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Nasdaq rises from sickbed
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September 13, 2000: 5:22 p.m. ET
After tough start to September, techs show life, but blue chips suffer
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - The Nasdaq composite index rose for the first time in four sessions Wednesday as bargain-hunting investors returned to many of the hardest-hit technology stocks, betting recent losses were overdone.
Cisco Systems, Oracle and Sun Microsystems, whose recent tumbles sent the Nasdaq to its lowest levels since mid-August, all rose.
 But a slide in Intel limited the gains, and also helped send the Dow Jones industrial average lower. Financials stocks fell after Chase Manhattan said it is buying J.P. Morgan for $33 billion even as the deal sparked hope for more buyouts in the fast-consolidating industry. Meanwhile, a set of corporate profit warnings weighed on a market that swung between gains and losses for most of the session.
"There are a lot of cross-currents going on in the markets," Stephen Frank, specialist with Walter N. Frank, told CNN's Street Sweep.
The Nasdaq, September's worst performing major U.S. index, rose 44.38 points, or more than 1 percent, to 3,893.89. The index, which tumbled by as much as 55 points Wednesday, is down 4.3 percent on the year. The Dow lost 51.05 to 11,182.18 and the S&P rose 2.92 to 1,484.91.
Market breadth was mixed. On the New York Stock Exchange, declining issues topped advancing ones 1,466 to 1,375, on trading volume of 1 billion shares. But Nasdaq winners edged out losers 1,987 to 1,982, as more than 1.6 billion shares changed hands.
In other markets, Treasury securities rose. The dollar gained against the euro and yen.
Techs a mixed bag
Technology stocks, which surged in August but fell in recent days, drew buyers Wednesday. Cisco Systems (CSCO: Research, Estimates) gained $2.44 to $61.31, Sun Microsystems (SUNW: Research, Estimates) rose $3.88 to $118.19 and Oracle (ORCL: Research, Estimates) climbed $2.44 to $81.81.
 But Intel tumbled $3.31 to $61.63 after Bank of America downgraded Intel stock to "market perform" from "strong buy."
Last week, an Intel downgrade by U.S. Bancorp Piper Jaffray helped spark the Nasdaq's early September slide.
Several NYSE tech stocks have also been falling. Among them, Dow member Hewlett-Packard (HWP: Research, Estimates) tumbled for a third day, sliding $6 to $105. The computer and printer maker began falling Monday after Goldman Sachs lowered HP's earnings estimates. On the same day, HP confirmed that it is in talks to buy the consulting arm of PriceWaterhouseCoopers for about $18 billion.
In actual buyouts, Chase Manhattan Corp. (CMB: Research, Estimates) said it is acquiring J.P. Morgan & Co. (JPM: Research, Estimates) for about $33 billion. The deal brings an end to merger speculation that has sent shares of Morgan surging in recent weeks. Based on its after-hours close, Morgan fell $4 to $181.50 -- but that's up from Tuesday's regular close of $177.75. Chase shed $2.13 to $50.69.
 Shares of Lehman Brothers (LEH: Research, Estimates) and Bear Stearns (BSC: Research, Estimates), also seen as takeover candidates in the ever-consolidating industry, fell along with other financial stocks. Lehman lost $8.50 to $150 and Bear Stearns slipped $2.56 to $69.06.
David Elias, chief investment officer of Elias Asset Management, told CNNfn's Market Call declines in financial stocks make sense given their gains in anticipation of a deal. (360K WAV) (360K AIFF)
Still, one financial stock surged Wednesday. Knight/Trimark Group Inc. (NITE: Research, Estimates) jumped $6.63 to $36.06 on speculation it may be the next market maker to be grabbed up by an investment bank.
More news from CNNfn.com for investors:
· Janus shut to newcomers
· Bank buyout buzz goes on
· Good funds for college
What price for a soft landing?
Fears of profit slowdowns have plagued Wall Street recently. Wednesday was no exception.
In the latest disappointment, SCI Corp (SCI: Research, Estimates) said earnings for the fiscal first quarter will be below expectations due to weakness in consumer electronics and personal computers. Shares of the electronics component maker lost $10.38 to $45.56
And Watson Pharmaceuticals (WPI: Research, Estimates) warned late Tuesday that the company expects to report third-quarter earnings of 12 cents-to-14 cents per share -- well below the consensus estimate of 48 cents a share. Watson stock tumbled $13.38 to $51.75.
As companies get an early peek at financial results for the June-September period in the days ahead, analysts expect more such profit shortfall announcements. With interest rates at their highest levels in nearly a decade, companies and consumers face steeper borrowing costs. The weak euro, meanwhile, leaves firms doing business in Europe with lower profits once overseas results are converted to dollars. And a surge in oil prices means a broad increase in heating, electric and transportation costs.
Jeff Davis, chief investment strategist at State Street Global Advisors, told CNNfn's market coverage that recent high oil prices may be taking a toll on investors. (299K WAV) (299K AIFF)
 Looking ahead, the market faces the week's first set of important economic data Thursday. Figures on August retail sales and producer prices are expected to show only slight gains. Modest advances would support the view that the economy, in a record expansion, is cooling under the weight of higher interest rates. Many economists now expect the central bank to leave interest rate alone for the rest of the year. 
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