRating) are also declining on the news.
Tyco International
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TYC |
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is higher today after a Merrill Lynch analyst said in a note to clients that the
manufacturing company’s 15% drop so far this year isn’t warranted given its
healthy balance sheet and potential to benefit from an economic recovery in
coming months. Tyco is trading higher by 2.16 to 52.41.
Micron Technology
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MU |
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PowerRating)
is higher today. Korea’s Hynix Semiconductor, which Micron is trying to acquire,
may write off up to 30% of its $6.6 billion in debt.
Goldman analyst Thomas Berquist said he expects Internet software maker Ariba
(
ARBA |
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PowerRating) to beat expectations when it reports results Jan. 22. He raised
his rating to "market outperformer” from "market perform.”
Dow Chemical
(
DOW |
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PowerRating) has
traded as low as $25.95. The chemical maker was downgraded to "hold” from
"strong buy” by UBS Warburg.
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