Two Major Groups Poised For Carryover Momentum Into Monday

June 14, 2002
Daniel Beighley

The markets gapped down at the
open, fell on further selling pressure that bottomed out by 10:00 a.m. ET, then
went into an uptrend that lasted into the close. The Dow and S&P 500
remained in negative territory, while the Nasdaq managed to close positive.
Biotechnology, gold and silver, broker/dealers, insurance, and banks were some
of the biggest gainers, while airlines, telecom, and Internet issues were the
biggest losers.

U.S. Treasury Bonds were
up 110 at 105 ’02.

In economic news, the University of Michigan’s consumer
sentiment index for mid-June fell to 90.8 vs. May’s 96.9 level. This was
well below most expectations and raises fear over the negative effects the
consumer may bring to the economy.

Also affecting sentiment, the event of a car bomb exploding
at the American Consulate in Pakistan helped weigh down price action in early
trading.

Market breadth was mixed,
with NYSE declining issues over advancing issues by a ratio of 1.19, and down–volume
over up–volume
by a 1.62 ratio. Nasdaq advancing issues over declining issues came in at 1.00,
and up–volume
beat down–volume
by a 1.06 ratio. The
(
$VIX.X |
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PowerRating)
closed up 1.04 at 29.77. The
TRIN
closed up 0.21 at 1.38.

Above-average volume on
the NYSE and average volume on the Nasdaq had the Dow, S&P 500 and Naz closing
at the top of their daily ranges.

Communication services company Sprint
PCS (PCS),
down 26.54% at 4.40, said that its revenue will decline at a mid-single-digit
rate compared to previous estimates in the low-single digits. The company has
also reduced its capital expenditures for the year. Also in the sector, AT&T
Wireless
(
AWE |
Quote |
Chart |
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PowerRating) fell 9.44% to 5.75, and Nextel
(
NXTL |
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PowerRating) rose
3.61% to 4.30.

Biotechnology company Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating), up 7.55% at
42.42, received a "complete response" letter from the Food and Drug
Administration for its psoriasis drug Amevive. This brings the drug one step
closer to approval.

Also in the biotechnology sector, Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating), up 6.29% at
40.18, received positive comments from Merrill Lynch, who said the stock’s sell-off
was over done.

Computer networks company Network Appliance
(NTAP),
up 1.93% at 13.19, has received positive comments from Merrill Lynch,
who believes the company’s new products will provide significant revenue over
the next two years. Merrill reiterates its near-term "buy" rating.

Electronics Instruments & Controls company Sanmina-SCI
(
SANM |
Quote |
Chart |
News |
PowerRating), down 2.24% at 7.85, was downgraded by CSFB to a "hold"
from "buy" on fear that a weak market will now have adverse affects on
the company’s longer-term prospects. Sanmina said that it has not changed its
outlook for the third quarter.

Software maker Adobe Systems (ADBE),
down 13.31% at 31.37, announced that its sales for the third quarter
will come in $28 million less than analysts expected.

Chip maker Genesis Microchip (GNSS),
down 26.30 at 9.02, announced that sales for its quarter ending June 30 will be
$41 million to $43 million vs. previous estimates of $60 million.

Also in the chip sector,
Xilinx (XLNX),
up 2.01% at 28.40, said that it will repurchase as much as $100 million of its
common stock over the next two years. This is a continuation of a repurchasing
program that began in November of 2000.

From TM’s proprietary Implosion
List, communications services company Telephone and Data Systems
(
TDS |
Quote |
Chart |
News |
PowerRating) fell 3.21% at 63.15.

Two Major Groups Poised For Carryover Momentum Into Monday

BUY THE FEAR, SELL THE GREED

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