Blue Chips Green

The big, old-fashioned blue chips
continued to perform well Monday with cyclicals, energies, financials and even
pharmaceuticals out-pacing the recently hobbled tech and chip sectors. The Dow
and S&P 500 booked respectable gains of 0.9% and 0.5%, respectively, while
the Nasdaq faded by about 0.6%.

One positive aspect for the Nasdaq was
the fact it did cut some big losses as it fought its way back from a quick dip
below 2600 at mid-day.

Volume remained anemic and about even
with Friday’s level as 1.0 billion shares traded on the NYSE and 1.6 billion
changed hands on the Nasdaq.

“Stocks look a little tired after
the rally resulting from two Fed easings in 30 days.
The long-term picture is bright and is driven by the Fed rate cuts but a
short-term consolidation has already begun,” said Paul Rabbitt, President,
RabbittAnalytics.com.

“For long-term investors we would
accumulate right through the expected consolidation. 
For traders we might take profits and would wait for prices to decline
3-5% before venturing back into the long side,” he added.

According to preliminary numbers, the
Dow gained 101.75 to 10,965.85, the Nasdaq slipped 17.43 to 2643.07, and the
S&P 500 gained 4.84 to 1354.31.

Top sectors included oil services
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,
up 3.0%, insurance
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, up 1.8%, and chemicals
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, up
1.5%.

Weakest sectors were retailers
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,
down 1.4%, computer technology
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, down 1.5%, and semiconductors
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,
down 4.1%.

One tech winner that avoided the
Nasdaq downdraft was Openwave Systems
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, the merged combination of
Phone.com and Software.com. Openwave gained 5 7/16 to 68 5/16.

Following a three-day pullback,
WorldCom
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bounced back 1 5/16 or 6.5% to 21 3/8 in a strengthening telecom
sector.

Dow winners included Eastman Kodak
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,
up 4.3%, Honeywell
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, up 3.6%, DuPont
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, up 3.5%, and General
Electric
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, up 3.4%. The biggest dog in the Dow was Intel
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,
which fell 2.8%.

Looking ahead, traders will be
focusing on Cisco’s quarterly earnings that will be released after the close.
Analysts polled by First Call/Thomson Financial expect Cisco to earn 19 cents
per share. Cisco’s forward-looking comments will also be thoroughly scrutinized.

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