(Partially off-topic: Closing Bell update)
Closing Bell -- a daily market update.
See the Closing Bell site for index closings, links, and charts:
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LEAVING THE DOW IN THE DUST
Good news from a Nasdaq heavyweight sparked the tech-oriented index to a 2.6-percent rally, equal to about 300 Dow points. The blue chips couldn't have cared less.
It's not unusual for the Nasdaq to diverge upward from the Dow on a daily basis, but rarely is the divergence as startling as today. While the blue-chip Dow dropped a fraction of a percent, the Naz added over 60 points to its average. Internet stocks registered their strongest performance in recent memory, but the big news surrounded Intel (INTC), which announced a settlement of its antiturst suit with the FTC.
The Dow enjoyed its day in the sun Friday, when it reached a new high. Still, with Advance-Decline market internals in bad shape, some technicians aren't certain the Dow has broken into safe territory. The lack of breadth in recent rallies leaves many analysts wishing more stocks would participate in big-cap rallies such as last Friday's. If strong relative performers continue gaining, and underperformers continue to be dominated, the health of the market's breadth will worsen.
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SECTOR WATCH: Today's sector results represent the Nasdaq's dominance, with all technology industries showing strength, and banks, brokers, and finance companies sliding slightly. Oil service firms continued their strong emergence from the depths of the past year (see Technical Analysis). Gold turned in a shining performance.
ITEM OF THE DAY: Good news can bless small companies. When it happens twice in one week, it blesses that company's shareholders. Shares of 7thStreet.com (SEVL), an Internet learning environment, leaped upward Friday on the announcement of a tenancy deal with America Online (AOL), then again today when the company disclosed a residency agreement with GeoCities, the online community center that has 9 million visitors per month. GeoCities will soon be part of the Yahoo! empire, no doubt expanding its traffic count. America Online and GeoCities will both feature 7thStreet's online tutorials on Internet and software topics.
TECHNICAL ANALYSIS: In the midst of a record-breaking stock market resurgence, one surprising sector has outperformed all the others. Surprising, because it has been beaten down so relentlessly since 1997, to a point of unresponsiveness. Oil service stocks -- primarily ocean and land drillers -- have suffered from a double blow: Lowering crude oil prices and industry consolidation that has reduced the need for specialized service contractors. Companies like Halliburton (HAL), Transocean Offshore (RIG), and Schlumberger (SLB) are represented on the 15-stock Oil Service Index (OSX). The OSX has forged something of a breakout in the last three trading days, shooting above its 50-day moving average. A longer-term look, however, indicates just how far the index has fallen, and how much ground it has to make up.
CHARTS at the Closing Bell site: bradhill.com
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A bi-weekly column published in Raging Bull, covering the life and times of millennial investing. Cutting-edge fact with a dash of speculation.
by Brad Hill
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LOOKING AHEAD:
Thursday: Retail sales, released by the Department of Commerce at 8:30 a.m. ET.
biz.yahoo.com
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Closing Bell -- a daily market update.
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Brad Hill
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