Within Striking Distance

June 12, 2002
Daniel Beighley

The markets were choppy in early trading as price action
moved north off the bell, down to its lows by noon ET, then into an uptrend that
lasted into the close. Semiconductors, oil service, and computer technology were
the biggest gainers; with gold and silver, financial, broker/dealers, and
healthcare down modestly.

The Nasdaq Composite’s low for the day was only 6% off its
September low, while the Nasdaq 100 traded to its lowest levels ever. The
S&P 500 is also just 6% form its September low, which means we’re within
striking distance of hitting levels not seen since 1998. The fact that the
indexes were able to reverse from the day’s lows gives us a bullish bias into
tomorrow.

U.S. Treasury Bonds were
up 12 at 103 ’12.

The economic event of the day
came in the form of the Fed’s "beige book," which described our
economy as undergoing modest, but uneven growth.

Market breadth was mostly
negative, with NYSE declining issues over advancing issues by a ratio of
1.08, and down–volume
over up–volume
by a 1.42 ratio. Nasdaq declining issues over advancing issues came in at 1.25,
and up–volume
beat down–volume
by a 1.29 ratio. The
VIX
was down 0.48 at 26.98. The TRIN
was down 0.22 at 1.36.

Above-average volume
moved the Dow to close at the top of its daily range after hitting a seven-month
low earlier in the day, and the S&P 500 and Nasdaq closed at the top of
their ranges after making eight-month lows earlier. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
up 3.57%, closed at the top of its range, taking back most of yesterday’s
losses. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 1.17%, closed at
the top of its range after making an eight-month low.

Software maker Siebel Systems (SEBL),
down 14.04% at 15.18, has had its earnings estimates cut by Goldman Sachs based
on the belief that the second quarter will be as difficult as the first. The
current estimates for the second quarter are 20% less than first quarter’s
earnings.

Also in the chip sector, Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating),
up 3.64% at 9.67, was upgraded by Prudential to "hold" from
"sell" based on valuation.

Broadcasting and cable TV company Univision
Communications
(
UVN |
Quote |
Chart |
News |
PowerRating), down 15.49% at 31.86, has agreed to buy Hispanic
Broadcasting (HSP)
for $3.5 billion in stock.

Auto maker General Motors (GM),
down 0.96% at 57.43, is the subject of positive comments from
JP Morgan who believes the 15%
pullback in share price for the past month is a buying opportunity. The company
is also believed to top Ford in the Harbour Report 2002, which rates the
productivity of the Big Three automakers.

Personal and household product maker Procter
& Gamble (PG),
up 4.49% at 93.00, announced that it expects fourth quarter
earnings to come in the "high teens" compared to previous estimates in
the "low teens."
The company attributes the increase to improved volume.

Appliance maker Maytag
(
MYG |
Quote |
Chart |
News |
PowerRating), up 7.02% at 45.27, announced that
they expect to beat second quarter expectations due to increased sales, margin
improvement, and cost-cutting methods.

Chemical manufacturing company Monsanto
(MON),
down 4.84% at 25.55, has lowered its guidance for the next two years based on
issues in Latin America and planting delays.

Medical equipment and
supplies company Therasense (THER),
up 2.51% at 20.00, has received FDA approval for its FreeStyle Tracker Diabetes
Management System, a glucose monitoring system that integrates with a Handspring
Visor PDA.

Within Striking Distance

BUY THE FEAR, SELL THE GREED

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