What Today’s Big Move Means
This morning’s big move to the upside is sending
indexes to their highest levels in more than two months. Computer-related shares
rallied following a Federal judge’s approval of Microsoft‘s
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antitrust settlement with the government.
Financial stocks such as American International Group rose as some investors
anticipated the Federal Reserve will lower its benchmark interest rate, already
at a 41-year low, this week.
The Standard & Poor’s 500 Index
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ET. Computer-related and
financial shares contributed almost two-thirds of the advance. The Index edged
above its 100-day simple moving average of 898 with its Friday close at 900.
Currently, look for initial resistance at 924 which represents its September
high followed by additional overhead at 930. To the downside, look for initial
support now at 918 followed by an additional floor in the area of 914.
The Dow Jones Industrial Average climbed 202.46, or 2.4%, to 8720.10,
with Microsoft and IBM accounting for
one-quarter of the gain. The Nasdaq Composite Index rose 57.35, or 4.2 percent,
to 1418.05.
The Nasdaq Composite Index
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is trading around its best levels since Aug. 23. Market internals are
notably strong as advancing volume outpaces declining volume by a 10 to 1
margin. To the upside, look for initial overhead resistance at 1,412 followed by
more significant secondary resistance in the range of 1,419 to 1,423. To the
downside, watch for initial support at 1,400 followed by an additional floor at
1,394.
All three benchmarks climbed to their highest since August. The S&P 500 and Dow
reached five-year lows on Oct. 9 and rebounded as companies reported higher
third-quarter earnings and as speculation increased the Fed will cut its
overnight lending rate of 1.75%.
Strong Sectors on the day are: Networking,
Semiconductors
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Wireless, Airline
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Storage, Computer-Hardware, Lodging, and Video Games.
Weak Sectors: Gold
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Defense
Nasdaq Market Breadth
Adv: 2114 UpVol: 11736684
Dec: 1031 DnVol: 1270361
Net: +1083 Net: +10466323
NYSE Market Breadth
Adv: 2130 UpVol: 80473311
Dec: 1042 DnVol: 15076560
Net: +1088 Net: +65396751