RECAP & STOCKS TO WATCH FOR MONDAY, 12- 11-00
Another roller-coaster ride on the Nasdaq, but when the ride had stopped, the Composite had rallied 10.3% for the week to close above 2,900 for the first time since the end of Nov.
The election mess in Florida was once again the focus of the markets on Friday. It all started Friday morning when, in separate cases, two Leon County, Florida, circuit court judges
refused to throw out about 25,000 absentee ballots, many of which were cast for Republican candidate George W. Bush. This decision was obviously beneficial to the Nasdaq, and traders
used the ruling to propel equity prices into the close. Then, after the close, the big news hit. In a 4 to 3 decision, the Florida Supreme Court ordered a manual recount of all undervotes statewide, including nine thousand ballots in Dade County alone. Stock futures tanked on the news. The icing on the cake came on Sat., when the U.S. Supreme Court voted 5 to 4 to halt the recounts. The Court has ordered oral arguments for 11 a.m. ET on Monday.
Preceding the first Florida ruling on Friday was the non-farm payroll report, signaling a more relaxed labor market. The U.S. unemployment rate rose to 4 percent in November after holding at a 30-year low for two months, while payrolls grew 94,000 after rising 77,000 the month before. This adds another convincing element to the sustainability of this rally, and opens the door to a Fed easing.
On Friday, the Nasdaq Composite, after trading higher in 3 digits all day, finished with a 163- point gain to close at 2,916. Volume was a healthy 2.3 billion shares, with 81 stocks making new highs compared to 171 new lows. Blue chips joined the rally as well, as the Dow finished with a 95-point loss at 10,712. Volume on the NYSE was 1.3 billion shares, with 245 stocks making new highs compared to 60 new lows.
This coming week is heavily weighted in economic reports, highlighted by the CPI report on Friday, which is expected to remain steady at 0.2% (excluding food and energy). Also on the menu is Retail Sales on Wed., the PPI on Thur., and Business Inventories, which will be closely watched after Cisco’s inventory concerns, on Thur. Once again, all of these reports could be overshadowed by “Indecision 2000.”
On the technical side, Friday’s open was a bullish sign as the Nasdaq Composite gapped higher at the open and only pulled back 13 points before continuing higher over 2900. The Nasdaq 100 futures, a leading indicator for many traders, were locked limit to the upside in the pre-market, and showed similar strength as well. The focus now is that the Composite, on a 60-minute basis, is beginning to form successive higher lows, and is currently testing resistance of its 200-Day Moving Average. A chart of this can be seen here:
tradewindsonline.net
Given the scope of last week’s gains on the tier 1 stocks, we will continue to focus on money flow into the secondary tiers, and opportunities on pullbacks due to profit- taking on the tier 1’s. There is still a ton of cash that is itching to play this market.
Earnings Spotlight: Oracle Corp. (ORCL) heads the list of earnings reports this week. The tech heavyweight is scheduled to report on Thursday. Other companies reporting on Thur. include CMGI, Inc. (CMGI), Adobe Systems (ADBE), Red Hat (RHAT), Verity (VRTY), and Biomet (BMET).
DoubleClick (DCLK): Announced that on Monday, December 11, 2000, at 4:30 p.m. EST, the company will be hosting a conference call to discuss guidance for the fourth quarter. The call will simultaneously be hosted on DoubleClick's Web site under the Investor Relations section.
ADTRAN (ADTN) 28 5/64 +49/64: Company warns for Q4; sees EPS of $0.16-0.20; current EPS estimate is $0.55.Company says that revenues in both Carrier and Enterprise markets as well as in each of four product groups will fall short of original expectation.
Gateway Computer (GTW): Company has been targeted by a class-action lawsuit claiming that Gateway reported false and misleading financial results for the 3 months ending in Sept. It also alleges that Gateway failed to record the declining values from its investments in start-up companies and insisted that it was experiencing strong retail demand for PCs, despite obvious signs of weakening sales. |
