What’s Behind The Buying

February 13, 2002
Daniel Beighley

The markets jumped higher off the opening bell
then traded in a narrow range for rest of the day, closing out with decent
gains. Semiconductors led the broader markets higher, with airlines and telecoms
left in the red.

Positive earnings
news from Applied Materials and Network Appliance, combined with
an upside surprise in retail numbers, sent traders into buy mode. The
overall monthly retail number showed a decline of 0.2% for the month of January,
though excluding auto sales, sales showed an increase of 1.2%. This indicates
that our economy may be in better shape than many anticipated. The ex-autos
number was expected to be a 0.4% increase.

Overall NYSE volume
was 1,195,214,000. NYSE advancing issues were 1,989, with up volume at
758,550,000; declining issues were 1,147, with down volume at 409,421,000.
Overall Nasdaq volume was 1,567,142,000. Nasdaq advancing issues were 2,031,
with up volume at 947,224,000; declining issues were 2,031 with down volume at
602,854,000. The

VIX was down 1.07 to 22.44. The

TRIN was down 0.51 to 0.93.

With below-average
volume, today’s gains continue the trend of a lack of enthusiasm for the long
side. The Dow was able to conquer and close above its 50-day and 20-day moving
averages, and the Nasdaq was able to gap up and hold a decent gain for the day,
though halted by its downward trendline. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) climbed to close well above its 200-day moving average. The
Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) remained in its range of the past two
days, closing with a gain.

Semiconductor
company Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), up 3.22% to 47.93, grabbed the
day’s spotlight as it reported a loss of 6 cents a share compared to the 8 cents
analysts were looking for. The company expects to become profitable by second
quarter of this year, with growth increasing 10 to 15% per quarter.

Communications
services company Qwest Communications
(
Q |
Quote |
Chart |
News |
PowerRating), down 0.61% to 8.60 , was the
focus of negative attention as an article in the Wall Street Journal
claimed the company structured deals with service provider KMC to give the
appearance of better than actual earnings. Qwest denied the accusation, claiming
the relationship was disclosed to investors, and standard accounting practices
were used.

Airline manufacturer
The Boeing Corporation
(
BA |
Quote |
Chart |
News |
PowerRating), up 1.79% to 44.94, announced that it will
most likely receive 270 commercial aircraft orders, in line with last year’s
orders. Competitor Airbus is expected to receive between 300 and 350 orders.

Office supplier
Office Depot
(
ODP |
Quote |
Chart |
News |
PowerRating), up 2.31% to 18.50, announced a profit for the fourth
quarter despite a difficult economic environment. The stock traded in a range
near its 52-week high for the day.

Media giant
Viacom
(
VIA |
Quote |
Chart |
News |
PowerRating), up 0.05% to 43.21, reported a loss of 2 cents a share for
the fourth quarter, the opposite of last year’s profit of 2 cents a share. The
company said revenue was off 5%.

Computer networking
company Network Appliance
(
NTAP |
Quote |
Chart |
News |
PowerRating), up 2.82% to 19.27, rose after it
was announced that the company earned 4 cents a share, compared to the 2 cents a
share analysts were expecting. The stock was also upgraded by Thomas Weisel
Partners and Banc of America.

Soup maker
Campbell’s Soup
(
CPB |
Quote |
Chart |
News |
PowerRating), down 0.45% to 26.94, fell after announcing that
it had lost 25% in net income with a decrease in shipments, and an increase in
marketing costs.

Credit card company
MBNA Corporation
(
KRB |
Quote |
Chart |
News |
PowerRating), up 1.34% to 34.19, benefited from an upgrade
by Morgan Stanley to Strong Buy from Outperform.

What’s Behind The Buying

BUY THE FEAR, SELL THE GREED

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