Cohen hits Wall St.
A portfolio change toward fewer stocks sends some traders to the exits
March 28, 2000: 3:09 p.m. ET
NEW YORK (CNNfn) - Investors heeded advice of one of Wall Street's most influential bulls late Tuesday, reducing stock positions after Abby Joseph Cohen advised the move.
Cohen, investment strategist at Goldman Sachs, also repeated a cautious view on technology shares, which bore the brunt of the day's selling.
The tech-heavy Nasdaq composite index fell for the second straight day. And the Dow Jones industrial average edged lower, hurt by Intel, Hewlett-Packard and International Business Machines.
Just before 3 p.m. ET, the Nasdaq fell 57.86 to 4,900.70.
The Dow, an index of 30 blue-chip stocks, shed 8.68 to 11,017.17.
The S&P 500 lost 2.27 to 1,521.59.
More stocks fell than rose. Declining issues on the New York Stock Exchange outpaced advancing ones 1,535 to 1,395, with trading volume topping 751 million. But Nasdaq losers beat winners 2,548 to 1,496, as more than 1.1 billion shares changing hands.
In other markets, the dollar fell against the yen but gained versus the euro. Treasury securities were mixed.
Cohen hits Nasdaq
Pinning the move on the recent rise in stock prices, Cohen advised cutting equity positions to 65 percent from 70 percent.
"We have to respect what she has to say," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum. Hyman said he agrees with Cohen's comments that stock investors should not expect the sky-high returns of the recent past.
The hypothetical 5 percent Cohen took from equities was moved into cash, which previously had no allocation. Bond allocations remained at 27 percent, while commodities positions were held at 3 percent.
And the well-known bull repeated a note of caution on technology, first contained in a March 16 report.
"For the first time in a decade, our model portfolio is no longer recommending an overweighted position in technology," she said.
The note to clients comes as the Nasdaq, whose technology stocks are expected to post strong profits, is up about 21 percent this year.
But Terrence Gabriel, stock market strategist at IDEAglobal.com, said those expectations for a strong first-quarter earnings season already are priced into many technology stocks.
"It's had such a great ride," Gabriel said. But a lot of the gains "are already priced into the market." As such, Gabriel sees money flowing into cheaper, beaten-up stocks in the days ahead.
That appeared to be the case Tuesday.
Supporting the Dow, American Express (AXP: Research, Estimates) jumped 3-7/8 to 154-1/4 and J.P. Morgan (JPM: Research, Estimates) gained 3 to 134-1/8
Microsoft (MSFT: Research, Estimates), another Dow member, gained 1-1/2 to 105-9/16 after the software maker got more time to try to settle the government's antitrust case against it.
But other Dow tech stocks didn't fare as well. Hewlett-Packard (HWP: Research, Estimates) shed 2-3/4 to 143-7/16, Intel (INTC: Research, Estimates) lost 4-5/8 to 138, and IBM (IBM: Research, Estimates) fell 3-3/8 to 123-3/8.
Waiting for OPEC
Wall Street again watched OPEC Monday, a day after failing to agree to raise production Monday. The gathering of the 11-nation oil cartel comes after oil prices tripled over the last 12 months, a development that could hurt profits across many industries.
Shares of Exxon Mobil (XOM: Research, Estimates), the world's largest oil producer, rose 1/4 to 76-3/4.
UAL Corp. (UAL: Research, Estimates) jumped 2-3/19 to 59-3/16. The parent of United Airlines announced after the market closed Monday that it will have better-than-expected first-quarter results, despite the steep rise in jet fuel prices.
Bank One Corp. (ONE: Research, Estimates) rose 2-1/8 to 34-1/4 after late Monday naming former Citigroup president James Dimon as chairman and chief executive officer. Dimon said he will buy 2 million shares of Bank One stock, which is off 41 percent in the last 52 weeks.
In economic indicators, consumer confidence fell more sharply than expected in March from its strong level in February, the Conference Board said. Its index of consumer sentiment dropped to 136.7 from a revised 140.8. Wall Street economists had forecast a reading of 140. Confidence is widely watched, since consumer spending fuels two-thirds of the U.S. economy