Directionless Drifting

June 14, 2000
TradingMarkets Editors

Despite a tame Consumer Price Index showing almost no inflation, stocks
responded mixed Wednesday in uninspired and directionless trading that saw
blue-chips edge higher and technology stocks fade toward the end of the session.
At the close, the Nasdaq had lost 1.4% while the Dow added a mere 0.6%. The
S&P 500 was flat.

The May CPI posted a 0.1% increase which was smaller than the 0.2% increase analysts expected while the
closely-watched core rate came in at the expected 0.2%.Â

Light volume continued to spotlight the lack of conviction in the market, as
1.39 million shares traded on the Nasdaq and 928 million shares traded on the
NYSE. Both figures were about even with Tuesday’s volume levels.

“On a short-term basis, I think the odds that the Fed may not raise
interest rates this month is a positive influence. I also believe that after
this week, the market is going to switch its focus to earnings,” said Ricky
Harrington, Senior Vice President and Technical Analyst, Wachovia
Securities:Â

“The economy is indeed showing signs of slowing down. The big problem
with that is that while interest rates could stabilize, earnings will likely be
impacted by a slower economy. When we get into the July earnings season,
earnings will be very important,” he added.

According to preliminary numbers, the Nasdaq fell 53.69 to 3797.37, the Dow
rose 66.11 to 10,687.95, and the S&P 500 added a point to 1470.54.

Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) was one of the bright spots in the Dow and Nasdaq,
gaining 2 5/8 to 70 1/2 after a tactical legal victory that will send its
antitrust case to the U.S. Circuit Court of Appeals.Â

Looking ahead, the May industrial production and capacity utilization numbers
are due out Thursday at 9:15 AM ET.

Directionless Drifting

BUY THE FEAR, SELL THE GREED

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