Is The Market Smarter Than Greenspan?

January 11, 2002
Daniel Beighley

The
markets spent the first half of the session wavering in a narrow
range until comments from Fed Chairman Alan Greenspan sent the indexes down for
losses into the close. Healthcare and biotechnology stocks represented the
strength of the day, while oil service, airline, retail, and technology stocks
were the weakness.

The economic highlight of the
day came from Greenspan’s comments that the U.S. economy may not be experiencing
the quick economic recovery than many have anticipated. As stated,
“significant,” near-term risks may overshadow signs of a rebound.

Elsewhere on the economic
front, the Labor Department reported that the producer price index for finished
goods declined by 0.7%, compared to the 0.2% anticipated by analysts polled by
Thompson Global Markets, and the 0.6% fall for the previous month. The figures
indicate inflation is not a concern for the U.S. economy.

Overall
NYSE volume was 1,191,695,000.
NYSE advancing issues were 1,240,
with up volume at 349,410,000;
declining issues were 1,894,
with down volume at 818,379,000.
Overall Nasdaq volume was 1,391,538,000.
Nasdaq advancing issues were
1,515,
with up volume at 421,491,000;
declining issues were 2,105 with
down volume at 1,153,868,000.
The VIX
was up 0.85 to 23.98. The TRIN
was up 0.29 to 1.53.

Below-average volume on the
session finished with the Dow and the S&P 500 below their 200-day MAs, and
the Nasdaq above. As the Dow and the S&P 500 challenge their lower trend
line, the Nasdaq may be in the process of filling out a handle formation, or
topping out. Those who follow volatility in the market are on the watch for a
major move in either direction. Those of you who missed Larry Connors’ live TraderTalk workshop, “Market
Timing Using The VIX,” can check out his lesson
today.

The world’s second biggest car
maker Ford Motor Co.
(
F |
Quote |
Chart |
News |
PowerRating), up 1.37% to 15.50, announced a
restructuring plan that includes at least 22,000 layoffs and closing five North
American plants over the next decade. The company expects to boost profits by $9
billion over the next few years, and will take a $4.1 billion charge in
restructuring costs. Shares of competitor General Motors
(
GM |
Quote |
Chart |
News |
PowerRating) fell 0.62% to
49.76.

Retailer Sears Roebuck and
Co.
(
S |
Quote |
Chart |
News |
PowerRating), down 0.70 to 51.37, was upgraded by Morgan Stanley to Outperform
from Neutral, claiming its efforts to cut costs will boost its earnings.

Chip maker Rambus
(
RMBS |
Quote |
Chart |
News |
PowerRating),
up 5.01 to 9.02, said Thursday afternoon that net income fell 53% though was
better than analysts had expected. Revenue was down 28%, and contract revenue
declined 61%.

Biotech company Igen
International
(
IGEN |
Quote |
Chart |
News |
PowerRating), up 11.32% to 42.40, was awarded a $505 million
charge from a lawsuit it won against a division of Roche Holding for a licensing
agreement.

Book and music retailer Borders
Group
(
BGP |
Quote |
Chart |
News |
PowerRating), up 3.39% to 21.04, raised earnings for guidance for the
fourth quarter. The company said that holiday sales for its superstores were up
5.1%.

Finnish mobile-equipment maker Nokia

(
NOK |
Quote |
Chart |
News |
PowerRating), down 1.30 to 22.81, announced that it will sell phones encased in
precious metals and other luxury materials with a new subsidiary called Vertu.

Is The Market Smarter Than Greenspan?

BUY THE FEAR, SELL THE GREED

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