Can Nasdaq Muscle Into May?

April 30, 2001
Daniel Beighley

Stocks ended the month mixed with biotech and semiconductors helping the
Nasdaq rise 2.0% while weakness in transports, retailers and financials pulled
the Dow and S&P 500 down 0.7% and 0.3%, respectively.

With its Monday gain, the Nasdaq notched a solid 18% gain for the month and a
more than 30% gain from its intraday low on April 4. In terms of technicals, the
Nasdaq closed just over 100 points above its 50-day moving average.

Volume was moderate with 1.96 billion shares changing hands on the Nasdaq and
1.22 billion shares trading on the NYSE.

In economic news, personal income for March showed a 0.5% increase while personal spending increased 0.3%. Both figures
came in as expected.

“Markets were mixed last week as the reality began to
sink in that the economy is going to recover. GDP
growth was surprisingly strong in the first quarter.
However, inflation seems to be still a factor. Energy prices are
annoyingly strong and the all-important GDP price deflator surprised everyone as
it came in above consensus at 3.3 percent in the quarter,” saidÂ said
Paul Rabbitt, President, RabbittAnalytics.

“As contrarians, we find bonds very attractive here.
Everybody hates the bond. Bullish
sentiment has plunged from 80 to 30%. We
are intrigued by rising bond yields. Why
take the risk of an overbought/ over valued stock market when you can get 5.8%
on long bonds, up from 5.25% in March,” he added.

Looking ahead, the March construction spending and the March factory orders
will be released at 10:00 AM ET. Analysts expect a 0.2% increase in construction
spending and a 1.3% rise in factory orders.

Can Nasdaq Muscle Into May?

BUY THE FEAR, SELL THE GREED

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