Why Technology’s Down Move Lacks Conviction

November 19, 2002
Daniel Beighley

The
major indexes were choppy going in early trade, though managed to
rally to its intraday highs by 2 pm ET, where the bears grabbed the edge and
drove prices into negative territory for the close. Technology suffered the
heaviest losses, though lack of volume took away conviction for the move. News
wise there was little to inspire.

In economic news, the October consumer
price index gained 0.3% vs. an expected 0.4%, and the core (ex. food
and energy) came in at an expected 0.2% increase. Also, the September international
trade numbers showed a deficit of $38 billion vs. the $37.8 billion
expected.

The 10-year U.S. Note
was +075 at 114 045.

The Dollar was +0.42 at
105.80.

Volume was slightly below
averageÂ at 1,304,888,000 on
the NYSE, and 1,606,133,000
on the Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.26, and down
volume over up volume by a 1.53 ratio. Nasdaq declining issues over advancing
issues came in at 1.36, and down volume beat up volume by a 2.67 ratio.

The
VIX
was +0.25 at 31.36. The TRIN
was +0.08 at 1.22.

Stocks in
the news:

Conglomerate General
Electric
(
GE |
Quote |
Chart |
News |
PowerRating), +1.27% at 23.90, was the subject of a Wall Street
Journal article which claims a number of analysts believe the company will
announce a $1-$2 billion charge at its next investor meeting Thursday.

Financial services company H&R
Block
(
HRB |
Quote |
Chart |
News |
PowerRating), +6.67% at 37.53, rallied after it announced it reached a
settlement in a Texas class action suit over the company’s refund-loan program.

Construction and agricultural
machinery company Deere Co.
(
DE |
Quote |
Chart |
News |
PowerRating), +3.82% at 49.90, posted earnings
$0.05 ahead of expectations as it benefited from an increase in sales of
agricultural equipment.

Retailer Williams &
Sonoma
(
WSM |
Quote |
Chart |
News |
PowerRating), +1.49% at 23.70, beat its third-quarter earnings
estimates by $0.03 with profits of $0.13 per share.

Office supply company
Staples Center
(
SPLS |
Quote |
Chart |
News |
PowerRating), +13.30 at 18.39, beat its third-quarter earnings
estimates by $0.03with profits of $0.27 per share.

Biotech firm Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating), -2.72% at 39.61, was downgraded by USB Piper Jaffray to
“underperform” from “market perform”.

Chip maker Intersil
(
ISIL |
Quote |
Chart |
News |
PowerRating),14.14% at 17.05, was downgraded by UBS Warburg to “hold”
from “buy” with a price target of $20.

Also in the chip biz, Advanced
Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating), -14.41% at 5.58, fell after Standard & Poor’s
cut its credit rating on the company due to competitive pressures and a weak
market.

Consumer product company The
Clorox Co.
(
CLX |
Quote |
Chart |
News |
PowerRating), +0.15% at 45.86, was downgraded by Salomon Smith
Barney to “underperform” from “in-line” on the belief that
growth will be slower in the future and valuation.

Electronics instrument and
controls company Agilent
(
A |
Quote |
Chart |
News |
PowerRating), +22.05% at 16.60, shot up after posting
better than expected earnings.Â

From TM’s Implosion List,
biotech firm AmerisourceBergen Corporation
(
ABC |
Quote |
Chart |
News |
PowerRating), -6.94% at
59.00.

Why Technology’s Down Move Lacks Conviction

BUY THE FEAR, SELL THE GREED

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