Good News, Bad News
After trading up a robust 4.5% at mid-day, the Nasdaq trailed off into the
close to finish at its lows of the day. The good news for the Nasdaq was that it
held on to the 2200 level for a respectable 2.9% gain, but the bad news was that
the fade looked much like it did on Feb 15, which led to more downside.
While tech led the day’s gains, the S&P 500 showed that there was some
depth to the day’s gains as it rose 1.0%. The Dow could only muster a 0.3% gain.
Volume picked up quite a bit from Monday’s anemic level, as 2.0 billion
shares traded on the Nasdaq and 1.0 billion shares changed hands on the NYSE.
Fourth quarter productivity showed a 2.2% increase which was slightly ahead
of the expected 2.0%, and January factory orders fell 3.8% which was a bigger
decline that the expected 2.2% decrease.
The weak factor orders number helps give a little more ammunition to Fed
critics that argue for another inter-meeting rate cut. Some analysts think a
weak jobs report on Friday could potentially persuade the Fed to act before
their March meeting.
"It’s a long overdue lift. It’s also corresponding to a day that I don’t
see anything as fundamental. There’s nothing really creating this lift except
for the fact that they’re tired of having them down. I think the selling
pressure has abated some, and buyers are a little bit stronger," said Tim
Heekin, Director of Trading, Thomas Weisel Partners.
"Technically we hit a really nice bottom last week in both the S&P
and the Nasdaq Comp. In the last 5 or 6 trading days it’s felt to me like we’ve
put in some small building blocks to building a base, and I would be more in the
camp that we are creating a U shaped bottom rather than a V shaped bottom,"
he added.
According to preliminary numbers, the Nasdaq gained 28.92 to 10,591.22, the
Dow added 61.49 to 2204.41, and the S&P 500 rose 12.39 to 1253.80.
Top sectors were semiconductors
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up 4.8%, and computer technology
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Weaker sectors were gold and silver
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pharmaceuticals
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down 1.6%.
Powering the SOX was Micron
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50-day moving average and gained 4.86 or 12% to 43.86. Also moving were LSI
Logic
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up 6.5%.
Among tech movers was Veritas Software
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3/4 on nearly double average volume.
Dell Computer
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and that helped Dell book the rise on 150% of average daily volume.
Dell had traded in range for the past few weeks as it clung closely to its 50-day moving average before breaking out Tuesday. The next challenge for Dell will be in taking out its recent Jan. 30 high of 28 1/8.
Dow winners were Hewlett Packard
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3.7%, and Microsoft
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falling 2.6%.
Looking ahead, the consumer credit report is due out tomorrow at 3:00 PM ET,
and analysts expect a figure of 5.3 billion.