Fire In The Naz
Better-than-expected earnings by Applied Materials combined with some analyst
upgrades in the chip sector to unleash a late session Nasdaq rally that took the
average up 2.6%. Blue chips lagged, however, leaving the Dow and S&P 500
down 1.0% and 0.2%, respectively.
The rally in the semis
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sectors which had been miserable for the past two weeks. It was constructive for
the SOX to bounce off of and hold its 50-day moving average.
Volume rose about 10% above Tuesday’s levels as a healthy 1.94 billion shares
traded on the Nasdaq and 1.11 billion shares traded on the NYSE.
"I think we’re pretty close to big support levels in the Composite and
the S&Ps. In the S&Ps we’re looking at 1300 even as a big number. They
got as low as 1308, but we we’re looking for 1314 and then 1300. In the Nasdaq
Comp, a big, big level that we have been eyeballing is this 2280-2290 level,"
said Tim Heekin, Director of Trading, Thomas Weisel Partners:
"We traded most of the day 100 points away from that, but I think you’re
closer to a really strong buy spot than anything. I think your downside is
minimal here. I’m focusing on names like JDS Uniphase, Cisco, and Applied
Materials as well as some of the other names in the optical space."
According to preliminary numbers, the Nasdaq jumped 63.72 to 2492.12, the Dow
sank 107.91 to 10,795.41, and the S&P 500 lost 2.91 to 1315.89.
Top sectors were semiconductors
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up 4.0%, and computer technology
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On the downside were telecom
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stocks
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Semiconductors on fire included KLA Tencor
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Materials
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up 12%.
Also surging in tech-land were Juniper
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Mercury Interactive
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up 8 3/4 to 65 1/8.
Optical networker JDS Uniphase
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Wednesday after hitting its lowest price level since Oct. 1999. JDS Uniphase
completed its merger deal with SDL Inc. on Tuesday and gained 2 3/4 to 41 3/4 on
triple its average volume.
Intel
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Big losers in the Dow were AT&T
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with each down more than 3%.
Looking ahead, the next big economic news due out is the January Producer
Price Index report which is due out on Friday at 8:30 AM ET. Street estimates
look for a PPI increase of 0.2% and a core PPI reading of 0.1%.