Where Support Is Holding…

August 27, 2002
Daniel Beighley

The
markets were strong off the open, though turned sharply bearish after
the first five minutes, before a mild rally at around 10:30 am ET turned into a
slide south into the close.

Nice gains were made
in gold and silver, while oil, chemicals, and banks made only slight advances.

Heavy losses were
recorded in semiconductors, healthcare, Internet, and biotechnology.

Today’s action saw
the Dow and S&P 500 hold above their 50-day moving averages, while the
Nasdaq closed below this level, led down by the semiconductors. The 50-day
averages are closely watched by institutional players, and are now serving as
support.

The Semiconductor
Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down 5.91 at 316.87, closed below its 20-day moving
average, and was halted at its upward trend line. The weekly chart on the semis
illustrates the potential for new 52-week lows in the near future, which could
potentially drag down the whole market.

The Broker/Dealer
Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 1.94% at 412.75, remains cocked in a bullish
cup-and-handle formation.

In economic news,
key releases gave the markets mixed signals, as the Conference Board reported
that consumer confidence came in at 93.5, well below July’s 97.4 reading,
and the 97.0 expected by analysts.

Also, as durable
goods surprised with a reading of 8.7% vs. an expected 1.4%. The Commerce
Department said a 7.3% rise in orders excluding defense was the largest ever
recorded.

U.S.
Treasury Bonds finished down 1 ’01 at 109 ’03.

Volume was
on the light side at 488,514,000 on the NYSE, and
753,410,000 on the Nasdaq.

Market
breadth was negative, with NYSE declining issues over
advancing issues by a ratio of 2.19, and down volume over up volume by a 1.48
ratio. Nasdaq declining issues over advancing issues came in at 3.16, and down
volume beat up volume by a 2.11 ratio. The
VIX
was up 0.44 at 32.73. The TRIN
was up 0.62 at 1.47.

Chip giant Intel
(INTC),
down 5.23% at 17.18,Â has announced that it only sees moderate growth in
its third-quarter with an absence of pick up in technology spending by
corporations.

Merrill Lynch hit
the retail industry with several downgrades before the bell this morning.
Downgrades to “sell” are: Dollar Tree (DLTR),
down 10.60% at 25.12, Nordstrom (JWN),
down 4.76% at 19.17, and Shopko Stores (SKO),
down 10.44% at 14.83. Also downgraded are: Barnes and Noble (BKS),
down 1.52% at 22.65, Borders Group (BGP),
down 3.02% at 17.98, BJ’s Wholesale Club (BJ),
down 3.62% at 25.25, Costco (COST),
down 5.97% at 32.72, Target (TGT),
down 2.20% at 35.00, Talbots (TLB),
down 5.00% at 32.06, Coach (COH),
down 1.44% at 26.52, Ann Taylor (ANN),
down 7.63% at 26.50, The Limited (LTD),
down 5.45% at 15.95, Oakley Inc. (OO),
down 5.98% at 13.20, Sports Authority (TSA),
down 11.42% at 6.20, Too Inc. (TOO),
down 7.97% at 24.00, and Williams Sonoma (WSM),
down 9.25% at 22.65.

Merrill also hit the
aluminum sector with lowered estimates on Dow component Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating),
down 1.36% at 26.70.

Hospital chain Health
South
(
HRC |
Quote |
Chart |
News |
PowerRating), down 43.94% at 6.71, gapped down and hit a 52-week low this
morning this morning after the company announced it will spin off its surgery
center in a tax-free deal.Â

Construction
services company Toll Brothers (TOL),
down 3.55% at 25.80, beat its third-quarter earnings expectations by 4 cents
with profits of 70 cents a share.

Personal services
retailer Regis Corp. (RGIS),
down 2.81% at 24.55, beat its fourth-quarter earnings by 2 cents, with profits
of 45 cents per share.

Pharmaceutical
company and Dow component Johnson & Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating), down 1.72% at
54.75, announced after the close Monday that the federal government will not
intervene in a lawsuit filed against it by a former employer who has alleged
inappropriate manufacturing practices.

Investment services
company Alliance Capital (AC),
down 2.07% at 33.00, has been listed as a top pick among a group of asset
managers it raised earnings and price targets for.

Insurance company
Lowes Corp. (LTR),
down 2.47% at 51.56, has been downgraded by Salomon Smith Barney to
“outperform” from “buy”.

From TM’s
proprietary is a member of TM’s Implosion
List, semiconductor company KLA-Tencor
(
KLAC |
Quote |
Chart |
News |
PowerRating) was down 5.83% at
34.21.

After the bell today
Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating), down 4.30% at 14.21, announced after the bell
earnings in line with expectations, and reiterated its earnings outlook.

Where Support Is Holding…

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources