What Bodes Well For This Market…

June 27, 2002
Daniel Beighley

Price action on the major
indexes opened higher off the bell, then quickly entered a descent that lasted
until 12:30 p.m., when the bulls took over and moved prices higher into the
close. Leading sectors were computer hardware, Internet, broker/dealers, and
semiconductors; gold and silver, oil service, and networking took the heaviest
losses.

Two strong closes in a row bode
well for this market, though tomorrow will be the last day of the second
quarter, and as Kevin
Haggerty mentioned in his article, many fund managers may add to the
volatility as they adjust their portfolios.

U.S. Treasury Bonds were
down 1 ’10 at 102 ’29.

In economic news, the nation’s GDP was revised
upward to 6.1% for the first quarter vs. the previous recording of 5.6%. This is
the fastest growth in GDP since the fourth quarter of 1999. Also, initial
jobless claims dropped 10,000 to 388,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.72, and up–volume
over down–volume
by a 1.52 ratio. Nasdaq advancing issues over declining issues came in at 1.64,
and up–volume
beat down–volume
by a 3.40 ratio. The
VIX
was down 2.15 at 30.20. The TRIN
was down 0.63 at 0.90.

Mobile phone chip maker Motorola (MOT),
up 2.92% at 14.45, said it expects to meet or beat its earnings estimates for
the current quarter and rest of the year as it lays off 7,000 workers.

Financial services company American Express
(
AXP |
Quote |
Chart |
News |
PowerRating), up 3.95% at 37.08, gave the Dow a boost as it reiterated its second
quarter guidance.

Computer hardware maker Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating), up 9.76% at
5.17, received positive comments from Goldman Sachs, who believes the company is
making more progress than expected toward fourth quarter sequential revenue
growth and profitability.

Money center bank Citigroup
(
C |
Quote |
Chart |
News |
PowerRating), up 5.83% at 39.16, said that its
exposure to Worldcom’s credit losses is “negligible,” though it expects
modest losses from its role as a market maker in the company’s stock, and a loss
of $355 million from its exposure to bonds.

Biotechnology Andrx (ADRX),
up 1.46% at 26.97, has announced that the FDA has approved final marketing for
its drug Altocor, a cholesterol lowering drug expected to be launched in the
third quarter
of 2002.

Broadcasting and cable TV company Radio One
Inc (ROIA),
down 5.27% at 13.82, is the subject of a Wall Street Journal article
which claims the company has been able to avoid investor scrutiny for private
transactions,
including company loans for executives, rent paid for office space owned by
officials, and business deals with executives and directors.

Airline company Southwest Airlines (LUV),
up 3.57% at 15.63, has been upgraded by CSFB to “buy” from
“hold” based on the company’s strong capitalization relative to its
peers.

Chip maker Fairchild Semiconductor (FCS),
up 7.30% at 23.50, has been upgraded by Lehman Brothers to “buy” from
“market perform” based on attractive valuation.

What Bodes Well For This Market…

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources