Techs fell back into the minus column after the Nasdaq's brief stint in positive territory. Chip stocks were held down by losses in Advanced Micro Devices while sellers took aim at hardware issues.
In the broader market, natural gas, oil service, drug, defense and insurance stocks trekked higher while retail, utility, airline and gold issues backpedaled
Weekly reports from Instinet Redbook and BTM-UBSW showed that chain store sales have weakened in November so far.
Investors took the shares of Dow component Home Depot down a whopping 12.4 percent. The retailer (HD reported an as-expected third-quarter profit and also backed its fourth-quarter and full-year profit goals.
In analyst actions, Bear Stearns lowered its view on Amazon.com to a "peer perform" rating from an "outperform" on valuation and on expectations that the company's upside surprises will be more muted in 2003. The firm, in fact, feels that the online retailer trades at a "significant premium" to its peers. Shares of Amazon lost 4.3 percent
Additionally, USB Piper Jaffray downgraded Biogen (BGEN to an "underperform" from a "market perform" on belief that the biotech firm trades at a significant premium to its profitable peer group. The stock gave up 1.6 percent.
In the meantime, CS First Boston lowered its view on the entire wireless telecom sector to an "underweight" from a "market weight" on the belief that wireless infrastructure is weakening due to ongoing cuts in capital expenditures. Among the stocks CSFB sees having the most upside potential are Qualcomm ,Nokia, Ericsson
Qualcomm fell 3.6 percent and Nokia shaved 1.9 percent.
Agilent Technology ) was a standout in the tech sector, tacking on a massive 21.2 percent after checking in with better-than-expected fiscal fourth-quarter numbers late Monday
Und GREENSPANS REDE
WASHINGTON (CBS.MW) - While the Fed is ready and willing to ease monetary policy again and again, there's a limit to how much the Federal Reserve or any central bank can do to stimulate the economy, Chairman Alan Greenspan said Tuesday.
Some hurdles to higher growth have nothing to do with interest rates or monetary policy, but with structural impediments in the economy, Greenspan said in response to questions from the Council on Foreign Relations.
Despite 12 interest rate cuts, U.S. firms still aren't investing in new equipment, he said.
"Nobody's doing anything," he said, although investments in high technology still have large returns in the long run.
In the short run, perceived risks due to corporate governance, war and terrorism are creating "very high hurdles" to capital spending. Once those "risk premiums" are removed, investments in new technologies will resume, he said.
Greenspan said worries about corporate governance are real, but should not be exaggerated. If the system had broken down completely, the economy would not have been able to take advantage of the extraordinary gains in productivity seen in the past decade, he said.
To be sure, the recent weakened pace of world economic activity has raised concerns that the full cycle of the past decade has yet to be definitively concluded. But the already clearly evident increased resiliency arguably supports the view that the world economy already has become more flexible irrespective of how events unfold in the weeks and months ahead," Greenspan said
Despite the draining impact of a loss of $8 trillion of stock market wealth, a sharp contraction in corporate investment and, of course, the tragic events of Sept. 11, 2001, our economy is still growing," he said. "Importantly, despite significant losses, no major U.S. financial institution has been driven to default."
He did not specifically address Fed interest-rate policy in those remarks.
Greenspan also told the group that derivatives and other seemingly complex methods of distributing risk across a wider spectrum of financial interests helped defray some of the impact from high-profile corporate defaults by Enron, Global Crossing, Railtrack, WorldCom, Swissair and on the sovereign debt issued by Argentina.
These headline-grabbing failures don't necessarily mean that central banks should shy away from encouraging risk-taking.
"While regulation must change as financial structures do, such regulatory change must be kept to a minimum to avoid fostering uncertainty among innovators and investors," Greenspan told the group.
He said that the role of central banks as a lender of last resort is important and necessary in the world of risk management, but stressed that private interests must be allowed to shoulder the bulk of the benefits and the failures.