What Propelled Biotech Up 2%…

April 18, 2002
Daniel Beighley

With an opening reversal, the
major averages went south for the first part of the session until a terrorism
scare sent the price action for a sharp fall to the daily lows, where it quickly
recovered into a mild ascent into the close. The three major averages closed
slightly down. Biotechnology, healthcare, and pharmaceuticals were the top
gainers, with semiconductors, airline, and Internet stocks with the biggest
losses. Closing strongly, the Biotechnology Index
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) powered
past its 20-day MA and stopped just short of its 50-day MA. Tomorrow’s action
could see a test of this mark. The strongest
stocks in the biotech sector today were IDEC
Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating), Cephalon
(
CEPH |
Quote |
Chart |
News |
PowerRating), Protein
Design Labs
(
PDLI |
Quote |
Chart |
News |
PowerRating) and MedImmune
(
MEDI |
Quote |
Chart |
News |
PowerRating).

The event of the day occurred
in Milan, Italy, with a small plane crashing into a skyscraper. Officials do not
believe terrorism was involved, though the markets had a knee-jerk reaction to
the downside before fully recovering shortly later. In economic news, the Labor
Department said initial jobless claims were up 1,000 to 445,000.
Economists polled by Thompson Global Markets were looking for a drop to 415,000.

Market breadth was mixed, with
NYSE declining issues over advancing issues by a ratio of 1.02, and down–volume
over up–volume
by a 1.30 ratio. Nasdaq advancing issues over declining issues came in at 1.11,
and down–volume
beat up–volume
by a 1.79 ratio. The
VIX
was up 1.13 at 21.31. The TRIN
was up 0.46 at 1.27.

Average volume on the day
carried the Dow, the S&P 500, and the Nasdaq below their 50-day MAs
with closes at the top of their intraday ranges. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
down 3.04%, remains above its 50-day MA. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 0.59%, is on its 50-day MA in the middle of its intraday
range.

Weighing on the Dow, conglomerate Honeywell International
(
HON |
Quote |
Chart |
News |
PowerRating),
down 5.33% at 38.30, said that its earnings had dropped 12% due to weaker sales
and has dim expectations for the near future of its business.

Also in the Dow, McDonald’s
(
MCD |
Quote |
Chart |
News |
PowerRating), up 5.33% at 28.61, managed to
beat its earnings expectations, though its earnings fell 33% for the quarter.

Express carrier United Parcel Service
(
UPS |
Quote |
Chart |
News |
PowerRating), up 0.19% at 61.02,
said that it does not see any signs of improvement for this quarter or the next.

Data storage specialist EMC Corp
(
EMC |
Quote |
Chart |
News |
PowerRating), up 5.76% at 11.00,
reported a first quarter loss that beat expectations, and raised its
expectations for the second quarter.

Semiconductor equipment maker KLA-Tencor
(
KLAC |
Quote |
Chart |
News |
PowerRating), down 4.44% at
65.61, beat its fiscal third quarter expectations, though the results were much
lower than last year’s.

Mobile phone maker Nokia (NOK),
down 12.26% at 18.10, said that sales for 2002 will rise between 4%
and 9%,
falling short of the 15%
predicted.

Chip maker Advanced Micro Devices Inc. (AMD),
down 14.97% at 12.60, reported a first quarter
loss of 3 cents a share, beating analysts’ consensus of a loss of 6 cents a
share.

Computer hardware maker Apple Computer Inc.
(AAPL),
down 2.68% at 25.41, beat its first quarter
earnings expectations of 10 cents a share by a penny.

Also in the computer hardware sector, Hewlett–Packard
(HWP),
down 2.41% at 18.20, has announced that its shareholders have approved the
proposed acquisition of Compaq Computer Corp (CPQ).

Software and programming company Computer
Associates International (CA),
unchanged at 18.49, said that the U.S. Justice Department has closed its
investigation into the company’s acquisition of
Sterling Software without taking action.

Europe’s largest software maker SAP
(
SAP |
Quote |
Chart |
News |
PowerRating), up 1.69% at 34.83,
reported a better than expected first quarter profit and reaffirmed its
expectations of 15% revenue growth.

Dow component and computer hardware maker International
Business Machines (IBM),
up 4.88% at 88.95, said that it expects to meet earnings forecasts for 2002 by
earning $4.16 a share. The company also said its service sales may grow at a
percentage rate in
the double digits by the end of the year.

From TM’s proprietary Momentum
List, insurance company Anthem Inc
(
ATH |
Quote |
Chart |
News |
PowerRating) rose 5.56% at 68.25.

What Propelled Biotech Up 2%…

BUY THE FEAR, SELL THE GREED

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