By Kate Gibson
As the U.S. stock market struggled Monday in the wake of the
prior session's losses, technology remained the least bleak spot
after emerging as the only sector to eke out gains last week.
On Monday, tech shares lapsed along with the broader market, but
remained the session's best performer among the S&P 500's 10
industry groups, with materials and financials down the most.
"The market started off higher as the dollar was weak, which
helped commodity prices, such as oil. Then the dollar turned
positive and triggered concern a rising dollar would hurt commodity
prices, which hurt stocks," said Yu-Dee Chang, principal for ACE
Investment Strategies LLC.
"These days, it all goes back to the dollar. The investment
community tends to focus on something from time to time, and right
now it's the dollar," said Chang.
After both a rise and fall of 100 points, the Dow Jones
Industrial Average (DJI) was off 92.13 points, or 0.9%, at
9,880.05.
"The financial sector is putting the most pressure on the
overall market. There are two major concerns: Bank of America (BAC)
will most likely have to raise money to pay back TARP, and over the
weekend we certainly added to the list and got over the century
mark for the number of banks that have gone under the waves," said
Art Hogan, chief market strategist at Jefferies & Co.
"In the middle of the day, a couple of banks got downgraded,
which was coupled with some chatter that the government may phase
out the home buyer credit, which hurt home builders," said ACE's
Chang.
The S&P 500 Index (SPX) shed 11.20 points, or 1%, to
1,068.4, while the technology-driven Nasdaq Composite Index (RIXF)
was the last to give up gains, retreating 12.15 points, or 0.6%, to
2,142.32.
As of Friday's close, 62% of S&P 500 component companies
reporting their quarterly results had topped analysts' expectations
for sales -- and tech's accounted for the best revenues as compared
with Wall Street's outlooks. Overall, sales are still on track to
drop about 10%, according to Thomson.
"Tech was the only sector to rise last week and is still the
best performer year-to-date with a gain of 49.5%," wrote Ed
Yardeni, chief investment strategist of Yardeni Research Inc., in a
Monday note.
Early risers
On Monday, shares of Amazon.com Inc. (AMZN) continued to rise,
recently up 5%, in the wake of the online retailer's strong
earnings report on Friday. .
Of the Dow industrials' 30 components, Microsoft Corp. (MSFT)
was one of three to remain in positive turf, up 2.2% after industry
reports of strong sales of the new Windows 7 operating system,
released Oct. 22. .
Also bucking the negative trend, shares of Marvell Technology
Group Ltd. (MRVL) rose 3% after the maker of storage and
communications semiconductors raised its third-quarter revenue
forecast. .
"Eight of the 10 S&P 500 sectors are confirming the cyclical
rebound in forward earnings, with new record highs for consumer
staples and health care. Information technology is showing the best
come-from-behind performance," said Yardeni.