Tape Turns Red
The Nasdaq five-day winning streak snapped Thursday as profit-taking hit some
of the recent high flyers like biotechs and semiconductors, helping drive the
Nasdaq down 3.1%. The broader market faced selling pressure as well, with nearly
every sector trading lower. By the close, the Dow had shed 1.1%, and the S&P
500 had eased 1.8%.
Yet more economic signs of a subdued economy failed to impress stocks. New
jobless claims increased by 5000 to 302,000 for the week, which was a greater
increase than analysts expected. The figure moves the 4-week moving average of
jobless claims up to 300,500, its highest level since July, 1999.
What was constructive was that volume levels were only slightly higher than
Wednesday’s levels, with 1.61 billion shares changing hands on the Nasdaq and a
little over a billion shares trading on the NYSE.
Several traders commented that a pullback in the market was expected after
the recent days’ run-up, and the market now has some room for a relief rally in
the wake of Tuesday’s upcoming Fed meeting.
“I think as we meander toward the Fed meeting,
I think we’ll see the market rally somewhat with the anticipation of nothing
being done,” said Jay Suskind, Director of Trading, Ryan,
Beck & Co.
“What keeps the market from really rallying is the perception that
the Fed will still keep their foot lightly covered on the brake. As far as
today, there’s some pullbacks and profit-taking, but no real leadership out
there today,” he added.
According to preliminary numbers, the Dow lost 121.62 to 10,376.12, the
Nasdaq fell 127.06 to 3936.95, and the S&P 500 slid 26.85 to 1452.28.
Banks
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chemicals
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Weak sectors included Internets
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$GIN.X |
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down 4.0%, and biotechnology
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Among large-cap standouts that avoided the day’s damage were Qualcomm
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up 3 3/4 to 68 1/4 and Rambus
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Earnings movers included e-commerce software developer Tibco
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which rose 5 7/8 to 88 7/8 after announcing earnings of 4 cents per share while
estimates had looked for a 5 cent per share loss.
Among the dogs dragging the Dow lower were Intel
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General Motors
(
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(
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Honeywell
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PowerRating), down 5.4%. Honewell’s woes continue following its recent
earnings warning. The stock is off sharply from its 50 7/8 close from just one
week ago.
Dow winners included Coca-Cola
(
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(
T |
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SBC Communications
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PowerRating), up 2.0%.
Looking ahead, the next economic news out before the Fed meets on Tuesday is
the report for May’s existing home sales which will be released on Monday at
10:00 AM ET.
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