And Then There Were Three….
Stocks opened
up mixed and traded higher early on in the session Monday.
Trading was pretty muted as traders
were taking the “wait and see” approach, ahead of the Federal Reserve Board’s meeting tomorrow. Consensus is that the Fed will cut rates by 25 basis
points. Hopefully the Fed will provide a clearer picture as to which way the
economy is heading.
What is promising is that the Conference
Board’s leading, coincident and lagging indicators are pointing to a recovery
for the U.S. economy, primarily due to the monetary actions the Fed has taken.
However even with this indicator showing recovery, the markets are not biting
yet. Once again there must be some confirmation that the recovery is for real,
such as positive earnings news and strong rallies on good volume.
Breadth for the day was positive with the
NYSE advancers leading decliners 1745 to 1356. The Nasdaq advancers led
decliners by a ratio of 16 to 15. Volume
picked up a bit in the session.
Looking at volatility indexes,
the CBOE Volatility Index
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$VIX.X |
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100 Volatility Index
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$QQV.V |
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three (3) CVR signals pointing to an upward bias tomorrow ahead into the FOMC
meeting.
The broader markets fared as follows:
The Nasdaq Composite gained 0.7% and the Dow Jones Industrials tacked on 0.7%.
Sectors moving higher in the session
were the Retail Index
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$RLX.X |
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The Semiconductor Index
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gained 1.0% as it continues to trade in a tight range below its 50- and 200-day
moving averages.
Moving higher also was the Consumer
Index
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moving average.
Lower in the session was the Gold and
Silver Index
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$XAU.X |
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the middle of its W-shaped pattern. The index closed off 0.7%.
The Biotechnology Index
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slid lower 0.6% as it is testing support at 480 range.
The Oil Services Index
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closed off 1.8% as it pulls back from testing its pivot point of a double
bottom.
Krispy Kreme Donuts
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KKD |
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higher 11.2%.
Home improvement company Lowes
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LOW |
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shot higher 7.9% after the company posted earnings of 42 cents a share beating
analysts’ consensus of 41 cents a share according to a poll taken by Thomson
Financial/First Call.
Toy store giant Toys “R” Us
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TOY |
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gained 7.2% after reporting Q2 numbers, in line with analysts’ expectations. The
company reported a Q2 loss of 15 cents a share. However the CEO said the company
is “well positioned” to return to profitability by Q4 and will benefit
from the improvements in the remodeling of the stores.
United Natural Foods
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UNFI |
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tacked on 9.3% on an upgrade by Tucker Anthony from Buy to Strong Buy.
Tellium
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Sliding in the session was Enterasys
Networks
(
ETS |
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Lear
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LEA |
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Ford Motors
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F |
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after being downgraded by a number of analysts after the company announced a
restructuring plan to cut up to 5000 white-collar workers.
Greenmountain Coffee
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shares were hammered losing 21.0% after the company said that
it has revised its fiscal 2002 financial outlook lower.
Numerical
Technologies
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Shares of Extreme Networks
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EXTR |
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lost 26.5% after being downgraded by Morgan Stanley from Outperfrom to Neutral.