Marder’s Market Brief
The
much-anticipated unraveling of positions in the technology sector was
set in motion Tuesday after a morning rebound fell on deaf ears, saddling
computer-related issues with their worst pasting in over four months.
Interestingly, Treasurys weren’t to
blame: The March bond contract gained 11/32 for only its second rise in 10
outings. Moving bonds: month-end buying as portfolio managers adjust their
portfolio durations to reflect changes in bond indexes.
The action in bonds was nice, given a
bearish uptick in the Chicago purchasers’ prices-paid subindex and in light of
the important national purchasers’ survey being just a day away. But Treasurys
were very oversold and were due for some kind of snapback. Thus, the outlook for
bonds remains cloudy, made worse by decaying financial and utility
stocks.
As for the Nasdaq Comp, the session
marked the second straight day of distribution, or selling by institutional
investors. Little progress or an outright decline in a major average following a
substantial ascent, when accompanied by increased turnover, is symptomatic of
distribution. It was the worst percentage fall in the Comp in over six
weeks.
Stocks of
note: AOL sank 8% on volume 17% above its norm — the stock had run
up about 115% since Sept. 21…eBay lost just 3% on volume about 40% less than
average as it pulled back to a point just above the top of its recent 10-week
base — it was the top performer among blue-chip cybernames…Amazon lost 6% on
volume 6% less than the average…RealNetworks came down 10% on
slightly-below-average volume…Microsoft was the best actor among the benchmark tech set, inching up 55/64 to 91 12/256…other stocks to buck the red tide: Allaire, up 13 7/8 to 151 7/8; Commerce One, 5 1/2 richer to 329 1/4; InterVu, 4 11/16 better at 62 1/4; Open Market, 1 7/8 higher at 36 13/16; 800 Travel, 1 1/4, or 37%, to 4 5/8; Novellus, up 1 1/8 to 82 1/8; and Lam, rising 1 11/16 to 77 5/8…The brokers were a plus, up 1.6% as a group — names like Merrill, DLJ, Morgan Stanley, and Lehman rose on volume heavier than on any session in the last six or eight days.
In all, Tuesday’s session was one whose
time had come. It should be viewed as necessary — and healthy.