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Markets & Stocks
Nasdaq takes a dive
November 8, 2000: 5:15 p.m. ET

Stocks fall, led by tech, as Wall Street turns to uncertainty in Washington
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - Technology stocks tumbled Wednesday, sending the Nasdaq composite index lower for a third session, as Wall Street awaited word on the next U.S. president a day after polls closed.

Florida remained in the balance. And whether Al Gore or George W. Bush wins the state's 25 crucial electoral votes will stay unknown for another day.

"I think the market is scared by uncertainty and that's what this election is giving us," Brian Belski, market analyst at U.S Bancorp Piper Jaffray, told CNNfn's market coverage. "And the most uncertain sector fundamentally is technology."

graphicStill, the Dow Jones industrial average finished only modestly lower as investors moved into shares of tobacco, oil and drug companies. Those industries could face fewer restrictions under Bush, whose victory was declared and then retracted by several news organizations Tuesday night.

But for technology stocks, vulnerable since Labor Day, uncertainty appeared to add to their weakness. Many of the telecommunications firms that supply Cisco Systems' tumbled for a second day after Cisco said it will keep higher inventories.

"Valuations are still very high in the tech sector so any bad news hurts," said John Forelli, senior vice president and portfolio manager at Independence Investment Associates.

Still, one thing is clear: The closeness of the presidential election, regardless of outcome, could keep Bush or Gore from accomplishing any major tax cuts or spending plans, a plus for a market that likes legislative gridlock.

graphic"Even if Bush were to win, there's no mandate to do any radical legislation," Larry Wachtel, market analyst at Prudential Securities told CNNfn's Market Call.

The Nasdaq fell 184.09 points, or 5.4 percent, to 3,231.70. The Dow lost 45.12 to 10,907.06. The S&P 500 shed 22.59 to 1,409.28.

More stocks fell than rose. Declining issues on the New York Stock Exchange topped advancing ones 1,487 to 1,297, on volume of 894 million shares. Nasdaq losers beat winners 2,512 to 1,304. More than 1.6 billion shares changed hands.

In other markets, the dollar rose against the euro and yen. Treasury securities edged higher.

White House race in question

While Congress stayed in the hands of Republicans, who lost a few seats in both chambers, the presidential race now comes down to the fourth-most populous state, Florida, whose 25 electoral votes will give Democratic candidate Gore or Republican rival Bush a victory.

In the absence of this decision, many of the Nasdaq's once-hot tech stocks suffered even amid a lack of company-specific news. Oracle (ORCL: Research, Estimates) lost $1.75 to $24.81 while Sun Microsystems (SUNW: Research, Estimates) declined $11.13 to $100.31.

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And one trading session after Cisco Systems (CSCO: Research, Estimates) said it would maintain higher inventories, the companies that supply the computer network equipment maker continued to suffer. Broadcom (BRCM: Research, Estimates) lost $24.69 to $151.81 and PMC-Sierra Inc. (PMCS: Research, Estimates) shed $19.19 to $108.69.

Some analysts saw little political significance behind the day's action. Instead, they blamed the losses on continued concerns that the slowing economy will crimp revenue among tech stocks, which is still the market's most expensive sector.

"We don't know how big the slowdown is and what it's going to mean for earnings estimates," Vince Farrell, president of Spears Benzak Salomon & Farrell, told CNN's Street Sweep.

Betting on the outcome

Some investors deem Bush's tax cut plan and less regulatory approach toward business more market friendly than the policies of Gore, whose 1992 book "Earth in the Balance" energized environmentalists.

Still, the vice president presided over an eight-year period when the Dow more than tripled. At the same time, studies have shown that neither party can claim a better record on Wall Street's performance.

The close election means that neither candidates' contrasting policies on taxes and spending resonated with the kind of strength among voters that's often needed to make major policy changes.

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"Quick significant depletion of the surpluses seems unlikely," Lehman Brothers, the brokerage, wrote in a note to clients Wednesday. "An overly regulatory agenda is also unlikely."

Gregg Hymowitz, money manager at EnTrust Capital, echoed that sentiment, telling CNNfn's Market Call that the nearly evenly divided Congress means few clear political directives. (291K WAV) (291K AIFF).

In a long election night, some television networks declared Gore the winner of Florida but later named Bush before retracting both hasty conclusions.

Still, many of the so-called Bush stocks -- which gained in recent days amid polls showing the Texas governor ahead -- rose Wednesday.

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Exxon-Mobil (XOM: Research, Estimates), which might benefit if Bush succeeds in opening some public lands for oil exploration, advanced $1.69 to $90.69.

Drug companies, criticized by Gore, also advanced. Merck (MRK: Research, Estimates) gained $3.94 to $90.81 and Johnson & Johnson (JNJ: Research, Estimates) climbed $1.31 to $93.44.

But Microsoft (MSFT: Research, Estimates), whose antitrust troubles could ease under a Bush White House, gave back earlier gains. Its shares lost $1.06 cents to $69.44. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.