Here’s The Fuel Nasdaq Needs For Further Gains
Just when it looked like the Nasdaq would again throw in the towel, techs
managed to bounce back Thursday enough to help the Nasdaq close comfortably
above both support at 2250 and above its 50-day moving average. A late-session
fade kept traders on edge, but the Nasdaq still booked a 1.3% gain.
Blue chips joined the Nasdaq in the green thanks in part to strength in
cyclicals, transports, and telecom. The Dow finished the day 0.4% higher while
the S&P 500 added 0.6%.
Volume lightened slightly from Wednesday’s levels, although that came as no
surprise as traders were reluctant to take on any new positions ahead of
Friday’s big employment report. Nasdaq volume was a scant 1.8 billion shares
while NYSE volume was 1.1 billion shares. Surging volume on an up day is the
fuel the Nasdaq now needs if the rally is to stay alive.
In economic news, the Chicago Purchasing Managers Index came in at 38.7 which
was slightly below the expected 38.9. The figure clearly shows that the economy
remains weak since readings under 50 are considered recessionary.
In other economic news, weekly unemployment claims rose 8000 to 419,000 which
again makes the case for additional Fed rate cuts to prop up the weakening
economy.
According to preliminary numbers, the Nasdaq rose 26.09 to 2110.59, the Dow
gained 39.30 to 10,911.94, and the S&P 500 lifted 7.76 to 1255.84.
Top sectors were biotechnology
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up 2.5%, transportation
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up 2.2%.
Of the few weak sectors, gold and silver
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larger decliners, falling 1.3%.
Oracle
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company would follow Sun Micro and issue an earnings warning. The stock appears
to have already priced in a warning since it had a nice bounce of .79 or 5% to
15.30 on heavier-than-average volume.
Alternative energy companies showed renewed vigor, with Plug Power
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up 4.49 or 15% to 33.24, Fuel Cell
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Power Systems
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In software, BEA Systems
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average with a gain of 1.68 to 35.88. Volume, however, was light.
Winners in the Internet sector were Amazon
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up 7%, and Earthlink
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Dow winners were AT&T
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up 2.0%, and Alcoa
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Dow dogs were Coca-Cola
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and Home Depot
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Looking ahead, all eyes will be on the April employment report which will be
released at 8:30 AM ET. Analysts expect unemployment to remain unchained at
4.6%, average hourly wages to increase by 0.3%, and non-farm payrolls to shrink
by 15,000 jobs.