TECH STOCKS continued to show strong resilience Friday in the face of bad earnings and forecasts. However, the broader market showed greater sensitivity to the profit picture and it fell.
Market players feel that techs are still so far down from their highs of last year that there's little sentiment to push them lower — no matter what happens, analysts said. Cyclicals and other older economy stocks didn't fall as far in 2000, so are more sensitive to traditional sell signals such as earnings warnings.
"This is what technicians love to see when they are looking for bottoms," said Ed Yardeni, chief investment strategist at Deutsche Banc Alex. Brown. "Lots of bad news and the market absorbs it. Bears say the [price-to-earnings ratio] is too high and earnings estimates are still too high, and they probably are. But there is some stubbornness from the Nasdaq groupies that just won't let go, and that is pretty impressive."
The Nasdaq Composite Index gained 26.92 points, or nearly 1%, to 2781.20, finishing the week up 0.40%. The Dow Jones Industrial Average lost 69.54 to 10659.98. At least it recovered from a 103-point drop earlier in the day and managed to finished the week up a scant 0.70%. The S&P 500 index fell 2.57 to 1354.94.
Energy stocks were particularly weak after having fallen out of fashion days ago. Cyclicals fell Friday after having done so well Thursday when Fed Chairman Alan Greenspan endorsed tax cuts and hinted at more interest rate cuts.
To be sure, the day started out looking a whole lot differently. Tech stocks opened sharply lower, continuing Thursday's 105-point decline in the Nasdaq. Corporate chieftains from PMC-Sierra (PMCS), a communications-chip maker, cell-phone company Ericsson (ERICY) and others all took down profit projections for coming quarters.
Cyclicals were hurt by a big earnings miss and warning from forest-products maker Georgia-Pacific (GP). Georgia-Pacific posted a fourth-quarter loss of two cents a share, instead of an expected 32-cent gain. The company said a severe slowdown in building-materials sales would continue to haunt it in 2001.
But by the afternoon, the Nasdaq was fighting back, "If you get bad earnings news — like with PMC Sierra and other major companies — instead of getting whacked like in December, you meander around. The fact that you give them bad news and you can't take them down is encouraging." In addition, he said, "the market knows help is on the way" from Greenspan.
Market players feel that techs are still so far down from their highs of last year that there's little sentiment to push them lower — no matter what happens, analysts said. Cyclicals and other older economy stocks didn't fall as far in 2000, so are more sensitive to traditional sell signals such as earnings warnings.
"This is what technicians love to see when they are looking for bottoms," said Ed Yardeni, chief investment strategist at Deutsche Banc Alex. Brown. "Lots of bad news and the market absorbs it. Bears say the [price-to-earnings ratio] is too high and earnings estimates are still too high, and they probably are. But there is some stubbornness from the Nasdaq groupies that just won't let go, and that is pretty impressive."
The Nasdaq Composite Index gained 26.92 points, or nearly 1%, to 2781.20, finishing the week up 0.40%. The Dow Jones Industrial Average lost 69.54 to 10659.98. At least it recovered from a 103-point drop earlier in the day and managed to finished the week up a scant 0.70%. The S&P 500 index fell 2.57 to 1354.94.
Energy stocks were particularly weak after having fallen out of fashion days ago. Cyclicals fell Friday after having done so well Thursday when Fed Chairman Alan Greenspan endorsed tax cuts and hinted at more interest rate cuts.
To be sure, the day started out looking a whole lot differently. Tech stocks opened sharply lower, continuing Thursday's 105-point decline in the Nasdaq. Corporate chieftains from PMC-Sierra (PMCS), a communications-chip maker, cell-phone company Ericsson (ERICY) and others all took down profit projections for coming quarters.
Cyclicals were hurt by a big earnings miss and warning from forest-products maker Georgia-Pacific (GP). Georgia-Pacific posted a fourth-quarter loss of two cents a share, instead of an expected 32-cent gain. The company said a severe slowdown in building-materials sales would continue to haunt it in 2001.
But by the afternoon, the Nasdaq was fighting back, "If you get bad earnings news — like with PMC Sierra and other major companies — instead of getting whacked like in December, you meander around. The fact that you give them bad news and you can't take them down is encouraging." In addition, he said, "the market knows help is on the way" from Greenspan.
