Stunning Reversal
Following a mid-day tech meltdown that took it down nearly 4%, the Nasdaq
pulled off a stunning late-day reversal and gunned it into the close for a 1.4%
positive finish. The rally was a welcome relief for technology stocks that were approaching what felt like the abyss.
The S&Ps joined in the bounce as they successfully retested last Friday’s
lows before charging into the close along with the Nasdaq for a positive close
of 0.1%. The Dow ended down 0.4% and was weighed down by sagging telecoms.
Volume picked up a bit over Wednesday’s levels as 2.2 billion shares traded
on the Nasdaq and 1.2 billion shares traded on the NYSE.
At its Thursday low, the Nasdaq was nearly 38% below its 200-day moving
average, which puts it almost at as crazy an extreme as last March 10th’s
high-wire level of 5132.52 was to the upside. At it’s March 2000 high, the
Nasdaq was nearly 38% above its 200-day moving average. All we need now is a
little reverting to the mean, and that would give us that oversold bounce that
technology players are looking for.
“I think the market is still reacting to the fact that there was a
belief out there which was spun well by the media that Greenspan would pre-empt
as he did in January and look to steer the Fed toward lowering rates before the
March meeting,” said Louis Parks, Director of Listed Trading, Raymond James
Financial.
“That clearly didn’t happen, and nor should the market really have felt
it would happen. I think Greenspan’s assessment is very accurate at this point
which is that the economy is better than it was in the fourth quarter of
2000,” he added.
According to preliminary numbers, the Nasdaq gained 31.40 to 2183.23, the Dow
slipped 45.14 to 10,450.14, and the S&P 500 added 1.20 to 1241.14.
Top sectors included semiconductors
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technology
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On the weaker side were telecom
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down 2.7%, and airlines
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Among tech bouncers of note were Oracle
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before climbing to a 12% gain of 2 3/8 to 21 5/8.
Also streaking were PMC Sierra
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13%, Qualcomm
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IBM
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and Intel
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Communications
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Looking ahead, Friday will be the last chance for Wayne Angell’s prediction
of a rate cut “this week.” Otherwise economic news remains light until
next Tuesday’s productivity report.