How About A Full Point?
Stocks rallied
sharply on the eve of one of the most greatly-anticipated Federal Reserve rate
cuts in recent years. Analysts are divided on whether Greenspan will go with 50
or 75 basis points, but either way, stocks rallied into the close with the Dow
ending up 1.4%, the Nasdaq up 3.2%, and the S&P 500 up 1.8%.
While the
late-session strength was likely short covering ahead of the Fed, some sectors
like semis and telecom continued to hold up well in longer-term bases.
Volume was light
as just 1.77 billion shares traded on the Nasdaq, and 1.12 billion shares traded
on the NYSE.
“There are some things that have
not yet happened which would make the likelihood of a low/turn better. Things
like capitulative-type volume or a major sell-side analyst throwing
in the towel and switching from bullish to bearish,” said John
Roque, Vice
President, Arnhold and S. Bleichroeder.
“Also
positive would be a daily reading of 400 or
more new lows on Nasdaq, but most importantly, stocks and indexes to stop going
declining. A bounce can occur at any time, but every syllable uttered about a
bottom or a low is superfluous until stocks and indexes stop falling,” he
added.
According
to preliminary numbers, the Dow rose 135.70 to 9959.11, the Nasdaq added 60.53
to 1951.44, and the S&P 500 rose 20.32 to 1170.85.
Top
sectors included biotechnology
(
$BTK.X |
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(
$SOX.X |
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up 6.7%, broker/dealers
(
$XBD.X |
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(
$GIN.X |
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up 4.8%.
On
the downside were insurance
(
$IUX.X |
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(
$XAL.X |
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down 1.4%.
Tech
standouts included Qualcomm
(
QCOM |
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heavier than average volume, and Juniper Networks
(
JNPR |
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PowerRating), which added 5 3/8
to 58 7/16.
WorldCom
(
WCOM |
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PowerRating) added 1 1/16 to 18 1/2 to its highest close in over a month.
Adobe
Systems
(
ADBE |
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PowerRating) added to Friday’s gains with a solid 3 3/16 rise to 31 13/16
on heavier-than-average volume. Adobe has been on a roll since it crushed
earnings estimates last Thursday.
Leading
the SOX were Rambus
(
RMBS |
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(
TER |
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PowerRating), up 11%, Altera
(
ALTR |
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up 9%, and KLA-Tencor
(
KLAC |
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PowerRating), up 8%.
Dow
winners included General Motors
(
GM |
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(
DD |
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Boeing
(
BA |
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PowerRating), up 4.2%, and Hewlett Packard
(
HWP |
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PowerRating), up 9.1%. Dow losers were
Intel
(
INTC |
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PowerRating), down 2.9% and Philip Morris
(
MO |
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PowerRating), down 2.0%.
Looking
ahead, the long-awaited Fed meeting takes place on Tuesday and the call on
interest rates will be released at 2:15 PM ET.