Mixed Performance Continues

Stocks began the 4th quarter with
slight gains before the Dow and S&P500 slipped mildly into negative territory.

Technology continued its recent out-performance with both the Nasdaq 100 and
Nasdaq Composite showing gains. Large-cap tech stocks in particular have been
demonstrating good relative strength lately, usually a good sign as the Nasdaq
tends to lead the overall market.

US treasuries are trading lower (yields higher) following the
release of the Sept. ISM Manufacturing Index. The Purchasing Managers Index came
in at 59.4 following the previous month’s 53.6. It was the 28th consecutive
month of growth in the manufacturing sector (analysis,
ISM report). The
Commerce Department released its reported that Construction Spending rose 0.4%
in August, after a 0.3% increase in July. The number was less than the consensus
estimate of 0.5% (analysis,
Commerce Dept. report).

The semiconductor sector remains strong, as do energy stocks.
On the other side of the ledger, the gold sector has fallen over the past half
hour and is now showing a decline of more than 1.9%.

Lexar Media
(
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PowerRating)
is among the morning’s biggest
percentage gainers after JP Morgan upgraded its rating on the stock from
Underweight to Overweight. The stock is rising $1.20, or 19%.

School Specialty
(
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is one of the worst
performers in the early going after its purchaser terminated a portion of the
anticipated acquisition financing and plans to engage in supplemental due
diligence. The stock is now down $9, or 18%.

With the major auto makers set to announce their monthly sales
results this afternoon, GM
(
GM |
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rallied in the first half hour of
trading. While it has come off its intraday peak, the stock remains the best
performing Dow component, up about 1.5%. Merck
(
MRK |
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is also strong,
rising by 1.4%.

Alcoa
(
AA |
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is a notable mover to the downside,
dropping by 1.6%, but keeping to its recent trading range. Exxon Mobil
(
XOM |
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and Hewlett-Packard
(
HPQ |
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are each lower by more than 1%.

Risers And Fallers

S&P 500:

EMC
(
EMC |
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+3.65%, Sabre Holdings
(
TSG |
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+3.60% and NVIDIA
(
NVDA |
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+3.35%.

Deluxe
(
DLX |
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-3.58%, MBIA
(
MBI |
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-3.54% and Rowan
(
RDC |
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-2.73%.

Nasdaq 100:

PETsMART
(
PETM |
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PowerRating)
+5.23%,

NVIDIA
(
NVDA |
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+3.35% and Staples
(
SPLS |
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PowerRating)
+2.95%.

Patterson
(
PDCO |
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PowerRating)
-2.17%,
Invitrogen

(
IVGN |
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-1.50% and Juniper Networks
(
JNPR |
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PowerRating)

-1.45%.


Strongest Sectors

Biotechnology
(
BTK |
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+1.64%,
Semiconductor
(
SOX |
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+1.57 and Airline
(
XAL |
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+1.45%.

Weakest Sectors

Gold Bugs
(
HUI |
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-1.94%, Gold and Silver
(
XAU |
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-1.57% and Oil Service
(
OSX |
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PowerRating)
-0.88%.

Dow -32.42 10,536.28
Nasdaq +4.62 2156.31
S&P 500 -2.50 1226.31
NYSE Nasdaq
Volume 953,547,000 838,733,000
Up Volume 461 513
Down Volume 392 261
Advances 1667 1571
Declines 1441 1319
New Hi’s 176 139
New Lo’s 31 31

Ashton Dorkins

ashtond@tradingmarkets.com