Here’s Where The Internal Strength Is…

June 10, 2002
Daniel Beighley

Price action for the major indexes drifted higher for most
of the day, but fell to selling pressure in the closing hour. The biggest
advances were in airlines, pharmaceuticals, retail, healthcare, and
biotechnology. The biggest decliners were gold and silver, oil service, and
Internet.

Closing below its 50-day moving average, the Gold and
Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), down 4.54%, carried over Friday’s momentum as
it continues to pull back from an impressive uptrend. With Gold Futures
(
GCQ2 |
Quote |
Chart |
News |
PowerRating), up 0.20 at 319.70, the sector still has internal strength and may
be poised for a reversal in this zone. This sector is used by many as a
defensive instrument from a weakening dollar, which is the focus of Tony
Crescenzi’s newest article.

U.S. Treasury Bonds were
up 14 at 102 ’12.

There was no economic data released today. On Wednesday,
the Fed’s "beige book" data will come out.

Market breadth was mixed,
with NYSE advancing issues over declining issues by a ratio of 1.05, and up–volume
over down–volume
by a 1.04 ratio. Nasdaq declining issues over advancing issues came in at 1.20,
and down–volume
beat up–volume
by a 1.57 ratio. The
VIX
was down 0.50 at 26.15. The TRIN
was down 0.42 at 0.81.

Chip maker Intel Corp.
(
INTC |
Quote |
Chart |
News |
PowerRating), down 4.22% at 21.07, failed to
close positive after being upgraded by First Albany to "strong buy"
from "buy" on the belief that the company was overly conservative in
its earnings outlook.

Energy trader Williams Companies (WMB),
down 1.26% at 8.59, has reduced its 2002 earnings forecast to $1.35 – $1.70 a
share from $2.15 – $2.30 a share. The company said it intends to cut back on its
energy risk management services.

Medical equipment and
supplies company Baxter International (BAX),
up 1.98% at 51.40, has agreed to buy the majority of Wyeth (WYE),
up 2.09% at 54.13, for $305 million. The deal will not affect Baxter’s
earnings for 2003, though will add revenue for 2004.

Scientific and technical instrument company
Danaher Corp. (DHR),
down 4.45% at 66.46, was cited in Barron’s as being potentially
overvalued in comparison to its competitors in relation to P/E levels. Company
insiders have also sold shares in the past 15 months.

Biotechnology and drug company De Code
Genetics Inc. (DCGN),
up 1.07% at 3.76, is scheduled to release
on Monday the
clearest picture to date of the human genome. This will give scientists a better
edge in developing medicines.

Gold mining company Newmont Mining Corp. (NEM),
down 2.09% at 28.10, said it will reach its debt-reduction target twice as fast
as initially anticipated due to an increase in gold prices.

Here’s Where The Internal Strength Is…

BUY THE FEAR, SELL THE GREED

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