Last week, some tentative stock movement, coupled with a serious one-day
decline and then surge, led to another volatile week for the Nasdaq. That
index suffered its biggest one-day percentage decline since September,
plunging over 2.5%, on some downbeat industry comments from Cisco. Despite the
technology bellwether posting better-than-expected quarterly results, the
stock tanked on remarks from its chief executive that CEOs in general remain
"surprisingly cautious" about fresh spending and hiring. "The Cisco quarter,
while not horrible, probably accounts for the extreme weakness in the
Nasdaq...It's a barometer for large-cap technology and any little
disappointment is going to have an exaggerated effect on prices," said Brian
Pears, head of equity trading at Victory Capital Management, to Reuters News.
Outside the corporate space, other items conspired to keep the market at bay.
Word that the lethal poison ricin was found in Senate Republican Leader Bill
Frist's office mailroom renewed terrorism concerns. Also, overshadowing the
entire week was Friday's employment report for January. "The key issue is that
people are going to look to that employment number and it will be a key
(indicator) for the direction of the economy and potentially for the overall
tone of the markets for the coming weeks," said Jack Caffrey, equity
strategist at JP Morgan Private Bank, to Reuters News. January payrolls grew
at their fastest rate in three years, although economists were looking for a
more robust jump in payrolls. Still, the release was enough to reassure
investors that an improving labor market is evident, and that interest rates
should remain low for the foreseeable future, sending stocks deep into the
black. Going forward, as earnings season winds down, economic reports will be
more closely scrutinized.
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomson.com/financial.
SOURCE Thomson Financial Corporate Group
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