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Markets treading water at 9000 mark { August 6 2003 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A33759-2000Jun21.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A33759-2000Jun21.html
Markets Treading Water at 9,000 Mark
By Jerry Knight
Washington Post Staff Writer
Wednesday, August 6, 2003; 5:27 PM
After falling out of bed yesterday, Wall Street went back to sleep in its rocking chair today.
Like the song says, "this old rockin' chair ain't goin' nowhere" and that certainly describes the Dow Jones industrial average and the Standard & Poor's 500 stock index, which haven't gone anywhere since early June.
For the past two months, the Dow has been rocking back and forth between 9,000 and 9,300, its oscillations largely unrelated to either economic or corporate events.
The Standard & Poor's 500 stock index is right there on the porch beside the Dow. Up toward 1,010 one day, down toward 970 the next. When the S&P dropped through that lower boundary yesterday, it triggered worries that the indexes might fall out of their pattern, but today's market snoozed again.
Today, the Dow gained 25 points to 9,061.74. The S&P 500 was up less than 2 points to 967.08.
The Nasdaq Stock Market composite index, however, did not have such a restful day, falling for the fourth session in a row. Today's loss of 21 points to 1,652.68 left the hyperkinetic Nasdaq down almost 80 points in the past four days.
The Dow and S&P rocked right through the summer earnings season, which gave investors a picnic spread of new facts to feast on. The season is pretty much over, and stocks are right where they were before it began.
The Nasdaq Stock Market composite index, however, seems to have been jolted awake by disappointing performances by a number of prominent technology companies whose stocks had strong runs earlier in the summer.
Today the wake up call came from Cisco Systems Inc., whose stock gained nearly 50 percent in the spring rally. Cisco was the leading tech loser today after the Internet hardware maker posted disappointing quarterly profits and issued an iffy forecast.
The four recent losses have pushed the Nasdaq composite back to where it was a month ago--which is about where the Dow and S&P stand.
Rapidly rising interest rates get most of the blame on Wall Street for holding stocks in their present range. Rates, however, only started going up about five weeks ago. The increase correlates closely with the Nasdaq's nap, but in fact Nasdaq stocks are less influenced by interest rates than those in the Dow and S&P. The bigger companies in those indexes do more borrowing, so rates make a difference to their performance. And investors who move money back and forth from bonds to stocks in response to interest rate changes tend to move in and out of blue chips, not Nasdaq stocks.
Something else has to be keeping Wall Street in the rocker.
Worries about world events -- dominated by Iraq -- and the domestic economy -- dominated by consumer spending -- head the list of possibilities.
Wall Street also worries about itself and whether some unknown event might spook traders into a serious sell off. It looked like yesterday might be it, but today's recovery seemed to assuage that concern.
Maybe Wall Street just needs a rest.
Whatever is on investors minds, it kept them in their comfortable seats today.
© 2003 The Washington Post Company
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