NEWS AND COMMENTARY
June 6, 2000
Blue Chips Off; Nasdaq Tries to Hold Gain
Market Fizzles Once Again...Weiss comments
NEW YORK - Blue-chip stocks rolled back in early morning trading on Tuesday, led lower by financial shares as investors latched onto company-specific announcements.
Wall Street was also focused on economic data due later in the week, along with second-tier figures expected Tuesday morning, traders said.
In early action, the Dow Jones industrial average (.DJI) fell 81 points, or 0.75 percent, to 10,734. The gauge was hit by fractional losses nearly across the board and a 3-point slide in J.P. Morgan (JPM.N), offsetting strength in Microsoft Corp.
The Nasdaq composite (.IXIC) dipped in and out of negative ground, lastly up 10 points, or 0.27 percent, to 3,832. Computer-chip and Internet stocks were weak as biotechs and some software names gained ground.
Broader measures of the market wavered. The Standard & Poor's 500 index (.SPX) fell 6 points, or 0.42 percent, to 1,461 with the small-cap Russell 2000 (.RUT) rising 2 points, or 0.39 percent, to 515.
"Little is transpiring in financial markets as they digest last week's gains," said Steven Nagourney for Cantor Fitzgerald. "If you had to put your finger on one major company announcement that could positively shake things up, well, it would be Lucent Technologies."
Lucent Technologies (LU.N) was one of the most active stocks on the New York Stock Exchange, slipping 1 to 63-3/8 after the company said it planned to announce three multimillion-dollar contracts in Malaysia in the next few weeks.
Lucent also said it signed a technology partnership with China Unicom, making it the preferred vendor for the Chinese telecommunications company.
Trading was shaped largely by corporate announcements, with Electronics for Imaging (EFII.O), a color printing technology developer, dropping 11-5/16 to 23-5/8 on a profit warning issued Monday night.
Merrill Lynch (MER.N) fell 1-5/8 to 105-7/8 after confirming that it would buy Nasdaq market maker Herzog Heine Geduld in a stock deal valued at about $913.8 million in hopes of increasing its online trade share.
Knight Trading (NITE.O), the world's biggest market maker in Nasdaq stocks, lost 1-11/16 to 29-1/4 amid a debate among analysts about how the Herzog deal would affect Knight.
Blinded by optimism, investors sunk more money into the stock market last week. But this week, the market is fizzling as investors come to realize that last week's news wasn't entirely rosy. As we've pointed out in the past few days' commentary, the bull market has lost its luster.
No longer is any positive news enough to boost the entire market. Investors must muddle through, clinging to individual company news and attempting to pick the right stocks. This is usually a sign that the market has bottomed out. But, more likely, it is resting on a ledge before it falls even further.