Nasdaq Hangs Tough
Following an inflation-tame Producer Price Index, stocks finished mixed
Friday, with the Nasdaq gaining 1.3% and the blue-chip averages edging lower.
Biotechs, semiconductors, and networking stocks helped the Nasdaq while banks
and retailers weighed on the Dow and S&P, which slipped 0.5% and 0.3%
respectively.
The PPI came in flat, which was better than the 0.1% increase analysts expected, while the core rate showed a 0.2% increase, which was higher than the
expected 0.1%. Despite the mixed results, the market concluded that inflation
certainly is not accelerating, and that helped further the case that the Fed may
be close to the end of its tightening cycle.
What impressed traders most, though, was the staying power the Nasdaq
exhibited following last week’s big gains. For the week, the Nasdaq gained about
60 points, but more importantly, it closed solidly above both its 50- and
200-day moving averages.
According to preliminary numbers the Nasdaq gained 49.37, the Dow fell 54.66
to 10,614.06, and the S&P 500 eased 4.72 to 1456.95.
Volume eased about 10% from Thursday’s levels, with 1.26 billion shares trading on the Nasdaq and 785 million trading on the NYSE.
"Very simply, the market is shaping up very well. Leading growth stocks
are starting to form out very nice bases, and there’s starting to be a lot of
them. That tells us that on the next big volume day to the upside, we’re going
to have another move up here, and I’m talking about from A-to-Z," said Gary
Kaltbaum, Chief Technical Analyst, J.W. Genesis Securities.
"It’s just amazing that it’s all happened in three weeks. You’ve had a
big volume move up, and the pullback consolidation over the last few days has
been quiet and on light volume. That’s exactly what you want to see," he
added.
Top-performing sectors included biotechnology
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airlines
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On the downside were banks
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down 3.1%.
Leading the biotech index higher were Protein Design Labs
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Gilead Sciences
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Therapeutics
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Genomic-related stock winners included Human Genome Sciences
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22 to 139 9/16, Affimetrix
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Genomics
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Technology high fliers closing near their highs of the day were Turnstone
Systems
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109 5/8, and Akamai Technologies
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Looking ahead, the next big economic numbers due out are May’s retail sales on Tuesday and the Consumer Price Index on Wednesday.