Three Potential Market Turners Tomorrow

June 19, 2002
Daniel Beighley

The major indexes began the day
in negative territory, then staged an early rally that stalled out by 11:30 a.m.
ET when sellers stepped in to dominate the action. The Nasdaq suffered the worst
losses. Leading the upside action was healthcare, transportation, and forest and
paper products, with the downside weighed down by semiconductors, computer
hardware, networking, and Internet issues.

Closing poorly, the tech sector
took the day’s negative news to heart and is poised to carry the momentum into
tomorrow morning. Tomorrow’s economic releases of leading indicators, initial
jobless claims, and the Philadelphia Fed are potential market turners.

U.S. Treasury Bonds were
up 25 at 105 ’06.

The day’s negative sentiment was influenced by several
warnings and downgrades in the tech sector, plus another terrorist attack in
Israel.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.70, and down–volume
over up–volume
by a 2.46 ratio. Nasdaq declining issues over advancing issues came in at 2.21,
and down–volume
beat up–volume
by a whopping 9.19 ratio. The
VIX
was up 0.77 at 55.32. The TRIN
was up 2.87 at 3.93.

Slightly below-average
volume had the Dow, the S&P 500, and Nasdaq closing at the bottom
of their daily ranges under their 20-day moving averages. The Semiconductor
Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down 6.73%, closed at the bottom of its range under
its 20-day moving average. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 2.13%, also closed at the bottom of its daily range under
its 20-day moving average.

Computer maker
Apple Computer (AAPL),
down 15.03% at 17.12, has warned that it will miss its quarter profits by 10%,
with sales falling 9%.
The company attributes the decline to weak demand in the PC industry.

Semiconductor company Advanced Micro Devices
(AMD),
down 15.53% at 8.70, has warned that its sales for the quarter will come in 25%
less than the analysts’ consensus. The company attributes the decline to weak
demand in the PC industry.

Also in the semiconductor sector, Micron
Technology (MU),
down 14.91% at 20.08, announced that it is being investigated by the U.S.
Department of Justice for anti–competitive
practices. The company received a grand jury subpoena from the U.S. District
Court of Northern California Tuesday night.

Chip giant Intel Corp. (INTC),
down 8.76% at 20.09, announced that it will shut down its business that manages
other companies Internet sites and take a $100 million write-down in the second
quarter.

Software maker Oracle Corp. (ORCL),
down 2.00% at 8.80,
reported a 23%
drop in fiscal fourth quarter
earnings, though managed to beat analysts’ expectations.

Tire maker Goodyear Tire & Rubber Co. (GT),
down 0.80% at 19.84, has increased its second
quarter earnings
targets to 10 to 15 cents a share
from 5 to 10 cents a share. The company attributes the rise to cost-cutting
methods and improved international sales.

Electronics manufacturing company Jabil Circuit
(
JBL |
Quote |
Chart |
News |
PowerRating), up 6.26% at
20.35, beat its third quarter earnings projections. The company also raised its
guidance for the fourth quarter.

Brokerage Bear Stearns
(
BSC |
Quote |
Chart |
News |
PowerRating), down 0.41% at 61.69, beat its
second quarter earnings consensus by 29% with profits of $1.55 a share, 35 cents
better than expected.

From TM’s proprietary Implosion
List, software maker Adobe
(
ADBE |
Quote |
Chart |
News |
PowerRating) fell 10.00% to 27.08.

Three Potential Market Turners Tomorrow

BUY THE FEAR, SELL THE GREED

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