Mixed Bag

August 1, 2000
Daniel Beighley

Despite economic news that showed more evidence of a cooling economy, stocks
turned in a mixed day Tuesday, with the Nasdaq sinking 2.2% and the Dow and
S&P 500 rising 0.8% and 0.5%, respectively.

The National Association of Purchasing Managers index came in at 51.8 which was lower than the expected 52.4, and new construction
spending fell 1.7% after a 0.2% increase had been expected.

Volume lightened by about 10% from Monday’s levels, as 1.33 billion shares
traded on the Nasdaq and 919 million shares changed hands on the NYSE. Traders
commented that the day’s action was orderly and fairly quiet, and that it would
likely remain that way until Friday’s employment report.

"I think that the crack in the last couple of weeks in the technology
sector renders a lot of the leading technology stocks questionable in the medium
term. They’re oversold short-term and in a position for a temporary
rebound," said Phil Roth, Chief Technical Market Analyst, Morgan Stanley
Dean Witter.

"Yesterday was the first day they tried to bounce, and it wasn’t very
impressive. Today they’re backing off again. I think if this sector doesn’t make
it, and if this sector weakens again, it’s going to be a big drag on the rest of
the market. For the short run, I give some bounce the benefit of the
doubt," he added.

According to preliminary numbers, the Nasdaq fell 81.49 to 3685.50, the Dow
gained 84.97 to 10,606.95, and the S&P 500 added 7.27 to 1438.10.

Looking ahead, the index of leading economic indicators and the new home
sales for June will be released on Wednesday at 10:00 AM ET. Street estimates look for a flat
reading on the index of leading economic indicators and 875,000 new home sales.

Mixed Bag

BUY THE FEAR, SELL THE GREED

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