Cowardly Nasdaq

August 2, 2000
Daniel Beighley

Despite a cooler-than-expected June housing report, stocks finished
sloppily mixed Wednesday, as the Nasdaq lost hold of its early gains and
finished down 0.7% near its lows of the day.

The Dow and S&P 500, however,
were able to stay in the green, as the Dow rose 0.7% and the S&P 500
finished up by less than a point, as money rotated out of some of the big-cap techs
and into defensive stocks.

New housing starts for June came in at 829,000, which was significantly below
the 875,000 that analysts had expected, suggesting yet again that the economy
may be cooling.

With a general uneasiness ahead of Friday’s jobs reports, most traders and
market participants were reluctant to take on large positions, and that helped
keep volume relatively light. NYSE volume was 987 million shares while Nasdaq
volume was 1.46 million shares, with each about 6% above Tuesday’s volume
levels.

“Relative strength for tech and telecom continues to disappoint.
Momentum for Nasdaq is poor and not yet oversold enough to say that any bounce
will have tenure or durability,” said John Roque, Vice President, Arnhold
and S. Bleichroeder.

“The Nasdaq bounced sharply on Monday, but the index is still weak. It’s
beneath its 50- and 200-day moving averages and looks like it works lower to our
support level or 3500/3400. Beneath 3400, we’re looking to 3042.66 which was the
May low,” he added.

According to preliminary numbers, the Nasdaq sank 27.06 to 3658.46, the Dow
added 80.58 to 10,687.53, and the S&P 500 gained just 0.6 to 1438.70.

Looking to Thursday, the June report on factory orders will be released at
10:00 AM ET, and Street estimates look for an increase of 5.3%. Then on Friday,
the much-anticipated jobs report will be out ay 8:30 AM ET.

Cowardly Nasdaq

BUY THE FEAR, SELL THE GREED

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