MARKET REPORT
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Tech stocks slumped on a day that saw old-economy stocks bolt forward,
sending the Dow industrials higher by nearly 250 points.
The enthusiasm carried over to small cap stocks, pushing the bellwether
Russell 2000 Index up 2.88 points, or 0.6%, to 482.73. The S&P 600 gained
1.05, or 0.5%, to 208.57. The Wilshire Small Cap 1750 reversed it losses
and headed higher, surging 3.52, or 0.4%, to 805.84.
Blue chips advanced smartly, with the Dow industrials adding 245.15 or
2.3%, to 10835.77, while the broader S&P 500 gained 19.07 points, or 1.4%,
to 1398.65.
Tech issues fell on the back of Cisco Systems Inc. (NASDAQ: CSCO), which
shed 5.2% for the session, after Lehman Brothers cut its price target on
the computer networker to $60 a share from $90.
The Nasdaq Composite Index, of which Cisco is a major component, slipped
87.01, or 2.7%, to 3191.35, while the Philadelphia Semiconductor Index of
large cap stocks advanced 17.43, or 2.5%, to 703.03 in a choppy day of trading.
Cisco's woes rubbed off on small cap computer stocks, pushing issues such
as Universal Display Corp. (NASDAQ: PANL) and Aperian Inc. (NASDAQ: NYFX)
lower. Both fell 4.8% in midday trading.
Investors bought anything that wasn't technology, said Annette Geddes,
managing director, MD Sass Investors Services. She noted that selling of
tech stocks will probably continue through Tuesday the last day of
October as mutual-fund managers sell off losing stocks to balance their
portfolios.
"From a technical-analysis perspective there has been so much damage done
to tech stocks that until it is repaired, those investments are dead
money," Geddes said.
Financial stocks performed well, moving higher on data out of Washington
this morning, which further affirmed that the U.S. economy is in for a soft
landing, and consumers are still spending.
Still, other analysts pointed to a shift in investor psychology not the
usual suspects of earnings woes or tax-loss selling as a cause for the
sell-off in tech issues.
"The thrill represented by technology is gone," said Larry Wachtel, market
analyst for Prudential Securities Inc. "It is a more conservative market
that you're seeing here."
"If you look at the Dow, you see stocks such as Alcoa Inc. (NYSE: AA),
Caterpillar Inc. (NYSE: CAT), Home Depot Inc. (NYSE: HD) and International
Paper Inc. (NYSE: IP) tried and true blue chips that have no exotic look
to them but where the fundamentals are sustainable," Wachtel said.
Investors are turning "back-to-basics as represented by the cyclical
companies, the ten-multiples and the stuff that rusts in the sun," he added.
In economic news, the Commerce Department reported this morning that
personal income in September grew 1.1%, and consumer spending rose 0.8%.
Analysts had expected both figures to rise 0.6% for the month. The report
showed that despite a rise in energy prices and fears of inflation,
consumers are still bullish on the U.S. economy and are willing to spend.
In Canadian trading, the Toronto Stock Exchange continued to head lower
adding to last week's over 1,000-point loss. In Monday trading, the TSE
retreated 68.80, or 0.7%, to 9253.10.
The Canadian Venture Exchange reversed earlier gains and slipped 20.70
points, or 0.6%, to 3239.08. In the currency markets, the Canadian dollar
slipped 0.3% to US$0.6532 from US$0.6550, while the euro dimmed to US$0.8409.
In commodities news, December crude oil futures gained just a penny to
$32.75, after oil-producing countries agreed to increase oil production by
500,000 barrels a day.
December natural gas futures slumped 16 cents to $4.50, off 3.4%, while
December gold remained unchanged at $265.90.
NASDAQ / OTC
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Symbol Volume Close Change %Gain Company Name
AFBR 200 1.13 0.50 80.00 Asia Fiber Holdings Ltd.
INDX 33000 0.44 0.19 76.00 Indo-Pacific Energy Ltd.
CNXX 87700 3.38 1.25 58.82 Centraxx Inc.
EATC 124400 1.56 0.56 56.20 Eagletech Communications Inc.
NSTH 3500 0.88 0.31 55.69 Newstate Holdings Inc.
AMEX
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Symbol Volume Close Change %Gain Company Name
HNV 379600 0.56 0.25 79.87 Hanover Direct Inc.
GCR 671400 2.00 0.56 39.08 Gaylord Container Corporation
APT 84800 1.31 0.31 31.30 Starwood Financial Trust
AEN 86800 2.13 0.44 25.89 AMC Entertainment Inc.
AZC 212400 1.06 0.19 21.49 Azco Mining Inc.
NASDAQ / OTC
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Symbol Volume Close Change %Loss Company Name
GSTRF 23396400 2.38 -3.63 -60.42 Globalstar
Telecommunications
QLNX 406500 2.94 -3.63 -55.23 N/A
NTWO 315600 0.69 -0.37 -35.28 N2H2, Inc.
GNTI 125100 1.28 -0.69 -34.94 Gentia Software Plc
EEGL 390600 2.53 -1.25 -33.06 Eagle Supply Group Inc.
AMEX
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Symbol Volume Close Change %Loss Company Name
NMN 11200 1.19 -0.31 -20.80 Nematron Corporation
TTV 5000 3.75 -0.63 -14.29 Cabletel Communications
FRN 28800 2.19 -0.31 -12.48 Friendly Ice Cream Corp
AI 56900 1.38 -0.19 -12.03 American Telesource International
TEC 23800 1.44 -0.19 -11.51 Commercial Intertech Corp.
AI
