The Comeback Kid

An earnings warning from Intel sent stocks into a nosedive Friday, but a
steady rally in blue chips and select technology coaxed the Nasdaq back from the
brink, as it finished down just 0.6% at its high of the day. The Dow actually
gained 0.7% and the S&P 500 closed flat.

The Nasdaq gapped down at the open and traded down as much as 5.6% or 214
points before having its day-long reversal begin. Several analysts commented
that a strong Nasdaq finish would be extremely constructive for the average
moving forward.

Nasdaq volume surged 30% from Thursday’s level as 2.16 billion shares changed
hands while volume on the NYSE totaled a healthy1.17 billion shares.

According to preliminary numbers, the Dow gained 81.85 to 10,847.37, the
Nasdaq lost 25.25 to 3803.62, and the S&P 500 eased by less than a point to
1448.71.

Top performing sectors were biotechnology
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, up 4.7%, drugs
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,
up 3.5%, and health care
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, up 3.0%.

Weak sectors included semiconductors
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, down 5.9%, technology
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, down 4.3%, and oil services
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, down 1.9%.

Intel
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was the focus of the day, falling 13 17/32 or 22% to 47
15/16, and despite its weight on the Dow, the Dow posted solid gains for the
session.

Among Dow stars were Hewlett Packard
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, up 9%, McDonalds
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,
up 7%, Boeing
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, up 6%, and Coca-Cola
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, up 6%.

Chips avoiding the semi selloff included Rambus
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, up 3.6%,
Advanced Micro
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, up 4.7%, Teradyne
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, up 6.8%, and National
Semi
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, up 7.7%.

Select shiners included Corning
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, up 22 5/8 to 314 5/8. Newport
Corp.
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, up 19 1/4 to 189, and Human Genome Sciences
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, up
20 to 174 3/16.

Looking ahead in economic news, the August existing home sales will be
released at 8:30 AM ET on Tuesday. Analysts look for a figure of 4.48 million
sales.