Three In A Row

February 27, 2002
Daniel Beighley

The
markets pushed higher in early trading, held a range mid day, then
sold off in the afternoon. At close, the Dow was slightly positive, the S&P
500 slightly negative, and the Nasdaq moderately down. Airline, banking, and
insurance stocks made the day’s big gains, with networking, Internet, and
biotech stocks showing the biggest losses.Â

Comments by Alan Greenspan
didn’t seem to be what traders wanted to hear, as the Fed Chairman claimed that
a weak labor market could hinder consumer spending. Tony Crescenzi commented,
“The equity market (was) comforted by the numerous reasons Greenspan cited
as reasons for optimism on the economic outlook and the bond market (was)
comforted by Greenspan’s notes of caution, which hint at a neutral policy stance
and therefore no threat of interest rate increases.”

Elsewhere in the economy,
orders for durable goods rose 2.6% for the month of January compared to
the 1.5% expected. This is the third time in four months the number has risen,
and hinting to an economy on the rebound.

Overall
NYSE volume was 1,378,234,000.
NYSE advancing issues were 1,904,
with up volume at 797,992,000;
declining issues were 1,220,
with down volume at 536,671,000.
Overall Nasdaq volume was 1,811,372,000.
Nasdaq advancing issues were
1,818,
with up volume at 644,396,000;
declining issues were 1,721 with
down volume at 1,144,657,000.
The VIX
was down 0.48 to 23.09. The TRIN
was up 0.45 to 1.04.

Average volume on the session
saw the Dow finish with its third close in a row above its 200-day MA, as it put
in an intraday reversal, which is usually not a good sign. The S&P 500 held
out above its 20-day MA, though finished on a note of indecision with the often
deadly “doji” formation. The Nasdaq, still well below its major moving
averages, appears to be continuing on its downtrend. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
down 1.37%, hit both its 50- and 200-day moving averages at its high today,
though closed convincingly below these marks. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating),
down 0.40%, also held higher ground today before selling off in intraday
reversal fashion.

Clothing retailer Gap
(
GPS |
Quote |
Chart |
News |
PowerRating), down 8.49% to 12.40, posted another
quarter of losses and said it will issue $1 billion in convertible debt.Â

Conglomerate Honeywell
(
HON |
Quote |
Chart |
News |
PowerRating), up 3.16% to 37.25, announced that it
has received over $2 billion in aerospace contracts for commercial and military
use.

Networking bellwether Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), down 8.32% to 14.21,
fell after Wachovia Securities lowered its third quarter estimates for the
company, citing a continuing trend of capital spending by telecommunications
providers.

Semiconductor company Texas Instruments (TXN),
down 2.03% to 30.36, announced it has won a contract with China’s biggest
computer maker, Legend Holdings Inc., to make cell phones.

Biotech and drug company ImClone Systems
Incorporated (IMCL),
up 32.99% to 20.64, announced the company’s new cancer drug, Erbitux, will get a
chance to be reviewed by U.S. regulators. Imclone has partnered with Bristol
Myers Squibb Co. (BMY)
in the production of the drug.

Elsewhere in biotech news, Abgenix Inc (ABGX),
down 14.05% to 20.61, reported it will issue $250 million worth of debt
convertible into the company’s stock. These bonds will be sold in private
offering to institutional buyers with the money going for possible acquisitions
and research and development.Â

Semiconductor company Semtech

(
SMTC |
Quote |
Chart |
News |
PowerRating), up 1.97% to 31.00, said that it met analysts’ expectations for
the fourth quarter as income fell 50%. The company also said that it expects to
meet earnings expectations for 2002.

Three In A Row

BUY THE FEAR, SELL THE GREED

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