Are We There Yet?
Traders
sold on the opening bell, to where a meek rally turned into a sharp
afternoon sell off, leaving the major indexes in the red for the day.
Healthcare, airline, and utility stocks made modest gains on the day, while
computer technology, software, and semiconductors experienced heavy selling.
The
Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down 0.79%Â
to 9,771.85.
The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating) closed down 0.96%
to 1,127.98.
The Nasdaq [$COMPQ |$COMPQ] closed down 2.79%
to 1,930.34.
In economic news, the
University of Michigan’s preliminary consumer sentiment survey rose to 94.2 in
early January, from 88.8 in December. This beat analysts’Â expectations of
89.3, and is the fourth month in a row the number has increased. Also, the Commerce
Department reported that the U.S. trade deficit shrank to $27.89 billion, from
$29.33 billion in the previous month. The trade deficit number is not usually
perceived as an indicator that influences trading.
Overall
NYSE volume was 1,317,202,000.
NYSE advancing issues were 1,227,
with up volume at 474,276,000;
declining issues were 1,867,
with down volume at 813,835,000.
Overall Nasdaq volume was 1,670,986,000.
Nasdaq advancing issues were 1,229,
with up volume at 242,112,000;
declining issues were 2,322
with
down volume at 1,378,098,000.
The VIX
was up 0.63 to 24.37. The TRIN
was down 0.08 to 1.12.
Average volume on the day
has the Dow and the S&P 500 below their 50-day moving averages for three
days in a row, and now the Nasdaq has joined the party. The issue on traders’ minds now is: Are the markets taking a breather from their spectacular fall
rally, or have we just seen a near-term top? Only time will tell, though there
are always our market indicators
for clues.
Top
sectors of the day were the Japan
Index
(
$JPN.X |
Quote |
Chart |
News |
PowerRating) up 1.44% at 109.11
and the Airline Index
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) up 1.41% at 91.49.
Losing
sectors of the day were the Disk Drive
Index
(
$DDX.X |
Quote |
Chart |
News |
PowerRating) down 5.94%
at 101.48,
and the Computer Technology Index
(
$XCI.X |
Quote |
Chart |
News |
PowerRating) down 3.73% to 784.67.
Computer-hardware makers were
in the earnings spotlight today as International Business Machines
(
IBM |
Quote |
Chart |
News |
PowerRating),
4.95% to 113.96, reported an 11% drop in fourth-quarter earnings, posting $1.33
a share, compared to $1.48 a year ago. Despite strong sales in its software and
mainframe departments, a slow down in its services operation contributed to an
11% drop in revenue. Sun Micro Systems
(
SUNW |
Quote |
Chart |
News |
PowerRating), 2.43% to 12.07,
chimed in with with earnings of 3 cents a share, a penny better than analysts
expected, and far below the 15 cents a share earned this time last year. The
company cited a drop of 39% in revenue. Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), 0.41%
to 28.83, raised its earnings guidance a penny to 17 cents a share, claiming its
consumer business will increase about 50% from the third quarter, with a 40%
rise in revenue growth.
Diversified manufacturer and
Dow component Minnesota Mining and Manufacturing
(
MMM |
Quote |
Chart |
News |
PowerRating), up 2.18% to
106.80, reported earnings of 98 cents per share, down 13% from this quarter last
year’s earnings of $1.12. The company said net income rose 17% in the fourth
quarter, and setting aside various charges the company was within expectations.
The company also released its earnings five days ahead of schedule because of
growing concern over its exposure to asbestos litigation.
Semiconductor Genesis
Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating), down 3.21% to 66.02, announced that it had earned 42
cents a share, compared to 10 cents a share this quarter last year. Analysts
polled by Thompson Financial were looking for 34 cents a share. The company said
it expects “modest” growth for fourth-quarter revenue.
Motorcycle maker Harley
Davidson
(
HDI |
Quote |
Chart |
News |
PowerRating), down 1.57% to 53.45, reported earrings of 39 cents a
share, compared to 31 cents a year earlier. Sales of its bikes were up 25% for
the quarter, and ahead of analysts’ expectations of 36 to 38 cents a
share.
Software maker Echelon
(
ELON |
Quote |
Chart |
News |
PowerRating),
up 25.91% to 16.62, posted earnings of 14 cents a share, up from 3 cents a share
a year earlier. Analysts were looking for 13 cents a share.
Security software specialist Network
Associates
(
NETA |
Quote |
Chart |
News |
PowerRating), up 7.90% to 28.82, reported a loss of 2 cents a
share, compared to a loss of $1.07 a year ago. Analysts polled by Thompson
Financial were looking for 8 cents a share.
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