The Case For Second-Half Recovery
On the first trading day of 2002, U.S. stocks are
down on concern the three-month rally in share prices has exceeded prospects
for corporate profits. Citigroup
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and Kmart
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An index measuring U.S. manufacturing rose in
December for the second straight month, reflecting increases in production and
new orders, a sign the worst of the 17-month factory slump may be over.
The manufacturing index of the Institute for
Supply Management, formerly known as the National Association of Purchasing
Management, increased to 48.2 last month from 44.5. A month after the September
terrorist attacks, the index fell to 39.8, its lowest since February 1991.
Readings below 50 signal contraction and the index has been below that level
since July 2000.
The data indicate that during the first half of
the year 2002, the U.S. will see manufacturing regain some momentum. This is
according to Norbert Ore, chairman of the Institute for Supply Management
manufacturing report.
Semiconductor-related shares are on the rise,
limiting losses in the Nasdaq Composite Index, after Hynix Semiconductor
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raised chip prices for personal computers for the third time in a month. Intel [INTC|INTC]
is up .70 to 32.15, and Micron Technology
(
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32.69.
The S&P 500
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$SPX.X |
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by 7.13 to 1140.95. The Dow Jones Industrial Average
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trading at 9987.81, lower by 33.69, and the Nasdaq
(
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currently at 1943.73, down 6.67.
Breadth on the Nasdaq continues to be
negative, despite gains from its most active issues. Decliners are leading
advancers by a 1,878 to 1,455 margin, but the volume of stocks seeing gains is
pummeling down-volume 352.8 million shares to 219.6 million. Of the Nasdaq’s ten
most active stocks, only one is losing ground. Topping the list, Cisco Systems
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is up .41 cents at 18.52. Sun Microsystems
(
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12.73. The lone loser is Microsoft
(
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Citigroup
(
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Johnson & Johnson
(
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(
XOM |
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(
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down .72.
AOL Estimates Cut
AOL
(
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Stanley Dean Witter & Co. analysts Mary Meeker and Richard Bilotti trimmed
revenue and profit estimates for the biggest Internet and media business, citing
a slump in advertising.
America West Airlines
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again today by .51 cents to 4.01. Volume is 2 million shares, nearly five times
the daily average over the past 200 days. The stock has now gained 60% since
last Friday’s close, after which it said it had received conditional approval on
federal loan guarantees for $380 million. The loan guarantees are part of the
$15 billion the U.S. government set aside to aid airlines hurt by the Sept. 11
terrorist attacks. Meanwhile, the shares are still 54% below its Sept. 10
closing price.
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