Can The Markets Rally Without The Semis?

June 10, 2003
Vincent Mao

Stocks
are modestly higher this midday.Â Despite Nokia’s warning of lower
hand-set sales and a downgrade of the semiconductor issues, the major indices
are staging a modest rally. The Dow has already recouped about half of
yesterday’s 82-point loss, thanks to upgrades in Boeing
(
BA |
Quote |
Chart |
News |
PowerRating) and positive
comments on Mcdonalds
(
MCD |
Quote |
Chart |
News |
PowerRating). Some of the leaders in the prior rally are
leading again, housing, broker/dealers, and paper stocks are on the rise again.
However biotechs, Internets, and semis are missing in action.Â Stocks also got a
boost after a survey by Blue Chip Economic Indicators which forecast growth of
3.5% in the third quarter and 3.7% in the fourth quarter. Fed Chairman will be
speaking today, traders will be paying closer attention to any hints of a
25-basis point rate cut. Bonds are up strongly today while gold is slumping. The
dollar is slightly higher.Â

In economic news, Bank of
Tokyo/Mitsubishi/UBS index of chain-store sales declined 0.3%.Â Â

The 10-year U.S. Note
isÂ +215 at 120 105.

The dollar is +0.23 at
93.61.

Gold is -9.90 at 352.70.

Crude OilÂ -0.33 at
31.12.

Volume is at 645,000,000
on the NYSE, and at 962,000,000 on the Nasdaq.

Market breadth is positive,
with NYSE advancing issues over declining issues by a ratio of 2.01, and up
volume over down volume by a 2.18 ratio. Nasdaq advancing issues over declining
issues at 1.42, and up volume over down volume is at a 1.94 ratio.

Top Dow stocks are:

Stocks in the news:

Boeing
(
BA |
Quote |
Chart |
News |
PowerRating) is higher
by 2.5% after Banc of America Securities upgraded the stock from “neutral” to
“buy.” BofA upgraded the Dow component based on the belief of increased
production in 2004. The firm also raised their target price from $28 to $45.

Countrywide Financial
(
CFC |
Quote |
Chart |
News |
PowerRating)
is fractionally higher after the company report some very positive highlights
from operations. First, the company’s loan pipeline closed at a record $74
billion on May 31st, up $15 billion from March 31st. Loan fundings drew near $40
billion. And average daily applications reached an all-time high of $3.2
billion, up 40% from last month.Â

NBTY
(
NBTY |
Quote |
Chart |
News |
PowerRating) is
higher by 15% on heavy volume. The company announced that it will buy
nutritional supplement maker Rexall Sundown from Royal Numico N.V. from $250
million cash.Â

Penn National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating)
is higher by 6.5% on heavy volume. The company raised its second quarter
estimates to 38 cents a share from 33 cents a share. However Penn lowered its
full-year estimates to $1.32 a share from $1.34 due to higher taxes.Â Â

Nokia
(
NOK |
Quote |
Chart |
News |
PowerRating) is lower
by 2.7%. One day after rival Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating) lowered its forecast, Nokia did
the same. Nokia expected sales of hand sets to come in at the low end of
estimates. However the company expects second-quarter results to meet guidance
of 13 – 16 Euros. The company blamed SARS, the weak economy, and the weak
dollar.Â

Vincent Mao

Can The Markets Rally Without The Semis?

BUY THE FEAR, SELL THE GREED

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