Out Of Semis, Into Biotechs

  • July 5, 2000
  • Loren Fleckenstein

Money rotated
Wednesday into the tradable biotech, drug, and consumer
funds after earnings warnings and bearish analyst comments
chased cash out of semiconductor and software stocks.

Salomon Smith
Barney downgraded the semiconductor sector. Computer
Associates and BMC Software came out with earnings warnings.

Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating)
climbed 2.9%, breaking out of a cup-with-handle on nice
volume pickup. This is healthy action, coming above the
HOLDR’s mid-level of 179 and 50-day moving average.

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Its cousin, the
Pharmaceutical HOLDR
(
PPH |
Quote |
Chart |
News |
PowerRating), moved 1.6% to a new high.

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The Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) pulled higher, gaining 1.0% but closing below its
50-day moving average.

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Consumer Staples
SPDR
(
XLP |
Quote |
Chart |
News |
PowerRating) rose to its eighth straight gain, a sure
defensive sign in these times of a slowing economy and
concerns over earnings.

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On the downside,
the Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) gapped down 7.8% on huge
volume and closed in the bottom half of the session range.
It was the biggest loss among the exchange-traded funds.

face=”arial, helvetica” size=”2″>It was a bad day for the
tradable tech funds. The Dow Jones Technology Index iShares
(
IYW |
Quote |
Chart |
News |
PowerRating) lost 4.5%, the Internet Infrastructure Internet
HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) 4.3%, the Nasdaq 100 Index Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating)
4.1%, the Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating) 3.8%.

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