The Telltale Clue From Yesterday
The major indexes staged
opening reversals which turned into downtrends for the session, with broad
selling participation across the sectors. Gold and silver was the biggest gainer
of the day, with utilities, banks, and healthcare providers comprising the rest
of the upside action. Leading to the downside were computer hardware, Internet,
software, biotechnology, and semiconductors. As
mentioned in yesterday’s
recap the fact that the semis had declined in
spite of yesterday’s positive news in National Semiconductor, hinted at the
negative tone today for technologies.
Now parked on its 200-day
moving average, the Broker/Dealer Index [
(
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wasn’t able to rally with Merrill Lynch
(
MER |
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after the company announced that it has settled a lawsuit against it from the
New York Attorney General by paying out $100 million. The company was being sued
for misleading investors with overly optimistic research.
The
Dow Jones Industrial Average
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The S&P 500
(
$SPX |
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U.S. Treasury Bonds were
up 14 at 101 ’08.
Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.78, and down–volume
over up–volume
by a 2.27 ratio. Nasdaq declining issues over advancing issues came in at 1.76,
and down–volume
beat up–volume
by a 5.29 ratio. The
VIX
was up 1.09 at 22.65. The TRIN
was up 0.23 at 1.27.
Below-average volume
moved the Dow, the S&P 500, and Nasdaq to their 20-day MAs. The
Semiconductor Index
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$SOX.X |
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The top sectors of the
day were the Gold and Silver
Index
(
$XAU.X |
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2.12% at 84.95, and the Utility Sector Index
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$UTY.X |
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289.96.
Losing
sectors of the day were the Internet
Index
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down 3.98% at 96.53,
and the Disk Drive Index
(
$DDX.X |
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PowerRating), down 3.74% at 87.03.
Several application software companies have had their estimates decreased by
Salomon Smith Barney. These companies include Ariba (ARBA),
down 2.83%, PeopleSoft (PSFT),
down 8.24% at 20.04, Siebel Systems (SEBL),
down 7.16% at 20.98, and Microsoft (MSFT),
down 3.36% at 52.19.
Also from that group, PeopleSoft was under heat from news that the SEC
brought administrative action against Ernst & Young for claims that it
violated accounting rules when auditing the company. Microsoft announced
that it will spend $2 billion in the development of Xbox Live. This
next-generation game consol will be $49.95 for a one-year subscription.
Home improvement retailer Home Depot (HD),
down 7.42% at 44.90, beat its earnings estimates by 3 cents as it reported first
quarter earnings of 36 cents a share. The company also expects to meet second
quarter estimates. However, the company’s CEO remains "cautious" on
the outlook. Also in the retail sector, Wal-Mart
(
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56.60, and Target
(
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Auto maker Ford Motor
(
F |
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upgraded by Merrill Lynch to "strong buy" from "neutral."
Ford has also brought back a former vice chairman to be its new chief financial
officer.
Drug maker Pfizer (PFE),
down 1.45% at 35.90, is being reported by the Wall Street Journal as
being ready to announce its epilepsy drug, pregbalin, which treats severe
anxiety as well. The drug does not appear to create the side effects other drugs
in the industry do.
Office retailer Staples (SPLS),
up 6.31% at 21.88, reported earnings of 14 cents a share, beating the Multex
analyst consensus by 3 cents. The company’s earnings this time last year were 8
cents a share.
Manufacturer Flextronics International
(
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PowerRating), down 4.06% at
14.39, was down after it announced an offer to acquire plastic and metal
supplier NatSteel Broadway.
Chip maker Chartered Semiconductor (CHRT),
up 1.42% at 23.44, said that it had increased revenue 40% for the first quarter,
beating an earlier forecast of a 25% rise.
From TM’s proprietary Implosion
List, casino and gaming company Penn National Gaming
(
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PowerRating)
closed down 6.33% at 31.80.