Nets Fire Up As Cisco Soars
Technology issues rallied again Wednesday thanks in part to positive analyst
comments about Cisco, and particularly strong were many of the beaten down
Internet-related stocks. The rally came at the expense of the blue chips, as the
Dow eased 0.2% while the Nasdaq booked a 2.4% gain. The S&P 500 finished
flat.
In economic news, March factory orders increased 1.8% which topped the 1.5%
increase analysts expected. The strong number provided yet more proof of a sound
economy and likely helped add to the bullish tone of the day.
Volume spiked up on the Nasdaq by 25%, as a hefty 2.56 billion shares changed
hands. NYSE volume was also strong, with 1.34 billion shares changing hands.
“We’re going through a rotation at this point thanks in part to some
comments by Morgan Stanley on Cisco. That’s helping some of the Nasdaq issues.
There have been some pretty decent moves out of drugs and oils and some of the
safe haven areas and into the techs,” said Scott Curtis, Senior Equity
Trader, Kaufman Brothers.
“At this point, earnings season hasn’t been as bad as people thought.
Expectations were so low that I guess there wasn’t much to do on the downside.
Pretty much every number was better-than-expected, so with low expectations
we’ve done fairly well. The Fed has been pretty aggressive, and their last move
put a lot of confidence into the market,” he added.
According to preliminary numbers, the Nasdaq rose 52.31 to 2220.55, the Dow
eased 21.66 to 10,876.68, and the S&P added a point to 1267.42.
Top sectors of the day were Internets
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broker/dealers
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computer technology
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Weakest sectors include integrated oils
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services
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Cisco
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positive comments from Morgan Stanley. That was enough to send the former market
cap king up 2.20 to 20 on more than 170% of average volume.
Cisco’s close put it back above its 50-day moving average for the first time
since December 2000.
Pacing the Internet index were CMGI
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up 10%, RealNetworks
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Small company incubator CMGI likely benefited from a strong showing by tech
IPO Simplex Solutions
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priced at 12.00. Simplex opened at 15.15 and gave new hope to the decimated IPO
market.
Top broker/dealers were Morgan Stanley
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up 5.7%, and Merrill Lynch
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Dow winners were Kodak
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Intel
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loser was AT&T
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Looking ahead, the April employment report will be released at 8:30 AM ET on Friday. Analysts expect 27,000 new jobs to have been created and also
see unemployment holding at 4.4%.