Overhead On The Street
Richard
Dickson, technical analyst, Scott & Stringfellow: "I’m
seeing a potential long-term change in leadership away from the technology
stocks and toward the value stocks and broken growth stories. You had the NYSE
make a new high this week, and not much else is even close to that. To me,
that’s just saying that a lot of the stocks that have been sitting around for a
while are starting to come back and participate. Dupont is coming out of a nice
base. Look at what Philip Morris is doing. The rail stocks are coming out of
very nice extended bases. So you’re beginning to see signs of real strength in
these long-neglected areas of the market just about the time that you’re seeing
pretty good earnings from Cisco, pretty good earnings from Applied Materials.
And what happens? They go down. You can probably make the same case for the
whole second-quarter earnings season. What’s the Nasdaq done during this whole
period of time? It’s gone down. What are you waiting for? Good earnings? Hello?
You got good earnings. And we went down. To me, that is pretty clear evidence
that we’ve certainly discounted these earnings. The question is how far forward
have we discounted earnings? I suspect it’s further forward than many people
expect.
"Technically, I like finance,
energy, capital goods, and consumer staples. As far as specific groups in
capital goods, I like aerospace, rails, truckers. In consumer staples, I like
food and soft drinks. In finance, I like property/casualty insurers such as
Allstate, regional banks, and selected money center banks. In energy, I still
like oil drilling stocks and natural gas stocks."
Terence
Gabriel, technical analyst, IDEAglobal.com: "I don’t want to see
a market in which the Dow moves up and the Nasdaq doesn’t. That would be a clear
indication of a flight to safety. The anti-technology sentiment looks based on
fear of decelerating earnings in October and again in January 2001. I think it’s
misplaced, overdone, and due to a fear of the Fed. The fact that tech stocks had
great earnings reports in July and the fact that they were sold is evidence of
the fact that the market does not have a lot of confidence in the economy moving
forward."