Stocks Run Out Of Steam
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The market's euphoria over the Federal Reserve's 10th rate cut of the year was short-lived, as the Dow Jones fell Wednesday and the Nasdaq eked out a sliver of a gain despite a late-afternoon plunge that saw the techs dip into the red right before the closing bell.
The Nasdaq closed at 1837.5, a gain of 2.45, or 0.1%. It was enough to give the exchange its third consecutive day of gains, though the final mark was a far cry from the day's high of 1869 reached just before 2 p.m.
The Dow dipped 36.75, or 0.4%, to finish at 9554.4. The loss snapped a four-day winning streak for the industrials. The S&P fell 3.4, or 0.3%, to 1115.5, while internet.com's Internet Stock Index, or ISDEX, gained 2.2% to 161.4.
Good economic news buoyed stocks earlier in the day as the Labor Department reported that third-quarter worker productivity rose 2.7%, the biggest gain in that economic indicator since last year's second quarter. The morning rally at one point pushed the Dow above its Sept. 10 close of 9605.
Network equipment maker Cisco Systems (NASDAQ:CSCO) continued to benefit from its upside earnings surprise delivered after Monday's market close. Shares of CSCO rose .46 to 18.93.
Compaq Computer (NYSE:CPQ) plunged .51 to 7.99 as investors became increasingly skeptical that the company's planned $21 billion merger with Hewlett-Packard (NYSE:HWP) would be completed. Members of the Hewlett and Packard families have strongly opposed the deal.
Meanwhile, HWP fell .63 to 19.18 as the company announced a freeze on pay hikes until the slowdown in the tech sector ends.
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