Blue-Chip Bounce
Semiconductors sagged Tuesday ahead of Intel’s earnings announcement, and
that helped keep the Nasdaq down 0.3% for the day. Despite the pre-Intel worry,
however, blue chips booked a solid day, with the Dow tacking on 1.2% and the
S&P 500 gaining 0.6%. Cyclicals and financials powered the blue-chip rally.
Volume eased by about 20% from Friday’s levels as 2.03 billion shares traded
on the Nasdaq and 1.10 billion shares changed hands on the NYSE.
While analysts have been pleased with the market’s performance since the
start of the new year, many remain cautiously skeptical of the recent resilience
in stocks.
“Short term, the market seems in much better shape — no downward
spiral, and the really good news is that there is a January effect. We should at
least muddle through to the seasonally weak period of early-to-mid February. And
then it’s anyone’s guess, but our guess is for more bear market,” said
Frank Gretz, Market Analyst, Shields & Co.
“There’s too much of everything, not just around here but around the
world as well, and lower rates won’t correct that, at least not quickly. And as
for the market itself, ‘tired of going down’ is not how bull markets begin. They
begin out of a thorough washout in all stocks, not just the Semis and the Ciscos
but in the Cienas and Junipers too,” he added.
According to preliminary numbers, the Dow rose 127.28 to 10,652.66, the
Nasdaq slipped 8.08 to 2618.42, and the S&P 500 added 8.10 to 1326.65.
Top sectors were forest and paper products
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chemicals
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banks
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Under pressure were semiconductors
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down 1.4%, and telecom
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Leading the banks were First Union
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up 3.8%. and PNC
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Fuel Cell stocks were among the day’s standouts, with FuelCell Energy
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rising 7 11/16 to 68 1/2 and Ballard Power
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Dow winners were Alcoa
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Disney
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Intel
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3/8, but after the bell Intel announced earnings that beat Street expectations
by a penny. Intel faltered briefly and then traded back above 32 in after hours
action.
Looking ahead, the Consumer Price Index for December will be released
Wednesday at 8:30 AM ET and analysts expect a 0.2% increase in both the CPI and
the closely watched core rate.