More Reason To Cheer
The markets began the day mixed,
with the Nasdaq heading lower and the Dow and S&P 500 moving higher, but an
end-of-the-day rally moved all three averages to positive closes. Airline and
biotechnology stocks held the biggest gains of the day, with semiconductors and
Internet stocks suffering mild losses as a group.
The
Dow Jones Industrial Average
(
$INDU |
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News |
PowerRating) closed up 1.35% to
10,574.29.
The S&P 500
(
$SPX |
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PowerRating) closed up 1.45%
to 1,162.76.
The Nasdaq [$COMPQ |$COMPQ] closed up 1.29%
to 1,890.37.
Despite various downgrades for
stocks, positive economic news gave the markets some reason to cheer. January
factory orders rose 1.6% as inventories fell 0.6%, in line with economists’
expectations. Also released today, the Fed’s "beige book" reported
that the economy is turning up, though the labor market is still suffering.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.63, and up-volume
over down-volume by a 4.30 ratio. Nasdaq advancing issues over declining issues
came in at 1.77, and up-volume beat down-volume by a 2.28 ratio. The
VIX
was up 0.25 to 22.06. The TRIN
was down 0.72 to 0.61.
Average volume for the day saw
the Dow recapture all of yesterday’s losses and then some, the S&P 500 move
convincingly above its 200-day MA, and the Nasdaq fall just short of its 50-day
MA. The Broker/Dealer Index
(
$XBD.X |
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PowerRating), up 1.90%, finished with its
third close in a row above its 50-day MA.
Top
sectors of the day were the Biotechnology
Index
(
$BTK.X |
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Chart |
News |
PowerRating), up 5.41% at
513.69,
and the North American Telecom
Index
(
$XTC.X |
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Chart |
News |
PowerRating), up 5.36% at
696.47.
Losing
sectors of the day were the GSTI Hardware Index
(
$GHA.X |
Quote |
Chart |
News |
PowerRating), down
0.96% to 242.35, and the Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down 0.96% at 607.97.
Online retailer Amazon.com
Inc (AMZN),
up 1.50% at 16.21, announced that their Chief Financial Officer Warren Jensen
will step down. The company was made profitable over a month ago.
Computer hardware maker Hewlett-Packard
Co. (HWP),
down 1.94% at 20.20, fell after it was announced that Institutional Shareholder
Services supports the company’s proposed acquisition of Compaq Computer Corp. (CPQ),
up 4.54% at 11.06.
Drug maker Imclone Systems (IMCL),
up 20.03% at 28.59, has inked a marketing deal with Bristol-Myers (BMY),
up 3.68% at 50.21, that will run through the year 2018.
McData
(
MCDT |
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Chart |
News |
PowerRating), down 26.87% at 11.65, announced that it has
lowered its first quarter earnings expectations as it believes information
technology spending will be slower. JP Morgan has also cut its earnings outlook
for the company. To add to the negative news on the company, data
storage company Brocade Communications Systems Inc. (BRCD),
down 4.22% at 25.20, reported that the company is suing McData over a patent
infringement.
Telecom company Sprint
(
FON |
Quote |
Chart |
News |
PowerRating), up 7.28% at 15.76, said that they
were on track to meet their financial targets for 2002, though SoundView
Technology lowered its rating on the stock to Buy from Strong Buy.
Investment banker JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), up 4.66% at 34.06, benefited
from an upgrade by Deutsche Banc Alex Brown to Strong Buy from Buy, saying that
the company has a lot to gain from a strengthening economy.
Life insurance company MET Life
(
MET |
Quote |
Chart |
News |
PowerRating), up 0.24% at 32.90, was
downgraded by Merrill Lynch to an intermediate-term Neutral from Buy and a
long-term Buy from a Strong Buy, based on valuation.