What Held Its Trading Range?

April 2, 2002
Daniel Beighley

The major indexes went south
off the opening bell, where the Dow and S&P 500 held trading ranges to close
with losses, and the Nasdaq trended down for the day, closing out with the
heaviest loss. Natural gas, Japan, and oil stocks made modest gains on the
session, with software, airline, and Internet issues suffering the day’s worst
losses.

The markets were hit with
earnings warnings and downgrades today, along with negative economic news. February
factory orders fell 0.1%, short of the 1% increase expected. The Commerce
Department said weak orders of non-durable goods were a significant part of the
decline. January factory orders rose 1.1%, short of the 1.6% expected.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.10, and down–volume
over up–volume
by a 1.90 ratio. Nasdaq declining issues over advancing issues came in at 1.57,
and down–volume
clobbered up-volume
by a 7.61 ratio. The
VIX
was up 0.76 at 20.81. The TRIN
was up 0.57 at 1.72.

Below-average volume
sank the Dow as it
tested key
support on its daily chart, while
the S&P 500 moved below its 200-day MA, and the Nasdaq made its sixth close
below its 20-day MA. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down 3.71%,
crossed below its 20-day MA. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating),
down 1.08%, made a one–month
low.

Software maker PeopleSoft (PSFT),
down 32.67 at 25.16, was hammered after the company said first quarter sales
will fall short of expectations due to a weak economy. The company was
subsequently downgraded by Goldman Sachs.

Adding to the software sector’s woes, BroadVision

(
BVSN |
Quote |
Chart |
News |
PowerRating), down 14.53 at 1.47, announced that it expects first quarter
revenue to come up short due to uncertainties in IT spending. Also down in the
software sector were Siebel Systems (SEBL),
down 6.95% at 31.82, and Oracle (ORCL),
down 2.41% at 12.53.

Drug maker Bristol-Myers Squibb Co. (BMY),
down 5.34% at 38.24, said that their inventory of wholesale drugs
“significantly exceeded” desired levels and will hurt profits. The
company will also pay Watson Pharmaceuticals (WPI),
up 1.70% at 26.86, $32 million to settle a suit over the anxiety drug BuSpar.

Also in the drug sector,
ImClone Systems (IMCL),
down 0.59% at 24.90, reported fourth quarter
earnings of 42 cents a share, compared to 52 cents a year ago.

Communications services company Qwest
Communications International (Q),
down 4.62% at 7.63, said it might write down its US West unit by $20 to $30
billion in the second quarter.Â

Media giant America Online
(
AOL |
Quote |
Chart |
News |
PowerRating), up 1.50% at 23.62, bucked the
trend of the market as Merrill Lynch said it expects the company to see a
moderate increase in first quarter revenue.

From TM’s proprietary Momentum
List, Cigna Corporation
(
CI |
Quote |
Chart |
News |
PowerRating) rose 2.51 points to 104.54.

What Held Its Trading Range?

BUY THE FEAR, SELL THE GREED

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