It Hinges On This…
Federal Reserve policy makers meet tomorrow to
evaluate the economy. Some investors expect them to say the risks to the economy
are balanced between further weakness and the prospect of inflation as a prelude
to an increase in interest rates later in the year.
The S&P 500
(
SPX.X |
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PowerRating) is falling for the fourth day in five as some investors are afraid that if the Fed
hints of raising interest rates, it may slow a rebound in corporate earnings.
The first half-hour of trading had the S&P 500 trading positive, then it
reversed and headed lower and is consolidating near the lowest levels of the
day. Financial stocks including J.P. Morgan Chase
(
JPM |
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American International Group
(
AIG |
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are dropping. Wal-Mart Stores
(
WMT |
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stocks after Merrill Lynch & Co. reduced its recommended allocation for the
group.
The Dow Jones Industrial Average
(
$INDU |
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PowerRating), which has advanced five
weeks in a row, is down 46.08, or 0.4%, to 10,561.15. It has gained 5.4% this year, helped by advances of 20% or more in General Motors
(
GM |
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(
BA |
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PowerRating), manufacturers that stand to benefit most
from an economic rebound.
The Nasdaq Composite Index
(
COMPQ |
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began to make some modest gains before pulling back to currently trade at the worst levels
of the day. Stocks erased early gains that were fueled by comments from
economists at Merrill Lynch and Salomon Smith Barney, who said a
stronger-than-expected economic rebound will lift corporate profits.
April gold
(
GCJ2 |
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PowerRating) is forming a descending triangle. Support is at
290.00. April gold influences the movement of the PHLX Gold & Silver Index
(
$XAU.X |
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and some of the gold mining stocks such as Anglogold
(
AU |
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PowerRating), Barrick
Gold
(
ABX |
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PowerRating) and Newmont Mining
(
NEM |
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PowerRating).
The AMEX Biotechnology Sector
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$BTK.X |
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trading higher again this morning. If the BTK can close higher today, it will be the
fourth positive close in a row. Some of the stocks helping push the Biotech
sector higher are Affymetrix
(
AFFX |
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PowerRating), Cephalon
(
CEPH |
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PowerRating), Chiron
Corporation
(
CHIR |
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PowerRating), Genetech
(
DNA |
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PowerRating) and Medimmune
(
MEDI |
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PowerRating).
The PHLX Semiconductor Sector
(
$SOX.X |
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PowerRating)
is trading stronger today at 612.44, up 18.25. Some of the stocks pushing the
SOX are KLA-Tencor Corp.
(
KLAC |
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PowerRating), Maxim-Integrated Products
(
MXIM |
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PowerRating),
Applied Materials
(
AMAT |
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PowerRating), Linear Technology
(
LLTC |
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PowerRating) and Xilinx
(
XLNX |
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PowerRating).
The GSTI Software Index
(
$GSO.X |
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PowerRating) is
trading higher today. Some of the stocks helping push the GSO are Autodesk
(
ADSK |
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PowerRating),
Check Point Software Technologies
(
CHKP |
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PowerRating), Electronic Arts
(
ERTS |
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PowerRating),
Intuit
(
INTU |
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PowerRating), Peoplesoft
(
PSFT |
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PowerRating) and Synopsys
(
SNPS |
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PowerRating).
The AMEX Computer Technology Index
(
$XCI.X |
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is beginning to rally from a pullback from the high. Some of the stocks helping
push the Computer Technology index are Applied Materials
(
AMAT |
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PowerRating),
Computer Sciences
(
CSC |
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PowerRating), Dell Computer [DELL], Electronic Data Systems
(
EDS |
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PowerRating)
and Novell
(
NOVL |
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PowerRating).
Retek
(
RETK |
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PowerRating)
is rallying from a pullback off the high. RETK has a
TradingMarkets.com RS3 rating of 95 and an uptrending
ADX of 32.
Group One Automotive
(
GPI |
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PowerRating) is pulling back
from its high. GPI is holding a
3-month relative strength rank of 88 with an uptrending ADX of 30 from
TradingMarkets.com.
Hotel Reservations Network
(
ROOM |
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PowerRating) is
breaking out of an ascending triangle with strong volume. ROOM has a
TradingMarkets.com RS3 rating of 99 and an uptrending
ADX of 29.
Mandalay Resort Group
(
MBG |
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PowerRating) is
rallying from a pullback from the high. Support is at 30.00. MBG has a
TradingMarkets.com RS3 rating of 78 and an uptrending
ADX of 43.