Star Of The Day

March 21, 2002
Daniel Beighley

The Dow and the S&P 500
traded in tandem as they plunged on the opening bell, found intraday bottoms by
12:30 p.m. ET, then rallied into the close. The Dow ended slightly down, with
the S&P 500 slightly up. The Nasdaq was the star of the day as it moved
sideways in choppy trading for the early part of the session, then pulled out an
impressive rally for gains into the close. Biotechnology, Internet, and
networking stocks notched in the biggest gains, as forest and paper,
transportation, and retail led the red.

Key economic data released
today inspired fear in the early part of the session, with the Philadelphia
Fed Index’s manufacturing component sliding to 11.4 in March, down from a
reading of 16 in February, and well below the expected level of 18. Elsewhere in
economic news, the Consumer Price Index rose 0.2% for the month of
February, in line with expectations. And initial
jobless claims fell 12,000 for the week ending March 16 to a seasonably
adjusted 371,000. Analysts were expecting 374,000 claims.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.11, and up-volume
over down-volume by a 1.12 ratio. Nasdaq advancing issues over declining issues
came in at 1.59, and up-volume beat down-volume by a 4.28 ratio. The
VIX
was down 0.75 to 19.98. The TRIN
was upÂ 0.22 to 0.99.

Average volume on the NYSE and
below average volume on the Nasdaq sent the Dow and the S&P 500 below their
trading ranges to touch their 20-day MAs, though both closed at the top their
daily ranges; and the Nasdaq moved off its 20-day MA to recover all of
yesterday’s losses. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), up 2.70%,
rallied off its 20-day MA. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up
0.02%, remained in its current consolidation and closed at the top of its range
in a “doji” formation.

Biotechnology company Protein Design Labs Inc.
(PDLI),
up 21.83% at 18.30, announced that its psoriasis drug Zenapax Phase II showed no
benefit, though Morgan Stanley has upgraded the stock claiming the news clears
up the month–long
issue, creating an opportunity to enter. Concurrently, UBS Warburg cut its price
target to $20 from $40, citing that this
is the company’s third disappointment since December.

Software maker PeopleSoft Inc. (PSFT),
up 1.41% at 36.56, is the subject of a Wall Street Journal article
that reports the company’s dealings with Momentum Business Applications has
created questionable accounting practices.

Conglomerate General Electric
(
GE |
Quote |
Chart |
News |
PowerRating), down 3.47% at 37.45, fell after
comments from Bill Gross, the manager of the world’s biggest bond fund, said the
company had too much debt and was not being up front with investors.

Media giant AOL Time Warner
(
AOL |
Quote |
Chart |
News |
PowerRating), down 2.18% at 24.65, fell after
being downgraded by Lehman Brothers, who claimed the company still faces
challenges in a difficult advertising market.

Computer maker Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating), down 2.60% at 24.27, was
downgraded by J.P. Morgan who said second quarter earnings will suffer from
higher equipment costs and a $100 price boost for its IMac machines.

Irish pharmaceutical company Elan Corporation
(
ELN |
Quote |
Chart |
News |
PowerRating), up 1.42% at
14.20, is back in the news today as the Food and Drug Administration granted
marketing approval for its pain drug Avinza.Â Â

Star Of The Day

BUY THE FEAR, SELL THE GREED

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