What Could Fuel Follow-Though Tomorrow

May 1, 2002
Daniel Beighley

The indexes were off to a
negative start this morning as price action shot south for the first hour, then
moved sideways into a midday rally that carried on into the close. Worth watching will be whether a positive spin from the media on news from the Middle East can provide sufficient fuel for some follow-through at tomorrow’s open. The Dow and
the S&P 500 closed positive, with the Nasdaq down slightly. Gold and Silver,
oil service, and healthcare were the biggest gainers of the day, with Internet,
computer hardware, and software leading the losers.

U.S. Treasury Bonds were
up 12 at 102′ 22.

The markets were hit with negative news from the tech
sector, while the day’s key economic release added to the disappointment. The
Institute of Supply Management Index dipped to 53.9% for April from March’s
55.6% reading. Analysts were looking for a 55.3% reading. Tony
Crescenzi said the level corresponds with a GDP rate of 4.1%.

Market breadth was
mixed, with NYSE advancing issues over declining issues by a ratio of 1.57, and
up–volume
over down–volume
by a 2.57 ratio. Nasdaq declining issues over advancing issues came in at 1.12,
and down–volume
beat up–volume
by a 2.28 ratio. The
VIX
was down 1.26 at 22.25. The TRIN
was down 0.13 at 0.61.

Above-average volume had the
Dow close above its 200-day MA for the second consecutive day, as the S&P
500 closed above its 1080 resistance mark, and the Nasdaq bounced off its 61.8%
retracement from its September low to January high. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
up 0.28%, was shy ofÂ its 200-day MA, and closed for the fifth day in a row
below this mark. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up 0.87%, was
unable to take out yesterday’s high.

Personal computer maker Hewlett-Packard (HWP),
down 1.40% at 16.86, won the favor of a Delaware judge who dismissed a lawsuit
from Walter Hewlett who sought to block the company’s plan to buy Compaq
Computer (CPQ).

Also in the personal computer industry, Dell
Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), up 0.53% at 26.48, said that despite a lack of
corporate spending, it was well positioned to succeed in this environment.
Merrill Lynch concurred as it reiterated its “strong buy” rating on
the stock.

Internet communications company Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), down 6.48% at 13.70, said that it plans to buy two privately held
companies, Hammerhead Networks and Navarro Networks, in a $258 million stock
deal.

Computer hardware maker Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating), down 14.79% at 6.97, announced the retirement of Edward Zander, its
president and chief operating officer. Two other executives form the company
have left in the past two weeks.

Software maker Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating), down
5.87% at 9.45, reported that a senior sales executive had resigned, adding to
the company’s recent top level departures. The company also had its profit
outlook trimmed by Lehman Brothers.

Software maker Adobe Systems (ADBE),
up 0.40% at 40.12, announced that its second
quarter earnings
will meet forecasts due to an increase in demand from its Photoshop software.

Biotechnology company Gilead Sciences (GILD),
up 6.36% at 33.10, reported a first quarter
loss of 2 cents a share vs. an expected loss of 6 cents a share. This time last
year the company lost 11 cents a share.Â

Broadcasting and Cable TV company Comcast
Corp. (CMCSK),
up 11.36% at 29.79, beat its first quarter
revenue estimates with an increase in subscriber growth for its QVC Home
Shopping
channel.

Gold mining company Barrick Gold (ABX),
up 2.54% at 20.58, said earnings came in lower than expected and has reduced its
outlook for the year due to a decline in production.

Business services company KPMG Consulting
(KCIN),
down 5.14% at 16.60, posted earnings of 15 cents a share for the quarter,
compared to a loss of 83 cents a share a year earlier. The company said demand
for consulting services has weakened.

From TM’s proprietary Momentum
List, accident and health insurance
company PacifiCare Health Systems
(
PHSY |
Quote |
Chart |
News |
PowerRating) was up 4.75% at 31.70.

What Could Fuel Follow-Though Tomorrow

BUY THE FEAR, SELL THE GREED

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