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Nasdaq snaps win streak
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December 12, 2000: 4:43 p.m. ET
Election uncertainty prompts rotation out of techs; Procter & Gamble boosts Dow
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - The Nasdaq composite index snapped a two-day winning streak Tuesday with investors cashing in on the previous session's gains, opting to take a wait-and-see attitude as uncertainty over the month-long election impasse continued.
"It's just that everybody is waiting for the U.S. Supreme Court to announce what they are going to do," said Peter Coolidge, senior trader with Brean Murray & Co. "The longer the ruling takes, the more nervous the market is going to become."
The main wild card investors are hoping to eliminate is a U.S. Supreme Court decision, due at any time, to finally produce a decision in the contentious presidential race. The nine justices began deliberating Monday afternoon after hearing arguments from attorneys for Vice President Al Gore and Texas Gov. George W. Bush.
 The tech-heavy Nasdaq tumbled 83.33 points, or more than 2 percent, to 2,931.77, after a warning from chip maker Applied Micro Devices spilled into other tech sectors.
The decline comes just one day after the composite crossed the 3,000 mark for the first time since mid-November. The Nasdaq is still down 14.2 percent from Election Day on Nov. 7.
The blue chips fared better after positive guidance from Procter & Gamble sent the Dow Jones industrial average rising. Analysts said the Dow was also benefiting from money rotating out of technology into more cyclical issues, seen as holding up better during periods of uncertainty.
 The Dow rallied 42.47 points to 10,768.27. Boosting the blue-chip indicator was Procter & Gamble (PG: Research, Estimates), surging $2.88 to $71.94 after it confirmed it would meet expectations for the quarter ending this month. The S&P 500 slid 9.02 to 1,371.18.
Volume on the New York Stock Exchange reached more than 1 billion shares. Losers outpaced winners on the Nasdaq 2,426 to 1,552, as more than 1.89 billion shares were traded.
In other markets, Treasury securities edged lower. The dollar rose against the yen and was little changed versus the euro.
Wall St. shrugs off warnings
While investors awaited word from the Supreme Court, revenue warnings were mostly shrugged off. Analysts said some of the positive price action was a sign that negative news was built into these stocks -- so warnings are less harmful.
One example was Eastman Kodak (EK: Research, Estimates), which gained $1.50 to $41.06 after the maker of film and other photographic equipment warned that a slowdown in consumer spending will leave fourth-quarter earnings below estimates. The company did say it expected more robust growth in the second half of 2001.
 DoubleClick (DCLK: Research, Estimates) jumped $1.94 to $13.88 after the Internet advertising firm warned of a break-even or money-losing fourth quarter, rather than the slightly profitable one previously expected.
Advanced Micro Devices (AMD: Research, Estimates) fell 6 cents to $17.25. The chipmaker said it would miss fourth-quarter sales and earnings targets due to slower-than-expected PC sales.
And the warning hurt the rest of the chip sector. Intel (INTC: Research, Estimates) fell 94 cents to $36.50 and Applied Materials (AMAT: Research, Estimates) shed $5.44 to $45.50.
 Dow component Honeywell International (HON: Research, Estimates) tumbled $3.19 to $52 after it warned that its fourth-quarter profit will miss Wall Street's current expectations.
But another Dow member, General Motors (GM: Research, Estimates), gained 19 cents to $51.75 despite warning that fourth-quarter profit will be below the forecast. That's because the No. 1 automaker announced it will phase out its Oldsmobile division, the nation's oldest car brand, as well as cut jobs and take a charge of up to $2.5 billion.
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Economic clarity but fuzzy election
With warnings and election uncertainty keeping investors on edge, some comfort is being taken by the belief that Federal Reserve Chairman Alan Greenspan may move toward a more neutral bias when the Fed's policy-making arm meets on Dec. 19.
"The market is still looking forward to discounting a neutral stance by the Fed," said Terence Gabriel, stock market strategist with IDEAglobal.com. The economic data coming out Thursday and Friday is expected to fall in line with forecasts and add to the expectation that interest rates may be reduced early next year.
"We think those numbers are likely to be subdued, not super weak and not super strong," said Gabriel.
On Thursday, the Labor Department will report the November Producer Price Index (PPI), a measure of how much goods cost at the wholesale level. Economists polled by Briefing.com expect an increase of 0.3 percent, compared with 0.4 percent in October.
The week will culminate with the closely watched Consumer Price Index (CPI) for November. Expectations are for a rise of 0.3 percent, according to economists polled by Briefing.com, compared with 0.2 percent in October.
 Adding to the choppy environment, investors are keeping their fingers crossed that soon there will be some clarity about who may be headed to the White House.
"In the face of really bad news, the markets are holding up pretty well and I absolutely believe this bad news is in there," Linda Jay, NYSE floor trader with RPM Specialists, told CNNfn's Market Call. "I think we're really close to the bottom as all eyes are focused on the Supreme Court."
But Richard Cripps, chief market strategist at Legg Mason, told CNNfn's Market Call that the month-long White House uncertainty will likely temper any year-end rally. (401K WAV) (401K AIFF).
Chase and J.P. Morgan merger gains Fed approval
Chase Manhattan (CMB: Research, Estimates), the third-largest U.S. bank holding company, received Federal Reserve approval to proceed with its $29 billion purchase of commercial and investment bank J.P. Morgan (JPM: Research, Estimates).
The deal, first announced in September, will join two of the country's oldest and biggest banks, with combined customer assets of $660 billion.
Chase shares rose 50 cents to $43, while J.P. Morgan shares jumped $1.69 to $158.44. 
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