Nasdag hammered again...


Experienced member
Another red and downhill day for Nasdaq (2755 -116)..looks like a bounce is not expected before early next week that is "if Bush emerges from the election mess as the victor" and unlike many of us the sidelined cash is waiting to see concrete evidence of the bottom...with weakening US economy and earnings growth outlook..I doubt if the bounce will turn into a rally...maybe the best would be making the best use of the bounce (if any) and getting on the sidelines and waiting for concrete evidence of a rally...whatever good luck and have a look at what CBS Market Watch says:

NEW YORK (CBS.MW) - Stifled by mounting worries that a softer economy will take a larger-than-expected bite out of corporate profits, tech stocks got slammed Wednesday, sending the Nasdaq to its lowest close since October 19, 1999.

"Tech stocks are falling just as fast as they were rising late last year and early this year. It's hard to find a positive catalyst," said Joe Liro, equity strategist at Stone & McCarthy Research Associates.

Richard Dickson, senior technical analyst at Scott & Stringfellow, said the tech sector continues to struggle with valuation problems -- even with the Nasdaq hovering at 13-months lows.

Stocks enjoyed a short-term lift around midday following a decision by the Miami-Dade County Canvassing Board to halt all hand recounts, which was regarded as a big victory for Republican candidate George W. Bush. The Gore camp said it would attempt to reverse the decision.

The election impasse has kept a lock on the market over the past couple of weeks, aggravating price swings and further damaging investor psychology. The Nasdaq has fallen roughly 19 percent since the Nov. 7 election.

"The current election debacle is forcing the investor's hand," remarked Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray.

A sea of red enveloped the tech sector Wednesday, with Internet and computer software stocks witnessing the heaviest hemorrhaging. In the overall market, oil service, financial and transportation shares took the biggest lumps and only gold stocks ended in the black.

The Dow Jones Industrials Average ($DJ: news, msgs) fell 95.18 points, or 0.9 percent, to 10,399.32.

The biggest losses were seen in shares of Philip Morris, Citigroup, J.P. Morgan, Boeing, General Electric, Home Depot and Intel. Countering the fall was a 7.8 percent jump in shares of Coca-Cola (KO: news, msgs) after the beverage giant pulled its offer to buy Quaker Oats. Read the full story.

The Nasdaq Composite ($COMPQ: news, msgs) fell for the fifth straight session, dropping 116.11 points, or 4.0 percent, to 2,755.34 while the Nasdaq 100 Index slid 118.28 points, or 4.3 percent, to 2,668.25.

A weakening economy and earnings growth outlook, combined with a lack of clarity on the election front, is too much for the market to handle at one time, Belski commented.

"This is causing emotional and reactive trading activity, with fewer and fewer stocks immune to action everyday. We have to believe that once the market becomes more rational, it will once again reward those companies that [will] perform fundamentally over the long term," he concluded.

Liro believes the market may enjoy a "technical bounce" from oversold conditions early next week, particularly if Bush emerges from the election mess as the victor. "But rallies will be sold into," he said.

Sidelined cash is content to stay sidelined, Liro added. "You need to see evidence of a bottom before cash positions can be mobilized."

The Standard & Poor's 500 Index ($SPX: news, msgs) dropped 1.9 percent while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks lost 1.9 percent.

Volume was respectable at 965 million on the NYSE and at 1.88 billion on the Nasdaq Stock Market. Market breadth was negative, with decliners clobbering advancers by 18 to 9 on the NYSE and by 29 to 11 on the Nasdaq. A whopping 733 stocks reached fresh 52-week lows on the Nasdaq while only 10 set new highs.

Specific movers

Software stocks took a dive, with Novell (NOVL: news, msgs), off 19.3 percent to $6, leading the charge. The Goldman Sachs Software Index ($GSO: news, msgs) tumbled 7.3 percent. Novell reported after the close Tuesday break-even results on a per-share basis, in line with the First Call estimate. But Novell said 2000 was a difficult year due to declines in packaged software sales. Goldman Sachs cut the stock to a "market perform" from a "market outperform."

And Portal Software (PRSF: news, msgs) plunged 60 percent to $7.50. The company posted better-than-expected results after the close Tuesday but investors fixated on its uninspiring revenue growth. CS First Boston noted that license revenue and gross margins were both below expectations. And Goldman removed the stock from its "U.S. recommended list" to a "market outperformer." Banc of America Securities and Robertson Stephens also slapped the stock with downgrades.

Internet stocks extended declines for a sixth session, with the Goldman Sachs Internet Index ($GIN: news, msgs) down 30 percent in the same period. Yahoo (YHOO: news, msgs) extended losses, falling $3.50 to $38.19, with investors increasingly concerned about the Net bellwether's revenue growth prospects amid a difficult online advertising environment. Thomas Weisel Partners lowered its rating on the stock to a "buy" from a "strong buy." But some Net stocks saw an abrupt turnaround around midday, with EBay up 4.2 percent and Amazon rising 3.9 percent as the two e-tailers prepared for the holiday shopping season.

Within the Net group, business-to-business stocks also took it on the chin, with Merrill Lynch's B2B Holdrs (BHH: news, msgs) off 7.8 percent. The heaviest hemorrhaging was seen in shares of PurchasePro, off 18.8 percent, and Scient, down 20.1 percent.

Lucent Technologies (LU: news, msgs), a stock that got clobbered Tuesday, ended with a 13-cent gain to $17.69 following a 16 percent drop Tuesday after revealing that problems with certain sales would cut into earnings-per-share for the quarter and the year.

Nortel Networks (NT: news, msgs) held its analyst meeting on Tuesday, reaffirming its earnings-per-share guidance ahead of the gathering. CS First Boston said it viewed the meeting as a positive at the margin given recent concerns surrounding near-term top-line visibility. CS views Nortel shares as attractive trading at 38 times their 2001 EPS estimates. Shares lost 63 cents to $37.56, erasing earlier gains.

The Philly Semiconductor Index ($SOX: news, msgs) witnessed see-saw action throughout the trading day, edging down 1.7 percent and extending its losing streak to five days. Initially buttressing the group was a report from the Semiconductor Equipment and Materials International that North American-based chip gear orders reached $3 billion in October. Bellwether Intel slumped 3.4 percent to $41.19.

Treasury action

Treasurys rose heartily as stocks headed south. The bond market observed an early 2 p.m. close Wednesday ahead of the Thanksgiving holiday.

The 10-year Treasury note put on 1/4 to yield ($TNX: news, msgs) 5.625 percent while the 30-year government bond jumped 29/32 to yield ($TYX: news, msgs) 5.67 percent. .

Weekly jobless claims, the only piece of economic news on Wednesday's agenda, rose 7,000 to 336,000. View Economic Preview, economic calendar and forecasts and historical economic data.

In the currency arena, dollar/yen added 0.1 percent to 110.18 and euro/dollar was up 0.1 percent at 0.8440.