Three Sectors Worth Watching Tomorrow
Stocks turned in a whipsaw day
as the price action went positive off the bell, turned down to hit lows around
12:30 p.m. ET, then made another rally into the close. All three indexes made
gains on the day. Leading the action were biotechnology and gold and silver,
with broker/dealers, telecoms, and Internet stocks making the biggest
losses. Biotechnology, pharmaceuticals, and Dow utilities all made strong
closes. This will make a double bottom on the daily chart for the biotechnology
sector. If follow through is in the cards, then these would be sectors worth watching tomorrow.
The
Dow Jones Industrial Average
(
$INDU |
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PowerRating) closed up 1.69% at 10381.73. The
S&P 500
(
$SPX |
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PowerRating) closed up 1.13% at 1130.46. The Nasdaq
(
$COMPQ |
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PowerRating) closed up 1.40% at 1767.08.
Stocks were able to rally with
little in the way of positive news. With no key economic reports to be released
until tomorrow, much focus is on key earnings reports to be released after the
bell, which include: Yahoo!
(
YHOO |
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PowerRating), Christopher & Banks
(
CHBS |
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Chart |
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PowerRating) and McAfee.com
(
MCAF |
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PowerRating). Tomorrow GE
(
GE |
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PowerRating) will
report earnings.
Market breadth was mostly
positive, with NYSE advancing issues over declining issues by a ratio of 2.54,
and up–volume
over down–volume
by a 1.94 ratio. Nasdaq advancing issues over declining issues came in at 1.49,
and down–volume
beat up–volume
by a 1.14 ratio. The
VIX
was down 0.85 at 20.20. The TRIN
was down 0.09 at 1.30.
Above-average volume launched the Dow above its 50-day MA,
and it closed above its recently broken upward trendline, with the S&P 500
bouncing off its upward trendline to regain its 50-day MA, as the Nasdaq attempted
to recapture yesterday’s losses, though is still well below its major MAs. The Semiconductor
Index
(
$SOX.X |
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PowerRating), up 1.07%, closed at the top of its daily range, but
still below its 50-day MAs. The Broker/Dealer Index
(
$XBD.X |
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Chart |
News |
PowerRating), up
0.30%, closed at the bottom of its range, just below its 50-day MA.
Top
sectors of the day were the Biotechnology Index
(
$BTK.X |
Quote |
Chart |
News |
PowerRating),
up
5.61% at 100.57, and the Gold and
Silver Index
(
$XAU.X |
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Chart |
News |
PowerRating),
up 4.61% at 69.80.
Losing
sectors of the day were the North American Telecom Index
(
$XTC.X |
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Chart |
News |
PowerRating),
down 1.53% at 565.36,
and the GSTI Internet Index
(
$GIN.X |
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Chart |
News |
PowerRating), down 0.88% to 88.93.
Retail company Sears & Roebuck
(
S |
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Chart |
News |
PowerRating), up 5.82% at 54.18, said that
its first quarter operating income would reach 93 cents a share, surpassing
analysts’ expectations of 61 cents and year-ago earnings of 45 cents.
Clothing retailer American Eagle Outfitters
(AEOS),
down 1.84% at 24.50, said first quarter
profits will be 14 to 17 cents a share vs.
21 cents a share anticipated by analysts. Lower-than-expected sales for February
and March were cited as the cause.
Wireless solutions company Research In Motion
(RIMM),
down 13.19% at 20.19, reported a loss of 11 cents a share for its quarter ending
in March, compared to a loss of 8 cents a year ago. Analysts were looking for a
loss of 15 cents.
Biotechnology company IDEC
Pharmaceuticals
(IDPH),
up 6.48% at 61.70, said it will earn 17 cents a share for the first quarter,
beating analysts‘
consensus by a penny. The company said sales of its cancer drug Rituxan came in
at $235 million, compared to an estimated $240 million.
Chemical company Dow Chemical Co. (DOW),
up 2.76% at 33.50, had its debt rating cut by Moody’s to "A3"
from "A1" based on the company’s weak profit outlook and exposure to
asbestos lawsuits.
Internet infrastructure company Cisco Systems (CSCO),
up 4.92% at 15.55, is the subject of positive comments from Merrill Lynch after
rumors of an earnings warning dragged the stock down yesterday. Merrill said the
company is executing well in a difficult environment and is unlikely to issue a
warning.
Biotechnology company Genentech
(
DNA |
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Chart |
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PowerRating), up 5.18% at 43.18, said
that their first quarter net income benefited from an accounting change and
sales of two cancer drugs as its results beat last year’s performance by 29%.
Office equipment maker Xerox Corp
(
XRX |
Quote |
Chart |
News |
PowerRating), down 3.30% at 9.94, fell
after it was reported that the Securities and Exchange Commission has expanded
its investigation into alleged accounting fraud.
Communications services company Qwest
(
Q |
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Chart |
News |
PowerRating), down 10.69% at 6.26, said
that a Securities and Exchange Commission probe could lead to a change in its
earnings statement, though it would not affect revue.
Software giant Microsoft
(
MSFT |
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Chart |
News |
PowerRating), up 2.60% at 56.30, benefited
from comments by CS First Boston that the company’s operating margins can offset
worries over consumer profitability. The firm is comfortable with 2003 earnings
estimates.
Business applications software maker Siebel Systems
(
SEBL |
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Chart |
News |
PowerRating), down
7.69% at 25.44, said that the first quarter was the worst in the history of the
information-technology industry, and they does not expect things to get better
until the third or fourth quarter.