The historic implosion of Bear Stearns, the nation’s fifth-largest investment bank, hit technology stocks harder than it hit blue chips, which somehow finished the day with small gains.
News that JP Morgan, with the help of the Federal Reserve, acquired Bear Stearns at fire-sale prices sent stocks plunging in the early going Monday. But perhaps encouraged by the Fed’s extraordinary steps to act as lender of last resort for investment banks — along with the possibility of huge interest rate cuts when the Fed meets on Tuesday — encouraged buyers to come in and lift stocks well off their lows.
One of the biggest surprises was that technology shares suffered more than blue chips, losing 1.6% on the day.
Microsoft, HP and Intel managed 1% gains, but the rest of the sector struggled.
Yahoo lost 3% on continued uncertainty over Microsoft’s hostile takeover attempt, and Google fell another 4% to a fresh 52-week low.
Adobe tumbled 5.6% a day ahead of its results, and VMware fell 7.5% on a Baird downgrade.
The Nasdaq fell 35 to 2177, the S&P lost 11 to 1276, and the Dow gained 21 to 11,972. Volume rose to 5.78 billion shares on the NYSE, and 2.38 billion on the Nasdaq. Decliners led by a 27-5 margin on the NYSE, and 22-7 on the Nasdaq. Downside volume was 77% on the NYSE, and 76% on the Nasdaq. New highs-new lows were 27-641 on the NYSE, and 29-542 on the Nasdaq.