Not What The Doctor Ordered…But A Good Start
The markets opened lower Tuesday but
rallied up after the National Association of Purchasing Managers’ report came
out.
The August NAPM report was better than
expected. The news that made the markets move upward was the increase in both new orders and production,
both moving above the 50% level. New orders
rose to 53.1%, while the production index moved up to 52.2%. The overall index
rose to 47.9%, better than economists’ consensus of 44%. As I pointed out in
the August 22, 2001 “Recap” with regard to the economy moving
forward: “This will not happen until we see something like the NAPM
composite index break above 50%."
This NAPM news, although not exactly
what the doctor ordered, is a good start in the right
direction.
Breadth for the day was mixed. NYSE advancers led decliners 1624 to 1483. On the Nasdaq, advancers lagged decliners
1209 to 1916.
The CBOE Volatility Index
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closed higher 2.9%, while the Nasdaq 100 Volatility Index
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8.7%.
As for the broader markets, the Nasdaq
Composite fell 1.9% while the Dow Jones Industrial Average tacked on 0.4% as the two
indices lost the majority — if not all — of the gains of the trading session.
Sectors in the green were in abundance
with the Oil Services Index
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2.4%.
The Transportation Index
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surged higher 2.0% as it closed in on its 50- and 200-day moving average.
And the Forest & Paper Index
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closed higher 1.7% as it made a new closing high for the session.
On the down side was the Gold and
Silver Index
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a W-shaped bottom.
The tech sector lost ground in the
afternoon. The Interactive Week Internet Index
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3.4%.
The Semiconductor Index
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fell 3.3% and the GSTI Internet Index
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Individual stocks moving higher
included Anderson Exploration
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announced it would acquire the company for $3.4 billion in cash and assume the
$1.2 billion in debt.
Tesoro Petroleum
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as the company announced that its wholly owned subsidiary Tesoro West Coast
Company agreed to acquire 46 retail fueling facilities in Washington, Oregon and
Idaho.
Surmodics
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16.2% on the positive report on Johnson & Johnson’s
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as the company will take in about 1% royalties from JNJ stent sales.
Colt Telecommunications Group
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closed up 25.1% on rumors that the company is a takeover target.
Sliding in the session was Providian
Financial
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the company after the financial company issued earnings warnings.
Hewlett Packard
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18.6% on news that the company has agreed to acquire Compaq Computers [CPQ| for
$25 billion in stock.
Angiotech Pharmaceuticals
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shares were hammered, losing 20.2% on fear that the Johnson & Johnson stent
news may increase competition.
Novoste Corp
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on a downgrade by Merrill Lynch from Near Term Buy to Near Term Neutral.