How Momentum May Affect Tomorrow’s Open
Price
action on the major indexes established downtrends early
in the session, leveled out mid-day, then made an attempt to rally in the
afternoon, though sold off again to the close. The only index to close positive
was the Japan Index, while gold and silver, Internet, semiconductors, and
airlines had the heaviest losses.
Closing at the bottom of its
daily range, the Semiconductor Index
(
$SOX.X |
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PowerRating), down 5.20%, made
its lowest close since December of 1998, and the Broker/Dealer Index
(
$XBD.X |
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down 2.28%, closed at a level not seen since last October. The momentum here
looks to carry over into tomorrow’s open.
The
Dow Jones Industrial Average
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$INDU |
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S&P 500
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$SPX |
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(
$COMPQ |
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closed down 3.27% at 1357.81.
U.S. Treasury Bonds were
up ’25 at 103 ’23.
In economic news, auto sales were reported. June profits
reported by Ford Motor
(
F |
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PowerRating), up 1.54% at 15.76, fell 11% compared to the
year earlier on decreasing demand for its products. Rival General Motors
(
GM |
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PowerRating), down 0.62 at 50.50, said that their sales rose 4% for the month.
Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 3.11, and down
volume over up volume by a 7.33 ratio. Nasdaq declining issues over advancing
issues came in at 3.02, and down volume beat up volume by a 6.79 ratio. The
VIX
was up 3.08 at 33.64. The TRIN
was up 0.49 at 2.61.
Above-average volume
carried the Nasdaq to a low not seen since June of 1997.
The top sectors of the
day were the
Japan Index
(
$JPN.X |
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PowerRating),
up 0.41% at 112.29.
Losing
sectors of the day were the Gold and Silver Index
(
$XAU.X |
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PowerRating),
down 6.55% at 70.27, and the
GSTI Internt Index
(
$GIN.X |
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PowerRating)
down 5.44% at 64.27.
Conglomerate Vivendi
(
V |
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PowerRating), down 20.89 at 17.76, was back in the
headlines again as questions over the company’s accounting practices arose. The
stock’s debt status was also downgraded to “junk” status by Moody’s.
Personal products maker Estee Lauder
(
EL |
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PowerRating), down 8.70% at 32.50,
fell after it announced that earnings for fiscal 2002 will come in at the low
end of expectations.
Conglomerate Tyco International
(
TYC |
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PowerRating), down 8.00% at 12.65, gained
$4.6 billion from its sale of CIT Group, though was expected to earn $5 billion
to $5.8 billion on the deal.
The software sector was hit with negative news as Advent Software
(
ADVS |
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PowerRating),
down 29.73% at 17.04, and Rational Software
(
RATL |
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PowerRating), down 1.34% at
7.35, warned they would earn less than expected for the quarter. .
Banks Citigroup
(C),
down 2.72% at 37.44, and J.P. Morgan (JPM),
up 0.64% at 31.22, were reported by the Wall Street Journal to be
vulnerable to a law that will allow the Manhattan D.A. to prosecute it over its
dealings with Enron. New York’s 1921 Martin Act poses a potentially bigger
threat than the current SEC probe, and was used to prosecute Merrill Lynch.
Drug maker First
Horizon Pharmaceutical (FHRX),
down 80.6% at 3.51, has warned that its second-quarter earnings will come in
between 0 cents and 2 cents a share vs. the Multex consensus of 8 cents a share.
The company has also lowered expectations for the rest of the year.
Also in the pharmaceutical sector, AstraZeneca
(AZN),
down 3.35% at 38.66, is vulnerable to the FDA’a approval for Ivax Corp (IVX),
down 5.72% at 10.05, and Teva Pharmaceutical’s (TEVA) to make a
generic version of its hypertension drug Zestril.
From TM’s proprietary Implosion
List, healthcare facilities company Dianon Systems
(
DIAN |
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PowerRating), down
3.68% at 34.99.