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Dow rallies again
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November 27, 2000: 4:44 p.m. ET
Blue chip rise led by drugs, financials; semiconductor cuts hurt Nasdaq
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - The Dow Jones industrial average rose for its second straight session after some presidential uncertainty was lifted, prompting investors to snap up stocks expected to do well under Republican leadership, such as financial and drug issues.
The latest development in the contest for the White House favored GOP candidate George W. Bush, giving investors some solace that a resolution may be in sight. Both major U.S. indexes initially rallied but soon ran out of steam with the Nasdaq composite index losing all of its gains.
"They came in thinking it would take away this cloud that has been crimping the markets," Ash Rajan, senior vice president with Prudential Securities, told CNNfn's Street Sweep. "Even if we have a flash rally, we need the Nasdaq to rally above 3,550 to ensure the rally is for real."
 The Dow gained 75.84, or nearly 1 percent, to 10,546.07. The blue chip index rallied for most of the session before losing nearly half of its gains by the close.
"The market is still jittery and volatile -- although it's positive volatility today. It's just a reaction to the softness in the market that we've been experiencing over the ugliness of this post-election period," said Peter Coolidge, senior trader at Brean Murray & Co.
Analysts say market fundamentals will continue to drive market action and investors are still worried about the fundamentals in the technology sector.
"The market is selling off because the fundamentals are weak and the stocks are overvalued," said David Beard, portfolio manager with Morgens Waterfall Vintiadis.
 The Nasdaq shed earlier gains amid renewed concerns about how much the slowing economy would hurt corporate profitability. The tech-heavy index initially rallied nearly 94 points before sellers stepped into the fray, led by the chip sector.
The Nasdaq shed 23.85 points to 2,880.53, while the S&P 500 climbed 7.21 to 1,348.98.
Market breadth was mixed. Advancers beat decliners on the New York Stock Exchange 1,563 to 1,288, as more than 924 million shares changed hands. On the Nasdaq, losers topped winners 2,255 to 1,793, as more than 1.6 billion shares were traded.
In other markets, Treasury securities mostly fell. The dollar weakened versus the euro but rose versus the yen.
Dow boosted by financial, drug issues
Investors sought bargains in many of the Dow issues, seen as benefiting from a Republican winner in the presidential contest coupled with confidence that "old economy" issues are safe havens for their cash.
"The fundamentals are clearly what investors continue to fall back on for their leadership and that leadership seems to be resting with the 'old economy' and the Dow," said Ned Riley, chief investment strategist at State Street Global Advisors.
 Florida Secretary of State Katherine Harris certified the state's presidential election results Sunday and declared Bush the winner of Florida's 25 electoral votes -- which would give the Texas governor enough electoral votes to claim the presidency. Vice President Al Gore filed legal papers, formally objecting to the certification.
"They're (investors) taking it as a Bush victory but, more importantly, they're taking it as the end is now in sight," Linda Jay, floor trader with RPM Specialists, told CNNfn's Market Call.
 Financial issues led the Dow's gains. J.P. Morgan (JPM: Research, Estimates) rose $1.94 to $144.13, and American Express (AXP: Research, Estimates) gained $1.63 to $53.
Drug stocks also helped boost the Dow. Merck (MRK: Research, Estimates) gained $2.19 to $91.63, and Johnson & Johnson (JNJ: Research, Estimates) rose $2.31 to $97.38.
In Dow stock news, Boeing (BA: Research, Estimates) gained $1.69 to $67.38. The aerospace manufacturer is expected to win orders for 113 of its 777 jetliners by the end of the year.
Semis lead tech selling
The semiconductor sector took a hit after Lehman Brothers cut its earnings estimates on Xilinx (XLNX: Research, Estimates) and Altera (ALTR: Research, Estimates), citing slowing demand.
Xilinx shares tumbled $10.31 to $46.50 while Altera slumped $3.88 to $27.31.
Concern about the sustainability of profit growth in tech stocks also prompted investors to take some cash away from select tech issues.
Hurting the Nasdaq, Cisco Systems (CSCO: Research, Estimates) fell $1.44 to $51.25, Oracle (ORCL: Research, Estimates) slid $1 to $23.13, and Applied Materials (AMAT: Research, Estimates) shed $2.56 to $44.13.
Arnie Berman, technology strategist at Wit SoundView, told CNNfn's Talking Stocks that institutions are forsaking the usual year-end tech stock buying spree and waiting until next year. (385K WAV) (385K AIFF)
 Analysts also voiced concern about the retail sector.
With holiday shopping season in full swing, Both Goldman Sachs and Merrill Lynch issued notes saying they were "cautious" on the specialty retail sector after the Thanksgiving holiday. Merrill Lynch attributed some of its concern to "tough fourth-quarter earnings comparisons."
"A lot is riding on this Christmas season and I don't think there are great expectations for a strong season," said Brean Murray's Coolidge. "I think there's still a lot of flux out there and there's still room for caution."
But discount retailers, such as Wal-Mart Stores (WMT: Research, Estimates) were faring much better. Wal-Mart, a Dow component, rose $4.13 to $49.31.
Click here for a comprehensive look at the retailers
In the day's economic data, sales of existing homes fell unexpectedly in the United States during October, according to the National Association of Realtors.
Sales fell 3.9 percent to an annual rate of 4.96 million. Analysts had expected October sales to be flat at a rate of about 5.1 million. 
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