The Signs Of Conviction In This Rally…
The major indexes gapped up off
the opening bell and trended higher throughout the day, closing with impressive
gains. At the top of the gainers list were semiconductors, Internet, software,
and biotechnology. The biggest decliners were gold and silver, healthcare, oil
service, and utilities.
The Semiconductor Index
(
$SOX.X |
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PowerRating), up 5.26%, and Broker/Dealer Index
(
$XBD.X |
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PowerRating), up
3.36%, took back their 200-day moving averages, showing conviction for the
rally, as they often lead the overall market. Regaining the 50-day moving
averages will be another step in confirming a new uptrend.
The
Dow Jones Industrial Average
(
$INDU |
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PowerRating) closed up 1.86% at 10298.42. The
S&P 500
(
$SPX |
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PowerRating) closed up 2.11% at 1097.33. The Nasdaq
(
$COMPQ |
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PowerRating) closed up 4.04% at 1719.35.
U.S. Treasury Bonds were
down 29 at 100’04.
Retail sales helped put
market players in a buying mood as they rocketed 1.2% in April, beating
expectations of 0.6% for the biggest increase in six months.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.25, and up–volume
over down–volume
by a 4.01 ratio. Nasdaq advancing issues over declining issues came in at 2.18,
and up–volume
beat down–volume
by a 1.99 ratio. The
VIX
was down 1.64% at 21.87. The TRIN
was down 0.06 at 0.56.
Above average volume
moved the Dow back to its 50-day MA, as the S&P 500 and Nasdaq pushed
north of their 20-day MAs. The Semiconductor Index
(
SOX.X |
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Chart |
News |
PowerRating), up
6.07% at 509.16, closed higher than its last two sessions.
The top sectors of the
day were the Interactive Week Internet
Index
(
$IIX.X |
Quote |
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PowerRating), up
6.48% at 102.08, and the GSTI Software Index
(
$GSO.X |
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PowerRating), up 6.43% at
133.49.
Losing
sectors of the day were the Gold
and Silver Index
(
$XAU.X |
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Chart |
News |
PowerRating),
down 5.49% at 76.34,
and the Morgan Stanley Healthcare Provider
Index
(
$RXH.X |
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Chart |
News |
PowerRating),
down 0.63% at 346.87.
Chip maker Intel Corp.
(
INTC |
Quote |
Chart |
News |
PowerRating), up 5.71% at 30.15, was upgraded by
Robertson Stephens to “buy” from “market perform” on the
expectation that personal computer demand will increase in the second half of
the year.
Discount retailer Wal-Mart (WMT),
up 4.26% at 2.35, beat its earnings estimates by a penny as it reported profits
of 37 cents a share.
Also in the retail sector, JC Penny
(
JCP |
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PowerRating), up 7.28% at 24.89, beat earnings expectations by reporting net income
double what had been predicted on a 2.7% increase in sales.
Education company Apollo Group
(
APOL |
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Chart |
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PowerRating), up 2.48% at 37.56, will be added to the S&P 500 tonight. Lehman
Brothers believes 9 million shares will need to be purchased when it is added.
Computer hardware maker Dell Computer (DELL),
up 6.07% at 26.90, has received positive comments from Merrill Lynch who claimed
the company will deliver in-line or better than expected earnings for the first
quarter. They
have reiterated their “strong buy” rating.
Retailer Sears and Roebuck
(
S |
Quote |
Chart |
News |
PowerRating), up 5.55% at 54.89, was upgraded by
UBS Warburg to “buy” from “hold” as it endorses its
acquisition of catalogue retailer Lands End
(
LE |
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Chart |
News |
PowerRating), up 0.08% at 61.78.
Oil service company BJ Services (BJS),
up 0.75% at 38.65, will replace US Airways Group (U)
in the S&P 500 Index tonight.
Biotechnology company Genentech
(DNA),
up 8.79% at 36.50, and OSI Pharmaceutical (OSIP),
up 7.32% at 30.46, have had their chemotherapy treatment drug for lung cancer
patients, Tarceva, fast tracked by the FDA.
Security systems and services company Invision
(INVN),
up 14.49% at 20.38, announced it has received $17.5 million worth of orders and
has reaffirmed its second quarter
guidance.