Reasons For Upside Bias Monday

June 7, 2002
Daniel Beighley

The markets opened sharply
lower today, then established uptrends after the first fifteen minutes that
lasted into the close for an impressive recovery. The biggest winners were oil
service, healthcare, Mexico, chemical, and telecoms. The biggest losers were
gold and silver, semiconductors, computer hardware, and biotechnology.

U.S. Treasury Bonds were
down 19 at 101 ’30.

In economic news, the unemployment
rate for May came in at 5.8% vs. April’s 6%, which was below the projected
consensus of 6.1%. Also, wholesale sales increased to 1.6% in April, with
inventories declining 0.7%.

Market breadth was mixed,
with NYSE advancing issues over declining issues by a ratio of 1.31, and up–volume
over down–volume
by a 1.09 ratio. Nasdaq declining issues over advancing issues came in at 1.01,
and down–volume
beat up–volume
by a 1.10 ratio. The
VIX
was down 0.76 at 26.70. The TRIN
was down 1.26 at 1.23.

Heavy volume had the
Dow, S&P 500, and Nasdaq closing at the top of their daily ranges.

JP Morgan downgraded semiconductor stocks Intel Corp. (INTC),
down 18.51% at 22.00, Advanced Micro Devices (AMD),
down 7.54% at 9.81, and Nvidia (NVDA),
down 0.95% at 32.30, to market perform from long-term buy. This stems from
Intel’s earnings warning.

Also in the semiconductor sector, RF Micro Devices
(
RFMD |
Quote |
Chart |
News |
PowerRating), down
33.59% at 10.12, reduced its earnings and revenue forecasts for its current
quarter due to delayed orders. The stock hit a 52-week low.

Conglomerate Tyco International (TYC),
down 30.82% at 10.10, may face charges of income tax evasion and keeping false
books and records if it is found that company money was used to pay for personal
property, according to a report in the Wall Street Journal

Biotech firm Biogen Inc. (BGEN),
down 11.61% at 42.16, has lowered its earnings outlook for the second quarter
and full year due to slow U.S. sales and wholesalers cutting inventories of
their drug Avonex.

Also in the biotechnology sector, Imclone Systems
(
IMCL |
Quote |
Chart |
News |
PowerRating), up
14.05% at 8.44, managed to rise despite being the focus of negative attention as
the SEC and Congress investigates the company’s former CEO. Entrepreneur Martha
Stewart is also being looked at for her sale of Imclone shares days before the
FDA denied a drug application that sent shares tumbling.

Healthcare facilities company Tenet Healthcare (THC),
up 2.07% at 74.82, is speculated by Lehman Brothers to preannounce better-than-expected
earnings for its May quarter based on stronger commercial pricing trends and
better-than-expected operating margins.

Computer services company Perot Systems (PER),
up 9.76% at 14.16, said that it has received a subpoena from California’s
Attorney General in reaction to a state lawmaker’s accusations of helping energy
traders manipulate prices.

Reasons For Upside Bias Monday

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources