What Market Seeks In The Economy
Techs and blue chips gave more ground
Wednesday amid further signs that U.S. economic recovery is further off than
some had hoped.
The Dow Jones Industrials lost 0.7%,
the Nasdaq Composite 2.2%, the S&P 500 1.1%. Volume eased on both the New
York and Nasdaq markets vs. prior session levels.
Before the open, the Commerce
Department reported that retail sales edged up 0.1% in May to a seasonally
adjusted $291.31 billion. Economists expected an increase of 0.2%. Later the
Federal Reserve’s “Beige Book,” an anecdotal survey of U.S. economic
conditions, showed the economy softened slightly in April and May.
“The market right now is looking
for the confirmation that the Fed interest rate cuts are taking effect and going
to produce profits down the road,” said Mark Minervini, manager of the
FirstMark Fund, a New York-based hedge fund, and winner of the 1997 U.S.
Investing Championship. “The market has shifted from looking to the Fed to
looking to the economy. A mild improvement in economic numbers will be taken as
good news, just like bad news once helped when the market was looking for
Fed cuts.”
Among the sectors, the AMEX Internet
Index
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3.6%, the Philadelphia Semiconductor Index
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Securities Broker/Dealer Index
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There was virtually no major sector
upside. The Philadelphia Forest & Paper Products and AMEX Biotech
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indexes eked out gains of 0.5%.
Theragenics
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device used to treat prostate cancer, reversed and fell 18.8%.
Scientific Atlanta
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12.6% on a downgrade by Josephthal & Co.
Reliant Energy
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support and fell 12.8% as Federal Energy Regulatory Commission appeared closer
to setting broad energy price caps, and the Senate, under new Democratic
leadership, also headed toward taking up the issue.
Varian Medical Systems
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jumped 12.5% on an upgrade by J.P. Morgan. The company provides oncology
systems, x-ray tubes and imaging subsystems.
Invitrogen
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Morgan Stanley began coverage of the stock with an “outperform”
rating.
Among the Dow stocks, Eastman Kodak
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gave up 1.4%, Intel
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General Electric 1.9%.