Blue chips may have recovered from a mini-slump that troughed Wednesday, but tech issues weren't as resilient. Investors grappled with whether Wednesday's losses were a buying opportunity or a correction--and apparently tech buyers leaned toward the latter.
Uncertainty surrounding the shifting stance of the Fed on short-term interest rates seems to have shortened investment horizons. Adding to the confusion were conflicting economic data, including a fall in first-time unemployment claims and the lowest monthly rise in wages and benefits in a year.
It's no wonder investors appear to be guessing. "The market is on a precarious perch right now," Bryan Piskorowski, market commentator at Wachovia Securities, told The Associated Press. "Fundamentals are definitely robust, but there's always the question of how robust they'll be down the road."
The Fed's decision to resist a pre-emptive rate increase and instead wait for signs of inflation first was a more popular decision among buyers of blue-chip issues, with the Dow rising 41.92 points, or 0.4%, to 10,510.29, and the S&P 500 rising 5.64 points, or 0.5%, to 1,134.11. The Nasdaq fell 9.14 points, or 0.4%, to 2,068.23. Our InformationWeek 100 index fell 3.85 points, or 1.15%, 331.49.
Among the notable losers in the tech sector Thursday were Veritas, which fell $4.23, or 11.6%, to $32.24; Amazon.com, which fell $2.74, or 5.27%, to $49.22; Sun Microsystems, which fell 24 cents, or 4.44%, to $5.23; and Cisco Systems, which fell 82 cents, or 3.06%, to $25.96. Despite the rough day for techs, the Nasdaq-100 trading stock managed to post a modest gain of 6 cents, or 0.2%, to close at $37.16, on very heavy volume of 137.8 million shares.