The Strongest Momentum Going Into Monday

June 28, 2002
Daniel Beighley

The major averages headed
higher in early trading and held gains for most of the day until selling
pressure weighed in to bring the indexes lower into the close. The top gainers
were airlines, Internet, telecoms, and computer hardware, while gold and silver,
pharmaceuticals, oil service, and semiconductors were deepest in the red.

U.S. Treasury Bonds were
down ‘4 at 102 ’25.

In economic news for this Friday, personal income
for May rose 0.3% for its best increase in four months, with personal
expenditures falling 0.1% for the weakest reading since last November. The University
of Michigan’s consumer sentiment index fell to 92.4 in June, down from May’s
96.9 reading. Also, the Chicago Purchasing Managers index for June fell
to 58.2% vs. May’s 60.8%.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.97, and up–volume
over down–volume
by a 1.61 ratio. Nasdaq advancing issues over declining issues came in at 1.43,
and up–volume
beat down–volume
by a 1.04 ratio. The
VIX
was down 0.74 at 29.28. The TRIN
was up 0.30 at 1.22.

This morning traders had little
trouble shaking off news from office equipment maker Xerox (XRX),
down 25% at 6.00, as it was discovered to be the newest addition to the
accounting scandal fallout.Â

Software maker Intuit
(
INTU |
Quote |
Chart |
News |
PowerRating), up 4.80% at 49.72, announced that
it will buy privately held Eclipse in a deal worth $85 million in cash. The
company also said it expects to come in at the upper range of its 2003 earnings
estimates.

Communications services company Qwest
Communications
(
Q |
Quote |
Chart |
News |
PowerRating), up 1.44% at 2.80, said that it asked its employees to
take an unpaid leave as the company deals with a $26 billion debt load. Merrill
Lynch has cut its ratings on Qwest to “reduce/sell” from
“neutral”.

Computer network company Cerner (CERN),
down 3.37% at 47.83, has been downgraded by Merrill Lynch to
“reduce/sell” from “buy” on the belief that the company will
not perform in the upcoming quarters the way it has for the past eight quarters.

Software company Eclipsys Corp. (ECLP),
down 45.33% at 6.56, warned that it will have a second
quarter loss of 4
to 6 cents a
share vs. previous expectations of a profit of 11 to 13 cents a share.

Also in the software sector, Veritas Software
(VRTS),
down 1.73% at 19.79, has had its 2002 earnings estimates cut by Bank of America
to 55 cents a share from 60 cents a share based on the belief that its backup
and data–protection
software will see some correction. Estimates were also lowered for 2003.

Shoemaker Nike (NKE),
up 4.33% 53.65, announced its fourth quarter
income beat expectations by 2 cents as it reported profits of 77 cents a share.

Conglomerate Johnson Controls
(
JCI |
Quote |
Chart |
News |
PowerRating),
up 2.61% at 81.61, has been rated a new “strong buy” by Deutsche Bank
Securities with a target price of $94.00.

Electric utilities company Allegheny Energy
(
AYE |
Quote |
Chart |
News |
PowerRating), down 10.46% at 25.75, has been downgraded by Merrill Lynch to
near-term “neutral” from “buy” based on a lower earnings
outlook.

The Strongest Momentum Going Into Monday

BUY THE FEAR, SELL THE GREED

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