Nasdaq Is Dinged Again, but Dow Sails On
Nasdaq was slammed again Wednesday amid growing worries about semiconductor firms. But the Dow industrials gained as investors shopped in non-tech sectors.
The Nasdaq composite index slumped 129.84 points, or 3.1%, to 4,013.34, bringing its two-day decline to 5.2%.
The Dow, however, added 50.03 points, or 0.4%, to 11,310.64, its highest level since Jan. 20.
In the broad market, winners topped losers by 4 to 3 on the New York Stock Exchange, though most major market indexes still lost ground. The NYSE composite index eased 0.3%.
Despite Nasdaq’s slide, breadth was not overwhelmingly negative: 17 stocks rose for every 23 that fell. Trading was active.
Major chip stocks led Nasdaq lower in the wake of analysts’ downgrades of key chip companies on projections of weaker-than-expected personal computer sales in the near term.
“I think those downgrades are concerning people about third-quarter earnings,” said Barry Berman, managing director of equity trading for Robert W. Baird & Co. in Milwaukee.
Some investors also may have been spooked by the continuing surge in energy prices, which helped make for a nervous session in the bond market.
Even so, Treasury bond yields closed just modestly higher. The yield on the 10-year T-note ended at 5.73%, up from 5.69% Tuesday.
While many tech issues lost ground, investors continued to snap up energy, utility, financial, restaurant and industrial issues.
“People are saying, ‘We’ve made money in [technology] stocks and it makes sense to look for value somewhere else,’ ” said Matthew Brown, who helps oversee $26 billion at Wilmington Trust Corp. in Wilmington, Del.
Among Wednesday’s highlights:
* Major tech issues sliding included Intel, down $3.55 to $65.70; Sun Microsystems, down $7.44 to $117.63; Oracle, down $1.81 to $89.25; and Apple Computer, down $4 to $58.44.
* Telecom stocks also fell sharply, led by WorldCom, down $2.25 to $31.50, lowest since 1998. Corning tumbled $15.94 to $312.06. Nortel Networks lost $3.38 to $77.38.
* Financial stocks rallied, boosted by Citigroup’s bid for Associates First Capital. J.P. Morgan jumped $8.06 to $168, Bank One rose $1.75 to $36, Wachovia rose $1.06 to $57.25 and Bear Stearns added $2.38 to $70.81.
Also, Ameritrade Holding rose $2.19 to $20.81 and E-Trade added 31 cents to $18.38 after Credit Suisse First Boston analyst James Marks boosted the online brokerages to “buy” from “hold.”
* In the energy sector, Chevron surged $2.19 to $88.13, Transocean Sedco leaped $3.06 to $63.75 and El Paso Energy rose $1.94 to $60.50.
Utility companies, many of which have diversified into various energy services besides power generation, also advanced. Duke Energy gained $2.13 to $78.88, Edison International rose 88 cents to $22.50 and Reliant Energy rose 88 cents to $38.75.
* Investors also turned back to many industrial names, including Emerson Electric, up $1.69 to $69.63, and Boeing, up $2.38 to $57.81.
* Many drug and biotech stocks slid for a second day on concerns about future federal drug price policies. Amgen lost $4.44 to $68.06 and Eli Lilly fell $2.38 to $67.38.
* E-Toys rose $1.50 to $6.38. The retailer of children’s toys, video games and software said it is starting a Web site to offer child-care information and tips for parents of children ages 2 to 12.
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Market Roundup: C9-10
