Felt Like Pamplona

July 14, 2000
TradingMarkets Editors

The Internet and tech-driven Nasdaq rally continued for a third straight day
Friday, as the Nasdaq managed to post a 1.6% gain for the day to cap a 5.5% gain
for the week. At its current level, the Nasdaq has recovered more than 1200
points from its May 24 intraday low of 3042.66.

The S&P 500 gained 0.9% thanks in part to strength in banks and
financials and was able to close back above 1500 for the first time since April
11. At their current levels, the Nasdaq, S&P 500 and Dow all remain
constructively above their respective 50- and 200-day moving averages.

Despite the fact that most market participants were on golf courses, someone
was keeping trading volume at impressive levels for a Friday in July. More than
950 million shares traded on the NYSE and more than 1.6 billion traded on the
Nasdaq.

Economic numbers across the board Friday hinted toward a cool economy and no
inflation. Most notable was the decrease of 0.1% in the Producer Price Index
core rate, which was lower than the expected 0.1% increase. For all the
year-long fear mongering about inflation, this negative inflation number helped
spark Friday’s rally.

"The better action in tech stocks, of all things on the back of Yahoo!’s
earnings, still leaves some question about the durability of their new-found
strength. The Internet stocks, especially, still seem to have limited recovery
potential though given their volatility, that could still mean a cluster of
points," said Frank Gretz, Market Analyst, Shields & Co.

"Generally speaking, however, things have clearly improved. In terms of
those techs that dominate the averages, the picture is encouraging," he
added.

According to preliminary numbers, the Nasdaq lifted 71.30 to 4246.16, the
S&P 500 added 14.15 to 1509.99, and the Dow rose 24.04 to 10,812.75.

The three day surge in Internets took the Goldman Sachs Internet index up 24%
from Tuesday’s close. Several analyst upgrades of Net blue chips like AOL and
eBay also stoked the fire. AOL volume leaped to 25 million shares Friday, which
was more than double the average volume.

Looking to next week, the Consumer Price Index for June will be released on
Tuesday at 8:30 AM ET, and Street estimates look for a 0.5% increase.

Felt Like Pamplona

BUY THE FEAR, SELL THE GREED

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