Naz Shows Pizzazz
Despite a Cisco downgrade and plenty of nervousness in the air, the Nasdaq
managed to find a wall of worry to climb that led it to a pretty nice 3.4% gain
on heavy volume after zigzagging throughout the day. Rotation out of some of the
recent winners like drugs and cyclicals kept the lid on the blue chips, but even
they notched decent days, with the Dow up 0.3% and the S&P 500 up 0.9%.
What traders really enjoyed seeing, though, was the 14% increase in Nasdaq
volume, as a hefty 2.44 billion shares changed hands. NYSE volume rose 6% above
Tuesday’s level, as 1.28 billion shares traded.
“I think the last day or two the Nasdaq has been acting very well. I
think you’re seeing a lot of bottoming action in the last few days. Even with
some bad news, the market opens up a little lower in the morning and just sort
of churns back,” said Jay Suskind, Director of Trading, Ryan Beck & Co.
“I just get a sense that hopefully in a couple of weeks we’ll look back
and say hey, in early January we really did hit a bottom, and maybe today we’re
just seeing some healthy bottoming action. Obviously the market has already
discounted the first and second quarters of ’01, and I think it’s looking toward
later in the year when, with the help of the Fed, it will be okay.”
According to preliminary numbers, the Nasdaq gained 82.93 to 2524.23, the Dow
rose 31.72 to 10,604.27, and the S&P 500 added 12.48 to 1313.28.
Top sectors were Internets
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PowerRating), up 6.4%, biotechs
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up 6.0%, and semiconductors
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Down sectors included transportation
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PowerRating), down 1.2%.
The Cisco downgrade came somewhat late in the game for a stock that is now
nearly 50 points below its all-time high from last March. It is often this type
of “throw-in-the-towel” downgrade that can sometimes mark a turning
point for a stock. Cisco did turn on the juice toward the close and finished
down just 7/8 to 36 1/4.
Tech screamers included Broadcom
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Systems
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PowerRating), which jumped 7 1/8 to 56 1/4 after some favorable analyst
coverage.
In the Dow, AT&T
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telcos, rising 2.7% to its highest level in two months. Dow winners also
included J.P. Morgan
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Citigroup
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PowerRating), up 3.3%. GM
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PowerRating) was the weakest Dow stock, falling 2.6%.
Looking ahead, traders will be watching for the weekly jobless claims that
are due out Thursday at 8:30 AM ET. The number has been trending upward sharply
in recent weeks, and last week’s total was 375,000 . If the number tops last
week, stocks could get a little more lift.