Internet and wireless sectors lead technology stocks lower as two stocks, AOL Time Warner (NYSE:AOL) $14.70 -11.28% and Nokia (NYSE:NOK) $18.35 -8.9% lead their respective sectors to the downside after making comments that don't necessarily match the euphoric rise both of these stocks and their respective sectors have seen in recent weeks.
As mentioned earlier this morning, AOL's comments that 2003 growth looks to be flat has investors looking to book some profits after a 60% rise from its October relative lows near $10, which has led to profit taking in the Internets and depicted by the CBOE Internet Index (INX.X) 107.36 -6.88%, which leads today's sector loser list.
Wireless handset maker Nokia (NYSE:NOK) $18.42 -8.58% is near its session low and drags the Wireless Index (YLS.X) 60.35 -5.36% lower after the company said on its year-end update call that is was reaffirming its view that 2003 handset sales can grow by 10% or more over the 400 million unit sales it expects in 2002. However, that guidance disappointed investors relative to yesterday's Nokia upgrade by Merrill Lynch when the broker increased its forecast for handsets to 474 million units.
The "big 3" automakers are under some selling pressure today with General Motors (NYSE:GM) $39.26 -1.7%, Ford (NYSE:F) $11.02 -3.84% and Daimler/Chrysler (NYSE:DCX) $34.94 -1.7% set to release their November auto sales. Economists are expecting a 13.0 million unit sales pace for domestically produced autos, up slightly from 12.4 million in October. First Call consensus estimates for year-over-year sales of the three auto makers is for GM's sales to fall -11.3%, Ford's to slide -18% and Daimler/Chryselr's to sputter lower by -17.4%.
Commercial airlines are lower with the Airline Index (XAL.X) 40.15 -6.10% showing sector weakness after UAL Corp. (NYSE:UAL) $3.23 -1.52% said it is relying on grace periods to avoid meeting a larger-than-expected $920 million in debt obligations. UAL and leaders of the Machinists union had rearranged some non-monetary details of a $700 million concession package that the mechanics rejected 5 days ago, and agreed to put the amended deal to a new vote on Thursday.
A catious tone continues today after yesterday morning's rally stalled after a weaker than expect ISM Index showed modest contraction at the industrial level.
The Dow Industrials (INDU) 8,775 -1% is just off its lows of 8,774, but well above its rising 21-day SMA of 8,650. With the bulk of sectors in the red, the S&P 500 Index (SPX.X) 923 -1.15% has broken below yesterday's low of 927 and currently trades just on upward trend of 920. A break lower most likely has the psychologically important 900 level coming into play. This is a level where I would think bulls might look for a bullish entry point to play one last pop back to the 950 level ahead of Wednesday's ISM Services Index report and Thursday's release of weekly jobless claims, which have been giving bulls some pleasant surprises in recent weeks.