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Closing Market Report

Star-Bulletin news services

Monday, January 8, 2001

Stocks lower

Associated Press

NEW YORK -- Tech stocks fell today as Wall Street waited to see how much of a negative effect the slowing economy has had on earnings. Investors retreated to the relative safety of some blue chips. In midday trading, the Dow Jones industrial average was down 36.19 at 10,625.82, a drop largely due to its tech components. The Nasdaq composite index was down 59.79 at 2,347.86. The Standard & Poor's 500 index was off 8.31 at 1,290.04. The Russell 2000 index was down 2.02 at 461.12. Advancers led decliners 6 to 5 on the New York Stock Exchange where volume was 473.92 million, well below Friday's pace of 690.14 million.

The 10-year Treasury note's price was down 1/16 point, or 63 cents per $1,000 in face value, at midday; its yield rose to 4.93 percent from 4.92 percent on Friday. The 30-year bond was off 7/32 point and yielded 5.41 percent, up from 5.40 percent on Friday.

Investors have realized that although the Federal Reserve cut interest rates by half a point last week, it will take a while for earnings and the economy to benefit. "It is clear that there is going to be no real improvement in earnings or the economy until the second half of the year," said Richard E. Cripps, chief market strategists for Legg Mason of Baltimore. "So, we'll have an ugly first quarter and the second quarter will be difficult, as well."

While awaiting earnings announcements that are just starting to trickle in, investors again focused on tech stocks.

Dell Computer was down 88 cents at $18.13 after Bear Stearns lowered its earnings estimates for the company.

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