What Wednesday’s Late Strength Is Saying
The major indexes opened
positive, then chopped their way down to the day’s lows in negative territory by
12:30 p.m., then rallied for a strong close, posting nice gains on the day.
The biggest advances were in
networking, Internet, broker/dealers, and computer hardware.
The biggest losses on the day
were in gold and silver, oil service, and utilities.
Strong closes on the indexes
are signs of strength, though price action fell short of taking back ground from
Tuesday’s thrashing. Lewis
Borsellino said on Bloomberg today that he believes the markets are
vulnerable and need fresh money to support current prices.
The
Dow Jones Industrial Average
(
$INDU.X |
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PowerRating) closed up 1.39% at 8424.29.
The S&P 500
(
$SPX.X |
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PowerRating) closed up 1.74% at 893.34. The Nasdaq
(
$COMPQ |
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PowerRating) closed up 2.22% at 1291.91.
The Semiconductor Index
(
$SOX.X |
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PowerRating), up 1.86%, at 290.26, closed at the top of its daily range
leaving a “hammer” to form a potential double bottom. The Broker/Dealer
Index
(
$XBD.X |
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PowerRating), up 4.84% at 400.87, closed above its 50-day SMA, just
short of its 20-day SMA.
U.S. Treasury Bonds
closed up ‘7 at 112 ’30.
In economic news, construction
spending came in unchanged from a month ago vs. a decline of 0.4% the market
was looking for.
Volume was below average at
1,524,225,020 on
the NYSE and 1,439,765,969
on the Nasdaq.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.24, and up
volume over down volume by a 3.41 ratio. Nasdaq advancing issues over declining
issues came in at 1.71, and up volume beat down volume by a 3.98 ratio. The
VIX
was down 3.92 at 39.94. The TRIN
was down 2.71 at 0.71.
The top sectors on the session were the
Networking Index
(
$NWX.X |
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PowerRating), up 5.60% at 128.10, and the Securities
Broker Dealer Index
(
$XBD.X |
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PowerRating), up 4.84% at 400.87.
Losing
sectors on the session were
the Gold and Silver Index
(
$XAU.X |
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PowerRating), down 1.71% at 69.06, and the Oil
Service Sector Index
(
$OSX.X |
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PowerRating), down 0.57% at 76.22.
Semiconductor behemoth
Intel (INTC),
up 1.51% at 16.10, was in the news again as it had its 2002 earnings estimates
cut by Merrill Lynch to 51 cents a share from 55 cents a share.
Homebuilder Hovnanian (HOV),
up 12.62% at 33.72, beat its third quarter
estimates with profits of $1.43 per share vs. a consensus estimate of 86 cents a
share.
Beverage maker
Anheuser-Busch (BUD),
up 1.21% at 53.16, was downgraded by Argus Research to “hold” from
“buy”.
Software
and programming company Take Two Interactive (TTWO),
up 0.55% at 25.25, was upgraded by Dougherty & Co. to “buy”
from “neutral”.
In the insurance business,
Cigna
(
CI |
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PowerRating), down 3.20% at 80.00, announced that it is taking a $1.1
billion pre-tax charge, and was also placed on review for a potential downgrade
by Standard and Poor’s.
Conglomerate General
Electric
(
GE |
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PowerRating), up 0.84% at 28.70, announced that it will buy ABB
Ltd.’s
(
ABB |
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PowerRating) structured-finance business for $2.3 billion. The company
also had
its estimates cut by Goldman Sachs to $1.78 from $1.85.
Recreational product maker
Oakley
(
OO |
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PowerRating), down 25.09 at 9.70, warned that third quarter earnings
will likely be 16 cents a share vs. expectations of 28 cents a share.
Food processor Tyson
Foods
(
TSN |
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PowerRating), down 1.77% at 12.19, said that it expects its fiscal fourth
quarter earnings to come in at 13 to 15 cents a share vs. previous expectations
of 24 to 28 cents a share.