Techs Pause, Sending Nasdaq Lower

Techs pause, sending Nasdaq

But Dow benefits from gains in cyclicals

By Julie Rannazzisi,
Last Update: 10:18 AM ET Apr
16, 2001

NEW YORK (CBS.MW) – After last week’s smashing price action, tech
stocks took a break and the Nasdaq headed lower Monday, interrupting a
four-day winning streak.

The Dow Industrials squeaked out a gain, aided by increases in its
cyclical and drug components. But a 7.3-percent drop in shares of Intel
capped the blue-chip barometer’s upside.

Chip and networking issues paced the downside move in technology. In
the overall market, drug, oil service, utility, natural gas, chemical
and paper issues climbed while gold and brokerage stocks fumbled.

The Dow Jones Industrial Average ($DJ) ascended 41 points, or 0.4
percent, to 10,167.

Spearheading the Dow’s gains were shares of DuPont, Eastman Kodak,
Exxon Mobil, 3M and Johnson & Johnson. Leading on the downside were
shares of Intel, Hewlett-Packard, Honeywell, and Microsoft.

Just over half of the 30 Dow companies will report their results by
the end of the week. First Call/Thomson Financial said the
year-over-year decline in earnings for the 11 percent of S&P 500
companies that have reported so far is 8.7 percent — which the earnings
compiler said is also likely to be close to the final number.

The Nasdaq Composite ($COMPQ) erased 42 points, or 2.2 percent, to
1,918 while the Nasdaq 100 Index ($NDX) gave up 45 points, or 2.7
percent, to 1,668.

Among the Nasdaq’s tech losers: JDS Uniphase, off 6.3 percent, Intel,
off 7 percent, Cisco Systems, down 4.8 percent, and Dell Computer, off 3

The Standard & Poor’s 500 Index ($SPX) lost 0.1 percent while the
Russell 2000 Index ($RUT) of small-capitalization stocks fell 0.8

Volume came in at 145 million on the NYSE and at 261 million on the
Nasdaq Stock Market. Market breadth was negative, with decliners
outnumbering advancers by 13 to 12 on the NYSE and by 19 to 11 on the

Elsewhere, Trim Tabs reported that U.S. equity funds saw inflows of
$3.7 billion in the two days ending April 11 for a monthly rate of $37
billion. Inflows to all equity funds, at $5 billion, was the highest
since the $6.3 billion in inflows that funds saw in the period ending
March 8, the fund flow tracker said.

Sector movers

Networking issues were among the biggest downside movers in the tech
space. Juniper Networks (JNPR), a high-flyer last week as the Nasdaq
rallied, fell 7.6 percent, to $46.62 Monday. Morgan Stanley Dean Witter
lowered its view on the stock to a "neutral" from
"outperform." The company posted Thursday earnings-per-share
that matched the consensus estimate for the first quarter but informed
investors that it wouldn’t meet earlier sales and earnings projections
for fiscal 2001.

In the meantime, bank and brokerage stocks retreated as investors
pondered a string of earnings releases in what will be a busy week for
the group. The sector also got some merger news. In recent action, the
Amex Securities Broker/Dealer Index ($XBD) shed 2.3 percent while the
Phlx/KBW Bank Index ($BKX) was off 0.9 percent.

Dow stock Citigroup (C) registered a first-quarter profit from
operations of 71 cents per share, beating the Wall Street consensus
estimate by a penny. Shares shed 0.6 percent to $47.

Bank of New York (BK) posted first-quarter earnings of 52 cents a
share, matching the First Call/Thomson Financial estimate. The company
also said it believes 12 to 14 percent EPS growth remains compatible
with the current economic environment, absent a further slowdown in
global markets. The stock slipped 1.7 percent.

And Bank of America (BAC) posted first-quarter earnings of $1.15 a
share, beating the Wall Street consensus estimate by three cents. Shares
rose 0.71 percent.

On the merger front, First Union (FTU) announced Monday it’s buying
rival North Carolina bank Wachovia (WB) in a stock deal valued at
approximately $13 billion. First Union will offer about two of its
shares for each share of Wachovia, which values Wachovia at around
$63.84 a share. First Union fell 5.9 percent while Wachovia edged up 1.4

Treasury focus

In the Treasury arena, prices were a smidgen lower. The 10-year
Treasury note was off 5/32 to yield ($TNX) 5.185 percent while the
30-year government bond shed 3/32 to yield ($TYX) 5.61 percent.

No economic news is due out for Monday. The highlights on this week’s
calendar include: the March consumer price index, March housing starts
and building permits, March industrial production and capacity
utilization, the trade balance for February, March leading economic
indicators and the April Philly Fed index. View Economic Preview and
economic calendar and forecasts.

In the currency arena, dollar/yen gained 0.5 percent to 124.69 while
euro/dollar edged down 0.3 percent to 0.8854.

Julie Rannazzisi is markets editor for in New York.

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