Lacking Luster
With what will undoubtedly be a closely-monitored earnings season set to
begin, stocks turned in a lackluster performance Monday, with the Nasdaq
slipping 1.0%, the S&P losing 0.2%, and the Dow eking out a small 0.1% gain.
Volume was typically light for a summer Monday, with 819 million shares trading
on the Nasdaq and 1.38 billion shares changing hands on the Nasdaq.
Analysts remain split on the prospects for stocks, with some feeling the Fed
rate hikes will do the job to cool the economy, while others have expressed
concerns that Greenspan and company’s actions may not only cool the economy, but
will also put big pressure on earnings.
"The slowing jobs data continues to impress Wall Street investors who
believe that this may help the Fed in not raising interest rates any further
than they are now. Conversely, the market is trying to gauge what a slowing
economy may do to corporate profits," said Alan Ackerman, Market
Strategist, Fahnestock & Co.
"So we seem to be in a phase in the market where we’ll be trading
sideways until analysts have a better chance to look at the actual stream of
corporate earnings coming out soon. Disappointing earnings are likely to be
devastating to individual issues," he added.
According to preliminary numbers, the Dow rose 11.21 to 10,647.29, the Nasdaq
lost 42.62 to 3980.58, and the S&P 500 eased 3.23 to 1475.67.
Top-performing sectors included forest and paper products
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2.3%, chemicals
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and broker/dealers
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On the downside were software
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The market gave optical networking giant JDS Uniphase
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shoulder following the company’s announced $41 billion offer to merge with SDL
Inc.
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to 320 11/16. The offer would exchange 3.8 JDSU shares for each share of SDLI in
what would be the biggest not-telco tech merger in history.
Broker/dealers were one of the day’s bright spots, with solid gains by Lehman
Brothers
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up 3%. Merrill Lynch
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126 3/16.
In the beleaguered Net space, several of the former Internet leaders
continued to get pounded. Just a day ahead of its second quarter earnings,
portal leader Yahoo!
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since April 24. Also weak in the Internets were Inktomi
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CMGI
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Alcoa
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better-than-expected earnings. Additional Dow winners were General Motors
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The Dow’s biggest losers were IBM
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Looking ahead, the next big round of economic news will be out on Friday when
the Industrial Production, Producer Price Index, and retail sales numbers will
all be released.