A Pause Before The Next Leg Up?
With four straight wins and a 14% jump last week, the Nasdaq returned from
the holiday weekend in sedated mood as it gave back 2.6% on fairly light volume.
News that Intel would trim Pentium chip prices and a fresh downgrade on the chip
giant further eroded any optimism that last week’s gains would continue, and
that also weighed heavily on the SOX.
Strength in oils, consumer stocks and cyclical kept the blue chips afloat, as
the Dow gained 0.3% and the S&P 500 eased just 0.3%.
As expected, post holiday volume remained light with just 900 million shares
trading on the NYSE and 1.52 billion shares changing hands on the Nasdaq. While
the light volume pullback may signal a healthy resting phase, most analysts were
staying cautious about the immediate-term prospects for stocks.
“The stock market’s upside success of the past 5 to 6 trading days has
produced increased banter of a ‘Spring Rally,’ said Brian Belski, Fundamental
Market Strategist, U.S. Bancorp/Piper Jaffray.
“While we are not one to look a gift horse in the mouth, 5 to 6 trading
days of prowess does not exactly wipe away nearly four quarters of pain. After
all, the market has exhibited multiple relief rallies over the past 9 to 12
months that were unable to muster enough validity to turn the tide,” he
added.
According to preliminary numbers, the Nasdaq fell 51.86 to 1909.57, the Dow
added 31.62 to 10,158.56, and the S&P 500 eased 3.82 to 1179.68.
Top sectors were integrated oils
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On the weaker side were computer technology
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biotechnology
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down 3.6%.
Earnings season kicked off with better-than-expected numbers by Citigroup
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The financial services behemoth posted earning of 71 cents per share, topping
estimates by a penny. Citigroup, however, eased .35 to 49.65 on the news.
Among standouts were Plug Power
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Openwave Systems
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America Online
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cover story in Barron’s. News that AOL had surpassed 29 million subscribers also
bode well for the online/entertainment giant.
Dow winners were Exxon Mobil
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Eastman Kodak
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and Intel
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Looking ahead, the Consumer Price Index for March and the March new housing
starts will be released Tuesday at 8:30 AM ET. Analysts expect to see a 0.2%
increase for both the CPI and the core rate, and a figure of 1.63 million for
the housing starts.
Due at 9:15 AM ET are the capacity utilization numbers and March’s industrial
production report. Capacity Utilization is expected to be 79.2% and industrial
production is expected to be flat.