Attention: The "Dow 10K" hats are still valid. The "Dow 10K" hats
are still valid.
But at several times during the session, the hats tossed around
last spring when the Dow first crossed 10,000 lost their meaning,
as the Dow Jones Industrial Average fell below 10,000. The
level is seen by many as a key psychological mark for the gauge.
After a turbulent day, in the end, the Dow ended sharply lower,
while the Nasdaq Composite Index managed to rally and close
at an all-time high.
Most times today, the Dow quickly managed to bounce back
above 10,000 once it breached the level. The exception was in the
afternoon, when the Dow spent about a half-hour under 10,000.
Beginning around 2:45 p.m. EST, the Dow rallied and rose well
above 10,000 but remained decidedly lower on the day.
The Dow shed 133.10, or 1.3%, to 10,092.63, after trading as low
as 9942.78 intraday. It's now down 13.9% from its Jan. 14 closing
high of 11,722.98. The Dow hasn't closed below 10,000 since April
6, 1999, when it settled at 9963.49.
American Express (AXP:NYSE) dragged the Dow down most
today, losing 5.9%. Meanwhile, one of the stocks helping in the
Dow's recovery this afternoon from the lows was General Electric
(GE:NYSE), which had been a big loser during the session. It
managed to rebound and closed up 1/2 to 131, having traded as
low as 126 1/16 intraday.
While a lot of attention went to the Dow, the Nasdaq Comp and
the Russell 2000 both managed to post a day in the plus column.
The S&P; 500 ended in the red.
The Nasdaq Comp rose 67.26, or 1.5%, to 4617.59.
Semiconductor stocks, which are having a stellar year so far,
provided some aid to the Comp's cause: The Philadelphia Stock
Exchange Semiconductor Index surged 5.6%. A bullish report
on the sector out of PaineWebber aided the group's cause. Also
helping out was a pop in shares of Intel (INTC:Nasdaq), a member
of the Comp, the S&P; 500 and the Dow. It rose almost 5% to 114
1/4, after Robertson Stephens analyst Daniel Niles raised his
earnings estimates and price target on the chip titan. He raised his
price target on Intel to 150 from 125. Intel was the biggest positive
influence on the Dow.
Elsewhere, the S&P; 500 fell 7.26, or 0.5%, to 1353.43. The
Russell 2000 rose 4.13, or 0.8%, to 554.04.
TheStreet.com Internet Sector index rallied 17.08, or 1.5%, to
1184.56. The DOT rose as high as the 1190.67 level, and fell as
low as 1140.97 intraday.
TheStreet.com New Tech 30 rose 15.29, or 2%, to 782.11. The
TSC New Tech 30, unveiled Jan. 5, is a market-cap-weighted index
focused on tracking the most scorching part of the market, the
magnet for Wall Street's hot money. A list of the index
components is available at http://www.thestreet.com/newtech/.
New Economy Trumping Old
Jay Suskind, head of institutional equity trading at Ryan Beck,
said the story again today was the so-called "new economy"
stocks doing well while the "old economy" stocks are suffering.
Suskind said the thinking lately has been that the old-economy
stocks are affected by interest rates and the economic cycle, for
example, while the new-economy stocks are immune to those
Dow 10,000 doesn't mean much from a technical standpoint,
Suskind said, but he added that it is important psychologically. "It
makes for splashy news headlines," he said.
Sector-wise, consumer, chemical, paper, oil producer and retail
stocks suffered a pounding. The Morgan Stanley Consumer
Index fell 2.1%. The S&P; Chemicals Index gave up 2.2%. The
Philadelphia Stock Exchange Forest & Paper Products Index
said goodbye to 2.6%.
Traders buried biotechnology stocks for a portion of the day before
the group rebounded. The Nasdaq Biotechnology Index rose
'A Huge Binge of Speculation'
Philip Roth, chief technical analyst at Morgan Stanley Dean
Witter, pointed out that the market is still in a "huge binge of
speculation." He added that those periods don't end pleasantly.
After 10,000, the Dow's next support is at 9000, Roth said. He
doesn't expect the overall market to broaden out in a sustained
move until the market's leaders -- technology, telecom and biotech
Roth pointed out that the oil service stocks were very strong today,
noting that they're "finally responding" to higher crude oil prices.
He said there's a lot more upside in the group. He thinks they
could rise 20% to 30% over the medium term.
Treasuries were mixed. The 10-year note was up 13/32 to 100
31/32, yielding 6.37%. The 30-year Treasury bond was down 8/32
to 101 14/32, putting its yield at 6.14%. (For more on the
fixed-income market, see today's Bond Focus.)
In New York Stock Exchange trading, 1.176 billion shares were
exchanged while declining stocks beat advancers 1,995 to 1,037.
In Nasdaq Stock Market action 1.942 billion shares traded while
losers defeated winners 2,307 to 1,849. New 52-week lows beat
new highs 344 to 48 on the NYSE while new highs beat new lows
272 to 151 in over-the-counter trading.
Among other indices, the Dow Jones Utility Average crumbled
7.99, or 2.7%, to 285.53; the Dow Jones Transportation
Average fell 39.98, or 1.7%, to 2380.30; while the American
Stock Exchange Composite Index rose fractionally to close at
SEC Welcomes New Exchange to the Fray
The Securities and Exchange Commission today approved the
International Securities Exchange's application to become a
The ISE is the first exchange to register with the commission
since the Chicago Board Options Exchange in 1973.
The ISE is a fully electronic exchange for trading options on U.S.
equity securities, combining screen-based trading with the
traditional "open-outcry" auction market. It will not have a physical
trading floor like other options exchanges. Ultimately, the ISE
intends to trade 600 of the most active options classes, but it will
trade just 30 at first.
ISE already has had a positive impact on the options market, the
SEC said in a statement. Since ISE filed its application with the
commission on Feb. 2, 1999, the U.S. options exchanges have
begun to multiply list the most active options classes, reducing
spreads by between 15% and 42%. Moreover, transaction fees on
the options exchanges have been reduced during the past year.
The ISE's planned launch of March 24 has been postponed until
The ISE becomes a self-regulatory organization. First, the ISE
intends to conduct its own surveillance of trading on its market.
In addition, the ISE intends to enter into regulatory allocation
agreements with NASD Regulation and with the other options
Under these allocation agreements, another SRO will take
responsibility for ensuring that firms that are members of both that
SRO and the ISE comply with common rules.
The ISE will contract on a payment for services basis with NASD
Regulation to perform certain regulatory functions that are not
covered by the above agreement. Although the ISE is now a
registered exchange, before it can begin trading it must become a
member of the Options Clearing Corp. and join the organization
responsible for consolidation and dissemination of options market
quotations -- OPRA.
The ISE will participate in the options market linkage along with
the nation's four other options exchanges. Also on Thursday, the
SEC published a notice requesting public comment on three
intermarket linkage plans filed by the options exchanges. The ISE
submitted a plan identical to that filed by the American Stock
Exchange and the CBOE.