This Sector May Pick Up Steam
The major indexes were choppy
in early trading as price action trended lower to midday, then rallied strong
into the close. Leading the action were biotechnology, Internet, airline,
software, and gold and silver; with semiconductors, networking, and
pharmaceuticals down slightly.
Taking back its 200-day moving
average, the Broker/Dealer Index
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$XBD.X |
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PowerRating) rose 1.69% as it made a
swing point on its daily chart. This sector will be watched for follow through and
picking up steam, as it has been flirting with this key level for the
past few weeks. Strongest in this sector today were Lehman Brothers
(
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PowerRating), up 1.46% at 65.72, Bear Stearns
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PowerRating), up 1.41% at 62.35,
and Goldman Sachs
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PowerRating), up 1.24% at 79.17.
The
Dow Jones Industrial Average
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S&P 500
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PowerRating) closed up 1.44% at 1697.62.
U.S. Treasury Bonds were
down 16 at 101 ’10.
The futures market was given a
boost this morning on the tail of the durable goods number for April,
which rose 1.1% for its fifth straight monthly gain. Analysts were looking for a
0.5% increase.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.71, and up–volume
over down–volume
by a 2.83 ratio. Nasdaq advancing issues over declining issues came in at 1.43,
and up–volume
beat down–volume
by a 2.13 ratio. The
TRIN
was down 0.36 at 0.60.
Below-average volume
moved all three major indexes further above their 20-day moving averages as they
closed at the top of their ranges. The Semiconductor Index
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$SOX.X |
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PowerRating),
down 0.54%, closed on its 20-day MA.
The top sectors of the
day were the Biotechnology
Index
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$BTK.X |
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PowerRating), up
7.40% at 431.24, and the Dow Jones Internet Commerce Index
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PowerRating), up 3.49% at 47.74.
Losing
sectors of the day were the Semiconductor
Index
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PowerRating),
down 0.54%
at 543.54,
and the Networking Index
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$NWX.X |
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PowerRating), down 0.07% at 213.37.
Communications services company Qwest Communications (Q),
up 1.39% at 5.10, has had its credit rating cut to "junk" by Standard
and Poor’s.
The software sector was hit with downgrades again, as Deutsche Bank
Securities lowered its second quarter estimates on the following companies: Siebel
Systems
(
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PowerRating), up 4.45% at 20.89, PeopleSoft
(
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PowerRating), up
4.51% at 21.05, Manugistics
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MANU |
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PowerRating), up 10.10% at 10.35, Vignette
(
VIGN |
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PowerRating), up 7.58% at 2.41, and Documentum
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DCTM |
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PowerRating), down 1.35% at
14.54. Deutsche Bank lowered its 2002 estimates for Vastera
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VAST |
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PowerRating),
up 2.91% at 6.35%, and I2 Technologies
(
ITWO |
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PowerRating), down 1.46% at 3.36.
Software maker Oracle
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PowerRating), up 6.47% at 9.37, was upgraded by
RBC Capital Markets to "outperform" from "sector perform."
Also in the software sector, Peregrine (PRGN),
up 3.92% at 1.59, is to restate its financial results for fiscal 2000 and
2001 and the first three quarters of 2002 as an outcome of an ongoing
investigation by the SEC. The company is expected to report irregularities
amounting to as much as $100 million.
Communications equipment maker Ciena (CIEN),
down 5.59% at 6.08, reported second quarter revenue declined 79.5%, or $87.1
million. Analysts were looking for revenue to come in at $95.21 million.
Chip stocks were under pressure again as Intel Corp.
(
INTC |
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PowerRating), down
0.67% at 29.39, was believed to be eliminating its 2003 spending plan. Goldman
Sachs reassured investors when it announced that the speculation was
"overblown." Active in the semiconductor index today were KLA-Tencor
(
KLAC |
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PowerRating), down 2.25% at 25.57, Applied Materials
(
AMAT |
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PowerRating), down
2.25% at 25.57, and Micron Technology
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MU |
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PowerRating), up 3.18% at 24.30.
Retailer Williams-Sonoma (WSM),
up 10.64% at 32.12, announced first quarter earnings of 13 cents a share,
beating consensus estimates by 4 cents. Net revenues for the company increased
14.6%.
Doughnut retailer Krispy Kreme (KKD),
up 3.91% at 41.10, posted first quarter earnings of 15 cents a share, beating
consensus estimates by a penny. The company’s year-ago profits were 10 cents a
share.
Chip maker Nvidia (NVDA),
down 6.09% at 35.73, said that it will earn between 44 cents and 47 cents a
share for the fiscal second quarter, with the consensus estimate previously at
44 cents.