Markets Quiet as Election Approaches
Stock investors, refraining from any major moves before Election Day, traded gingerly Friday, giving Wall Street a mixed and lackluster performance.
No sectors stood out in a session so unremarkable that the Dow Jones industrial average traded within a narrow 126-point range and the tech-focused Nasdaq composite index moved within an even tighter 80-point span--a stark contrast to the market’s recent volatility.
“The mood of the market seems to be somewhat trendless. We’re in a challenging climate in which it is tough to make money,” said Alan Ackerman, executive vice president at Fahnestock & Co. “Few players are putting money to work today ahead of the election on Tuesday.”
The Dow ended down 62.56 points, or 0.57%, at 10,817.95, up 227.33, or 2.1%, for the week. The Nasdaq rose 22.56 points, or 0.66%, to 3,451.58, up 173.22, or 5.3%, for the week.
The Standard & Poor’s 500 index was down 1.63 points, or 0.11%, at 1,426.69, closing out the week with a 47.11-point, or 3.4%, gain.
Declining issues outnumbered advancers by 13 to 11 on the New York Stock Exchange, where trading was active. On Nasdaq, where 1.8 billion shares changed hands, advancers outpaced decliners by a 20-18 ratio.
Investors who are still shaken after a spate of disappointing third-quarter earnings reports also are waiting for results expected next week from technology leaders Cisco Systems and Dell Computer before they “fine-tune what the next step in the market will be,” said Tom Galvin, chief equity strategist at Credit Suisse First Boston.
Nasdaq got a lift from chip maker Qualcomm, which jumped $7.69 to $70.50. The company said it will sell 14 million phone chips this quarter, up from 11 million in the previous period, as sales rebound in South Korea. That will help the company meet analysts’ profit forecasts for the quarter and fiscal 2001, it said.
Blue chips got a boost from two consumer brands. Quaker Oats soared 9% after rejecting a $14-billion takeover bid by PepsiCo. And Unilever, the Anglo-Dutch maker of such consumer products as Skippy peanut butter and Dove soap, gained $2.38 to $53.63 after reporting third-quarter earnings slightly ahead of expectations.
But retailing stocks took another beating a day after the industry reported disappointing sales results for October. The Dow’s retailing components fell, with Home Depot down $1.50 at $41.25 and Wal-Mart off $1.06 at $47.38 after lowering its holiday sales expectations Thursday.
The Dow’s financial firms saw mixed trading. J.P. Morgan lost $3.44 to close at $161.50, but American Express was up $2 at $59.63.
Some Nasdaq issues recovered from recent losses.
Cisco, a network equipment maker, gained $1 to $56.75. Software maker Oracle also advanced, rising 75 cents to $30.31. Oracle fell sharply Thursday amid rumors that Chief Executive Lawrence Ellison and Chief Financial Officer Jeffrey Henley planned to resign. The stock plunged as much as 13% before public denials from Ellison and Henley.
Sprint PCS tumbled $8.06, or 22%, to $28.50 after saying it won’t follow competitors AT&T; and WorldCom, which are spinning off their long-distance businesses into separate companies.
Wall Street was also uneasy about mixed economic news released earlier in the day, said Barry Hyman, chief investment strategist for Weatherly Securities.
The Labor Department reported the number of jobs created last month slowed to 137,000, easing some worries over inflation. But that news was offset by an uptick in wages, Hyman said.
“I’d call the employment numbers today a little bit of a negative picture,” Hyman said. “It’s wonderful to see the job growth slowing. At the same time, the 0.4% increase in hourly earnings, greater than expected, creates a concern that wage inflation might be creeping back into the system and that productivity might be slipping.”
Bond traders chose to look at the dark side of October’s employment report. The yield on the benchmark 10-year Treasury note, a key indicator of the direction of interest rates, rose to 5.82% on Friday, 0.1 percentage point higher than last Friday’s close and 0.08 percentage point above Thursday’s 5.74% yield close.
The jobs data threw into question the growing view, based on reports showing slower U.S. economic growth, that the Federal Reserve might soon cut rates.
“Despite a little dip in consumer confidence and the evidence that we are slowing in a number of sectors of the economy, we’re still growing pretty nicely,” said Mark Hemenetz, portfolio manager at Bank of New York Asset Management.
The Fed, which has raised rates six times from June 1999 through May of this year, next meets to set policy Nov. 15.
Market Roundup: C4
