Nasdaq tumbled….


Experienced member
Dow Jones 10662 -250
Nasdaq 2407 -159
S&P 500 1298 -35

A new round of companies warning that they will miss their quarterly financial targets caused profit worries helped by profit taking to overcome the Wednesday euphoria and tumbled the Nasdaq down -159, over -6%, to 2,407…

Right now these concerns are outweighing the Fed’s rate cut” said Peter Boockvar, a stock strategist at Miller, Tabak & Co….

Although Boockvar said he believes it’ll take more than Wednesday’s rate cut to end this bear market, he still thinks the major averages put in a short-term bottom during Tuesday’s sell-off…

Joe Liro, equity strategist at Stone & McCarthy Research Associates said, “There’s a lot of bad out there in front of us. But there’s also a lot of good news to [look forward to] down the road. Right now we’re choosing to focus on the negatives – and there will be plenty of negatives [to chew on] this month…the tsunami of warnings continues and the earnings outlook has deteriorated rapidly over the past months…It’ll be six to seven months before we see an acceleration in earnings growth.”

Over 12 companies issued revenue warnings causing great concerns as we’ve only got days before thousands of them start posting actual results for the last three months of 2000…among those issued warnings were clothing and book retailers, an airline and a medical device maker….

On the Nasdaq, serious losses were in the Internet, networking and software sectors….Cisco Systems and Sun Microsystems are 2 of those tumbling after rallying earlier this week…

"We've had tremendous moves … and after you have explosive moves, it's not unusual for markets to pull back on profit taking," said Bernadette Murphy, market analyst at Kimelman & Baird…

The labour market showed no surprise weakness last month, according to a government report. Only investors didn’t like this, becuase they were hoping a big hiring slowdown would lead to a large interest rate cut…

Non-farm payrolls rose 105,000 against the expected 119,000 increase while the unemployment rate remained unchanged at 4.0% compared to the expected 4.1% reading. And closely-watched average hourly earnings rose 0.4%, more than the expected 0.3% rise. …

Joel Naroff, chief U.S. economist at Naroff Economic Advisors said that the payrolls report was modest but, “does not point to any profound weakness in the economy. This expansion has weathered significant softness in the manufacturing sector before and there is no reason to believe it cannot now. Friday’s report seems to point to a relatively soft landing…”

It looks like investors will be examining every piece of economic news in detail to try and see whether another rate cut will be decided in the next Fed meeting on Jan. 30-31..won’t we be?

Analysts remain uncertain how stocks will fare before earnings show signs of strengthening and whether further rate cuts are in the offing…

Though many expect another rate cut at the Fed's end-of-the-month meeting, but the size of the cut will depend on the Fed seeing further signs of a slowdown.

It looks like December retail-sales data, due next Friday, and industrial-production numbers, due Jan. 17, may increase hopes the Fed will step in with another big rate cut…

Bill Barker, investment strategist and consultant at Dain Rauscher said, "You have a tug of war between lower interest rates, which is good for the market, and earnings disappointments."

Exactly right, a tug of war…so where do we stand in this tug of war? If you’re not a daytraider, swing trader, etc..stay away till things settle down I’d say…as I said in a previous Nasdaq post of mine, bounces up/down for the time being…

Have a nice week end everyone…


(quotations from WSJ, CNNfn, CBS)
thumb up by mistke


[This message has been edited by rizgar (edited 05-01-2001).]