What Can Turn It Around
The markets went positive off
the bell, then entered downtrends for the session, with all three major indexes
negative at the close. Airline, healthcare, and banking stocks took the day’s
top spots, with Internet, software, and networking stocks making the biggest
losses. The Nasdaq and the S&P 500 are now trading below their upward
trendlines, while the Dow rests on this mark. With the semiconductor, software,
and broker/dealer indexes closing poorly, and news releases continuing to
disappoint, we will look for key earnings announcements to turn things around.
The
Dow Jones Industrial Average
(
$INDU |
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The S&P 500
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$SPX |
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$COMPQ |
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The shadow of doubt "Big
Blue" left on the market yesterday carried over to today as the selling was
strongest in technology. With no key economic releases, the market community
focused on mostly disappointing corporate announcements. Tomorrow will bring
earnings announcements from Yahoo!
(
YHOO |
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Banks
(
CHBS |
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(
MCAF |
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Market breadth was mixed, with
NYSE advancing issues over declining issues by a ratio of 1.37, and down-volume
over up-volume by a 1.09 ratio. Nasdaq declining issues over advancing issues
came in at 1.21, and down-volume beat up-volume by a 4.45 ratio. The
VIX
was up 0.27 at 21.01. The TRIN
was up 0.25 at 1.37.
Slightly below average volume
kept the Dow above its 50-day MA, while the S&P 500 made its fifth close
below its 50-day MA, as the Nasdaq moved to erase almost all its gains from
yesterday, staying well below its major MAs. The Semiconductor Index
(
$SOX.X |
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down 3.16%, closed below its 50-day MAs. The Broker/Dealer Index
(
$XBD.X |
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Top
sectors of the day were the Airline Index
(
$XAL.X |
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1.90% at 100.39, and the Morgan Stanley Healthcare Index
(
$HMO.X |
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up 0.93% at 531.03.
Losing
sectors of the day were the Combined Computer Index
(
$IXCO.X |
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PowerRating), down 4.10% at 830.43,
and the GSTI Software Index
(
$GSO.X |
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PowerRating), down 3.55% to 144.13.
Software and programming company Citrix
Systems (CTXS),
down 7.62% at 15.02, reported first quarter profits of 15 to 16 cents a share,
compared to analysts’ expectations of 17 cents a share.
Biotechnology company Imclone Systems (IMCL),
up 1.14% at 22.16, said studies of its drug Erbitux suggest it may increase
anti-tumor activity when combined with other chemotherapy drugs.
Computer hardware maker Compaq Computer Corp
(CPQ),
down 3.23% at 9.28, announced that first quarter profits met or beat analysts’
expectations as revenue came in at $7.7 billion.
Semiconductor company Microchip Technology
(MU),
down 2.75% at 30.05, increased its fourth quarter earning outlook, citing an
improvement in orders.
Software maker JDA Software
(
JDAS |
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PowerRating),
up 12.17% at 31.52, raised its earnings and revenue targets for the first
quarter after taking a big hit last week on negative news.
Communications services company Verizon
(
VZ |
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PowerRating), down 3.41% at 42.70, said that it expects to miss earnings estimates by
a penny and will take a $2.5 billion non-cash write-down. Also affected by the
news was SBC Communications
(
SBC |
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PowerRating), down 4.46% at 34.90.
Internet infrastructure company Cisco Systems
(
CISCO |
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PowerRating), down 8.40% at 14.82, suffered the effects of negative comments
from RBC Capital Markets, who said technology spending remains "elusive."
July quarter revenue estimates have been cut to $4.9 billion from $5 billion.
Fast food company Wendy’s International
(
WEN |
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PowerRating), up 3.78% at 37.30, came in with better than expected earnings as
several brokerages raised their estimates on the company.
Photo giant Eastman Kodak
(
EK |
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PowerRating), up
4.47% at 32.43, benefited from an upgrade from Salomon Smith Barney to
"outperform" from "neutral."
From TM’s proprietary Implosion
List, communications services company BellSouth Corporation
(
BLS |
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PowerRating) lost
2.33 points.