A Key Support Area To Watch For The Dow

May 29, 2002
Daniel Beighley

Trading was choppy today, as the major indexes moved south
off the opening bell and worked their way mostly down throughout the session.
Healthcare, banks, pharmaceuticals, and forest and paper were the best
performers; as computer hardware, gold and silver, semiconductors, and
biotechnology issues were the worst.

At this juncture, the only major index above its 200-day
moving average is the Dow, as it closed just above this mark. This is a key
support area that must be watched closely.

U.S. Treasury Bonds were
up 17 at 102 ’01.

With no economic news released
today, the financial community looks to tomorrow’s initial jobless claims and
Chicago PMI reports.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.36, and down–volume
over up–volume
by a 2.11 ratio. Nasdaq declining issues over advancing issues came in at 1.66,
and down–volume
beat up–volume
by a 5.53 ratio. The
VIX
was up 0.60 at 23.03. The TRIN
was down 0.14 at 1.55.

Oil services company Halliburton (HAL),
down 3.25% at 18.72, has been notified by the SEC that it is the subject
of a preliminary investigation over accounting issues for cost overruns and
construction jobs. The company believes the investigation is the result of a NY
Times article that identified the issues.

Gold stocks were under pressure today as Goldman Sachs downgraded AngloGold
(AU),
down 3.41% at 33.12, and Barrick (ABX),
down 3.31% at 22.43, to "market perform" from "market
outperform" as both stocks exceeded the firm’s price targets. Goldman
believes gold will have difficulty rising in the coming year due to weak demand
in the jewelry industry.

Communications services company and Dow component AT&T Corp.
(
T |
Quote |
Chart |
News |
PowerRating),
down 3.22% at 12.01, had its long-term debt rating downgraded to two notches
above "junk" status due to weak revenue from the long distance voice
and data business.

Natural gas company El Paso Corp. (EP),
down 23.41% at 27.01, has cut its profit forecasts for the year to $2.60 to
$2.75 a share from $3.30 to $3.45 a share.

Construction services company Hovnanian Enterprises (HOV),
up 7.09% at 29.45, reported second quarter income of 80 cents a share as it
easily beat analysts’ consensus of 67 cents a share.

Semiconductor company Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating), down 7.00% at 43.40,
raised guidance for its second quarter earnings as it increased its orders
target.

Also in the semiconductor sector, Teradyne
(
TER |
Quote |
Chart |
News |
PowerRating), up 1.08% at
27.83, was upgraded by J.P. Morgan to "buy" based on valuation and the
fact that the company is a leader in semi test and high-end connections systems.

Home builder Toll Brothers (TOL),
down 3.20% at 29.30, reported second quarter earnings of 69 cents a share as it
beat the consensus estimate by 7 cents.

Coffee retailer Starbucks
(
SBUX |
Quote |
Chart |
News |
PowerRating), up 4.02% at 23.00, was given a
boost from Merrill Lynch as it upgraded the company to "strong buy"
based on strong sales.

From TM’s Implosion
List, investment services company Investment Technology Group
(
ITG |
Quote |
Chart |
News |
PowerRating) fell 5.86% at 36.94.

A Key Support Area To Watch For The Dow

BUY THE FEAR, SELL THE GREED

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