This Sector Is A Positive Sign For The Overall Market

May 17, 2002
Daniel Beighley

Today the markets held onto a
big week of gains as they traded in a narrow range characterized as choppy. The
biggest advancers were gold and silver, biotechnology, Internet, and
pharmaceuticals, with oil service and energy related stocks the biggest losers.

As one of the strongest
trending sectors, The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up 1.42%,
tested its 50-day moving average before pulling back to close just below this
mark. The index is positioned to lead other sectors above this mark in the near
future, and is a positive sign for the overall market.

U.S. Treasury Bonds were
down 22 at 100 ’06.

In economic news, The University of Michigan’s
sentiment index for May rose to 96.00 from 93.00. Analysts had
predicted there would be no change in the number, though there was little market
reaction from the release.

Market breadth was positive, with NYSE
advancing issues over declining issues by a ratio of 1.24, and up volume over
down volume by a 1.45 ratio. Nasdaq advancing issues over declining issues came
in at 1.17, and up volume beat down volume by a 2.20 ratio.
The
VIX was down 1.23 at 20.22. The TRIN
was down 0.02 at 0.79.

Below average volume
held the Dow
above its 50-day MA for its second consecutive close, as the S&P 500
and Nasdaq inched closer towards their 50-day moving averages.
The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), up 0.91%, held within a
consolidation just above its 200-day MA.

Software company Autodesk (ADSK),
down 7.82% at 14.38, reported that its first-quarter profit fell 37 percent, and
the resignation of its chief financial officer.

Computer hardware maker Dell Computer (DELL),
up 0.35% at 27.95, beat analysts’ estimates by a penny with second-quarter
profits of 18 cents a share.

Clothing retailer Gap Inc. (GPS),
down 3.49% at 16.30, exceeded analysts’ estimates by 2 cents by posting earnings
of 4 cents a share.

Software and programming company Network Associates (NET),
up 6.55% at 21.62, announced that it will restate its financial results for
1998, 1999, and 2000, based on an internal accounting investigation.

Hotel company Marriot (MAR),
down 1.14% at 42.24, is reported by the Wall Street Journal of being sued by CTF
Hotel Holdings, one of the largest owners of Marriot, for stealing millions from
suppliers.

Utilities companies were under pressure today as
Reliant Energy
(
REI |
Quote |
Chart |
News |
PowerRating), down 1.37% at 14.30, was downgraded after news
that two of the company’s top executives resigned. A week ago the company’s
majority owned trading subsidy, Reliant Resources, was revealed as engaging in
illegitimate transactions that boosted volume but had no economic value. CMS
Energy
(
CMS |
Quote |
Chart |
News |
PowerRating), up 0.39% at 15.31, also admitted to illegitimate trades.

Communications equipment maker Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating),
up 0.46% at 32.49, was upgraded by UBS Piper Jaffray to "outperform" from
"market perform" based on an attractive valuation.

Motorcycle retailer Harley Davidson
(
HDI |
Quote |
Chart |
News |
PowerRating),
down 0.25% at 55.01, was upgraded by Buckingham Research to "strong buy" from
"accumulate" based on strong fundamentals.

This Sector Is A Positive Sign For The Overall Market

BUY THE FEAR, SELL THE GREED

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