Short-Term Upward Bias
Stocks opened lower as the same
scenario played out in Thursday’s session…light volume, selling and more bad
news for the markets as retailers reported July sales figures.
Breadth for the day was mixed as
NYSE advancers led decliners 1,706 to 1,376. As for breadth on the Nasdaq,
decliners led advancers by a ratio of 17 to 14.
The CBOE Volatility Index
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closed lower 2.9% but gave us a CVR I signal up, indicating a slightly upward
bias for tomorrow’s session. Ideally, we would like to see a confluence of signals
all in the same direction indicating the bias is strong, but I am sure markets
will welcome any positive news.
The broader markets attempted a
turnaround in the last half hour of the trading session and closed mixed for the
session. The good news for the day was the major indexes closed off the lows of
the day. The Dow Jones Industrials closed flat for the day, while the Nasdaq Composite lost
fractionally 0.1%. Overall, the session was good for traders as the indexes
managed to escape the claws of the bear by not testing potential support levels.
The U.S. dollar has made a three-month
closing low vs. the Eurodollar, which helped propel the Gold and Silver Index
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higher for the session by 4.8%. The index closed above its 50-day and 200-day
moving averages, breaking out of a multi-week trading range. Newmont Mining
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Also moving higher in the session was
the Oil Services Index
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followed by the Oil Index
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Sectors losing ground in the session
included the Securities Broker Dealers Index
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its fourth day of descent after pulling back from the lows, only to meet resistance
at its 50-day average.
The Biotechnology Index
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did not fare well in the session either, losing 1.0% and closing weak. The only
thing positive is the index in exhibiting very oversold conditions which could
cause a reflex rally in the sector.
The GSTI Internet Index
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closed off 1.6% and the Airline Index
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Some individual stocks in the green
were C MAC Industries
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announced that it would acquire the company for $2.7 billion. SLR fell 9.9% on
the news.
Dillards
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after the retailer announced that same-store sales for July rose 7% from the
same period a year ago and outpacing the company’s rivals in the group.
Retailer AnnTaylor Stores
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gained 10.5%
Tycom Limited
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up 5.2%.
Geron
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ahead of President Bush’s decision on whether stem cell research will be allowed
to receive federal funding.
Losing ground in the session were
Verity
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PowerRating) which fell 24.2% after warning that Q1 revenues would be
about half of what the company reported last quarter. The company expects
revenues to come in between $20 million to $24 million and warned that it
expects a 12 cent loss for the quarter.
Urologix
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news that Colorado MEDTech
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of Urologix’s Targis Cooled Thermo Therapy Systems had received an FDA warning
letter.
Salem Communications
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shares fell 15.8% on what appeared to be some profit-taking by traders.
Retailer Abercrombie & Fitch
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closed lower 17.0% on news that July sales were lighter than expected and earnings
estimates for Q3 and Q4 would not meet analysts’ expectations.
Pharmaceutical Resources
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shares lost 11.6%.
WMS Industries
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after announcing sales fell almost 20% for the quarter.