Nasdaq Bows to Tech Sell-Off as the Broad Market Gains
The Nasdaq composite couldn’t make it two in a row, as Monday’s rebound in tech stocks gave way to renewed selling Tuesday.
But trading volume dried up--a good sign in any sell-off, market technicians say.
Nasdaq slid 81.47 points, or 2.2%, to 3,685.52, after gaining 103.99 points Monday.
The Dow industrials, by contrast, rose 84.97 points, or 0.8%, to 10,606.95 on Tuesday after inching up just 10.81 points Monday.
In the broad market, winners topped losers by 16 to 12 on the New York Stock Exchange, as investors sought lower-risk stocks--in particular, real estate investment trusts and electric utilities.
On Nasdaq, however, losers outnumbered winners by 23 to 17. But trading volume slid to 1.3 billion shares, suggesting relatively modest selling pressure.
Traders “go with the trend, and the trend has been down” on Nasdaq, said David Briggs, head of equity trading at Federated Investors Inc., which manages $20 billion in stocks in Pittsburgh. “I don’t see what sustainable event is going to turn things around.”
Investors should have found comfort in three economic reports released Tuesday: All eased inflation worries and fears the Federal Reserve will raise interest rates when its policymaking Open Market Committee meets Aug. 22.
Treasury bond yields fell across the board Tuesday. The 10-year T-note dipped to 6.05% from 6.10% on Monday.
That helped interest-rate-sensitive stocks, including banks and electric utilities.
Utilities also might have gotten a lift as buyers sought lower-risk stocks that generate dependable dividend income. The Dow utilities index rose 2.5% to a record 333.50.
Real estate investment trust stocks also continued to gain. The stocks have been on a hot streak in recent months as some investors have turned more conservative.
Among Tuesday’s highlights:
* Tech stocks losing ground included Intel, down $2.13 to $64.63; Sun Microsystems, down $2.13 to $103.31; Oracle, down $2.06 to $73.13; Inktomi, down $8.69 to $98.31; and Advanced Micro Devices, down $4.25 to $67.75.
Internet music pioneer MP3.com fell $1.31 to $8.56, its lowest since April.
But Computer Sciences rebounded $5.94 to $67.81 after reporting earnings Monday.
The biotech sector also rebounded, led by such shares as Amgen, up $4.06 to $69, and Human Genome Sciences, up $8.81 to $129.63.
* Drug and HMO stocks rose. Pfizer gained $2.38 to $45.75, Lilly rose $3 to $106.88 and UnitedHealth soared $4.19 to $86.
* Among utilities, winners included Duke Energy, up $1.63 to $63.31, and Peco Energy, up $1.13 to $43.81.
* Stocks leading the Dow higher included Walt Disney, up 94 cents to $39.50, and Coca-Cola, up $1.69 to $63--its highest price since January.
* Among Southland issues, sunglasses maker Oakley soared $2.50 to $17 after saying its footwear line will be in 150 Foot Locker stores by year’s end.
Market Roundup: C10, C12
