3-Day Pullback…Watching For Clues
Stocks sank for the third day in a row Tuesday, but keep in mind that the
pullback comes on the heels of a big two-week run-up. After trading higher in
the morning, stocks began to fade in the early afternoon and finished near their
lows of the day.
The orderly selloff showed little in the way of panic, and by the close the
Nasdaq was off 2.1%, the Dow was down 0.7%, and the S&P 500 had slipped
1.2%.
What was constructive was the fact the Nasdaq held above the psychological
2000 level, and the S&P 500 refused to lose 1200.
Volume picked up slightly above Monday’s levels as 1.95 billion shares traded
on the Nasdaq and 1.21 billion shares traded on the NYSE.
In economic news, April’s consumer confidence numbers fell to 109.2 which was
lower than the 112.1 that analysts had expected.Â
While a great deal of attention has been paid to the tech arena in recent
months, some analysts have noted that there are some solid performances quietly
being booked in the more traditional sectors of the economy.
“There have been significant pockets of stocks that have been in
bull market patterns throughout most of the year 2000 and right up to the
present time. These stocks suffered only minor losses during Feb. and March, and
could advance to new all-time highs in the months ahead,” said Paul Desmond, President, Lowry’s
Research.
“The stocks
leading this positive segment are commonly value stocks within the same industry
groups that have dominated for many months, namely banking, building
construction, oil refining, publishing and retail department stores,” he
added.
According to preliminary numbers, the Nasdaq sank 42.72 to 2016.60, the
S&P 500 eased 14.88 to 1209.48, and the Dow lost 77.89 to 10,454.34.
Top sectors were gold and silver
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$XAU.X |
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up 0.6%, and telecom
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Weakest sectors included computer technology
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biotechnology
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3.4%.
In the SOX, Novellus
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said it earned 62 cents per share on Monday after the bell. Novellus gapped up
at the open and traded as high as 56.36 before finishing the day down .18 to
50.96 on heavier-than-average volume.
Also up among techs was Infosys Technologies
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7% to 66.00. Volume, however, was fairly light.
The only SOX member to finish positive was Teradyne
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.58 to 35.80.
Dow winners were Boeing
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0.7%, and AT&T
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falling 4.9%.
Looking ahead, the March durable goods report will be released at 8:30 AM ET
on Tuesday. Analysts expect an increase of 0.6%.
At 10:00 AM ET the new and existing home sales will be released, and analysts
look for 909,000 new home sales and 5.12 million existing home sales. The
numbers should help clarify whether or not a chilling economy will encourage the
Fed to cut rates another 50 basis points in May.