Hitting A 19-Year High

May 30, 2002
Daniel Beighley

The
markets underwent whipsaw action as the major indexes gapped lower on
the open, rallied for the first hour and a half, then sold off to new lows,
before rallying in the final two hours to close at the top of their ranges.
Leading the charge were computer hardware, healthcare, Internet, and
biotechnology issues, with the losers’ column dominated by semiconductors,
networking, gold and silver, and broker/dealers.

U.S.
Treasury Bonds were up 13 at 102 ’14.

In economic news, the dollar
continued to raise fears over U.S. recovery as it hit its six-month low
against the yen. Also, initial jobless claims
fell to 410,000 for the week ending May 25, down from the level of 422,000
claims. The number of people receiving unemployment benefits has risen to its
highest level in more than 19 years.

Market
breadth was mostly negative, as NYSE declining issues beat advancing
issues by a ratio of 1.13, and down volume dominated up volume by a 2.16 ratio.
Nasdaq declining issues over advancing issues came in at 1.06, though up volume
beat down volume by a 1.10 ratio. The
VIX
was down 0.07 at 22.96. The TRIN
was up 0.38 at 1.93. The divergence with Nasdaq volume
may be a precursor to an advance tomorrow.

Below-average
volume moved the Dow to close above its
200-day MA in a "doji" formation, and the S&P 500 and Nasdaq
closed a th the top of their ranges though still below their 20-day MA’s. The
Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), up 0.08% at 480.49%, closed in a
"doji" formation , still below its major moving averages. The
Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 1.94%, closed at the bottom
of its range below its major moving averages.

Software giant Microsoft Corporation (MSFT),
up 1.13% at 52.64, is reported by the Wall Street Journal to be in talks
with the SEC over allegations that the company artificially altered financial
results to satisfy Wall Street demands for steady profit growth.

Also in the software sector, SeaChange
International (SEAC),
down 15.11% at 8.82, said that it will delay its earnings release for the
quarter ending April 30 due to a jury verdict against it in a patent suit by
nCube Corp.

Tobacco company Philip Morris (MO),
up 1.01% at 56.58, has announced that it will merge its Miller Brewing division
with South African Breweries to become the world’s second-largest brewer. The
deal is worth $3.6 billion in stock, and $2 billion in Miller’s debt.

One of the worst performers for the day was Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating),
down 28.51% at 16.70, as several brokerages cut their rating on the stock based
on slowing sales of flat panel displays.

Retailer Costco Wholesale Corp. (COST),
up 2.23% at 39.32, reported that it earned 28 cents a share for the fiscal
third-quarter, beating analysts by a penny. The company’s year-ago earnings were
23 cents a share.

Restaurant company Panera Bread Co. (PNRA),
down 4.33% at 62.72, posted earnings of 35 cents a share for the first-quarter,
beating the analyst consensus by 3 cents.

Hitting A 19-Year High

BUY THE FEAR, SELL THE GREED

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