The Next Cut
Stocks opened lower Monday.
Markets
continue to slump as we head into the long holiday weekend.
Eyes are now on the Federal Reserve
Board’s overseas counterpart, the European Central Bank (ECB), as the ECB is
meeting on Thursday to decide whether they should cut interest rates. Analysts are speculating that the ECB will cut rates by 25 basis points
at this meeting.
The ECB has been very stingy on their rate cuts as it has only cut rates once
this year.
Looking over to the Pacific rim,
Japan’s Vice Finance Minister Kuroda reaffirmed his concern about the strength
of the yen and feels the FX market should continue to be monitored, a positive
sign assuming the country does the right thing — which in the past was a
different story.
Breadth for the first trading session
of the week was negative. NYSE advancers lagged decliners 1363 to 1753. On the
Nasdaq declining issues led advancing issues 1737 to 1390.
The CBOE Volatility Index
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$VIX.X |
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closed up 0.6% while the Nasdaq 100 Volatility Index
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$QQV.X |
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2.8%. We received mixed signals for the S&P and the QQQs on the close. The
VIX triggered a downward bias for tomorrow’ session while the QQV continued to
show a slight upward bias going into the session. With that said, caution should
be heeded.
As for the broader markets, they fared
as follows: Nasdaq Composite lost 0.2% and the Dow Jones Industrials fell 0.3%.
The Semiconductor Index
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$SOX.X |
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gained 1.9% clearing its 50-day moving average and testing its 200-day moving
average.
The Chemical Index
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$CEX.X |
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closed flat still trading above its 50- and 200-day moving average.
And the Oil Services Index
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$OSX.X |
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gained an anemic 1.0% still well below its 50- and 200-day moving average.
On the downside the GSTI Internet
Index
(
$GIN.X |
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Also was the Interactive Week Internet
Index
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$IIX.X |
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PowerRating) which closed lower 1.1% and the Transportation Sector
Index
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$TRX.X |
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Looking at some individual stocks
gaining in the session, Vector Group
(
VGR |
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Bergen Brunswig
(
BBC |
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6.4% after the FTC cleared Amerisource Health’s
(
AAS |
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PowerRating) plan to acquire the
company.
Centillium Communications
(
CTLM |
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moved up 17.1% after the company reaffirmed Q3 numbers of $46 million in revenue
and earnings of 8 cents a share.
Biotechnology company Biopure
(
BPUR |
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PowerRating)
tacked on 23.3% on the release of Phase III results of its blood substitute
Hemopure.
Global Imaging Systems
(
GISX |
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climbed 12.9%.
North Fork Bancorporation
(
NFB |
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fell 5.4%.
Thornburg Mortgage
(
TMA |
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7.2%.
And Homestore.com
(
HOMS |
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lower 13.8% after Member Works
(
MBRS |
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PowerRating) announced that HOMS acquisition
of iPlace, Inc (majority owned subsidiary) was complete.