Biotech, Drug Baskets Lead
The
Cyclicals/Transportation SPDR broke below support Monday as
component retail stocks again came under pressure.
Semiconductors experienced profit-taking, but the
Semiconductor HOLDR found support. The Biotech and
Pharmaceutical HOLDRs led the exchange-traded funds.
The
Cyclicals/Transportation SPDR
(
XLY |
Quote |
Chart |
News |
PowerRating) shed 2.4%, the
sharpest loss among the
funds. Among its components, Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating)
forfeited 1 7/8 to 49, Best Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) 2 11/16 to 71
1/16, Circuit City
(
CC |
Quote |
Chart |
News |
PowerRating) 1 7/16 to 26 3/16.
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Wal-Mart sold off
on heavy volume but closed near the upper end of its range.
It would have been better if the stock had managed to close
above its open. However, this is still a sign that
institutions are sensing a bargain. Note how the three
biggest volume days before, the share price fell and closed
in the bottom half of the session’s price range. The stock
was nearing overbought readings on Welles Wilder’s Relative
Strength Index.
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The Semiconductor
HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) pulled back 1.5%, its first down close in
seven sessions. Among its components, Texas Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating)
dropped 2 7/8 to 67 3/4, Altera
(
ALTR |
Quote |
Chart |
News |
PowerRating) 2 7/16 to 61
9/16, Maxim Integrated Products
(
MXIM |
Quote |
Chart |
News |
PowerRating) 2 3/16 to 80
11/16.
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On the upside,
biotech stocks moved higher, albeit on mediocre volume. The
Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) rose 2.3%, the day’s biggest gain
among the exchange-traded funds. Among the HOLDR’s
components, Gilead Sciences
(
GILD |
Quote |
Chart |
News |
PowerRating) added 5 1/16 to 95
1/16, Chiron
(
CHIR |
Quote |
Chart |
News |
PowerRating) 1 3/4 to 48 1/2, Immunex
(
IMNX |
Quote |
Chart |
News |
PowerRating)
1 1/2 to 44.
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Interest-rate
sensitive stocks performed reasonably, giving a mild boost
to the Regional Bank HOLDR
(
RKH |
Quote |
Chart |
News |
PowerRating), up 0.8%; the Dow Jones
Financial iShares
(
IYF |
Quote |
Chart |
News |
PowerRating) 1.0%; and the Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating)
0.9%. The Financial Spider had been in a trading range but
also has held nicely above its prior base.
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As of Monday’s
settlement on the Chicago Board of Trade, the September fed
funds futures contract has priced in a 90% chance that the
Federal Reserve will stand pat on interest rates. For more
on how to forecast monetary policy, see my lesson,
The Fed With Fed Funds Futures.