Five Reasons For This Explosive Rally

December 5, 2001
Daniel Beighley

The
major indexes soldiered north today, with the Dow breaking and
closing above its 10,000 barrier, and the Nasdaq breaking and closing above its
2,000 barrier. The rally was a broad-based, technology-led move, with health and
drug sectors kept in the red.

News wise, the markets were lifted on yesterday’s
comments from Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), up 5.16% to 21.579, and Oracle’s
(
ORCL |
Quote |
Chart |
News |
PowerRating) up 9.86% to 15.161, reflecting an optimistic outlook for the future.
The National Association
of Purchasing Management reported that its non-manufacturing business index rose
10.7 points from last month to 51.3. Analysts were looking for a level of 43.
Any number over 50 suggests expansion. Giving a boost to oil stocks, Russia said
it will cut its oil exports by about 5% next year in response to pressure from
OPEC to comply with world-supported prices. Russia is the world’s number 2 oil
producer.

Overall
NYSE volume was 1,738,292,000.
NYSE advancing issues were 2,064,
with up volume at 1,460,518,000;
declining issues were 1,102,
with down volume at 272,034,000.
Overall Nasdaq volume was 2,735,531,000.
Nasdaq advancing issues were 2,420,
with up volume at 2,386,779,000;
declining issues were 1,274 with
down volume at 330,467,000.
The VIX
was down 0.54 to 24.79. The TRIN
was down 0.30 to 0.34. Heavy volume on the session
saw the Dow and the S&P 500 come just shy of their 200-day MAs, and the
Nasdaq take an affirmative foothold above its 200-day MA. Today was clearly an
upside dominated day of broad participation and assertiveness by the bulls. Such
an explosive move was anticipated, as discussed in This
Week’s Battle Plan.

Number 2.
auto maker Ford Motor Co.
(
F |
Quote |
Chart |
News |
PowerRating), down 4.74%
to 16.90, announced its
fourth quarter earnings would come in at less than expected at a loss of 50
cents a share. Previous estimates were for a loss of 28 cents.

Media giant
America Online
(
AOL |
Quote |
Chart |
News |
PowerRating), up 2.88%
to 35.75, today announced that CEO Jerry Levin will retire.

Specialty retailer AutoZone,
Inc.
(
AZO |
Quote |
Chart |
News |
PowerRating), up 18.79% to 79.10, reported profits that beat
analysts’ expectations by 27%. The company which sells replacement car and truck
parts claims a faltering economy creates demand from people who want to keep their
old cars in good shape rather than buy new ones.

Oil and gas operations company
EOTT Energy Partners, L.P.
(
EOT |
Quote |
Chart |
News |
PowerRating), up 18.79% to 14.38, announced that it
had no relations with Enron. Â

Medical equipment and supplies
company PolyMedica Corporation
(
PLMD |
Quote |
Chart |
News |
PowerRating), fell 23.07% to 18.74, after
announcing that it was being investigated by the Securities and Exchange
Commission.

Software
giant Oracle

(
ORCL |
Quote |
Chart |
News |
PowerRating),
rose 9.86% to 15.161 after CEO
Larry Ellison said the current recession will end in 2002 and his company is
well positioned to increase its profits.Â

Five Reasons For This Explosive Rally

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