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INSIGHT - Nasdaq composite seen underperforming
Reuters Story - June 12, 1997 14:39
%INSI %STX %HOT %CORA %U/I .IXIC INTC V%REUTER P%RTR
By Richard Jacobsen
NEW YORK, June 12 (Reuter) - Recent relative weakness in
the Nasdaq composite compared to other major U.S. stock indexes
is a sign that further underperformance is likely from the
composite index, technical analysts said on Thursday.
The Nasdaq composite has been sapped of momentum
seen in other market sectors due to weakness in several key
high technology components, including Intel Corp ,
analysts said.
The composite index was up about four points, or 0.3
percent, at 1412 in afternoon trading Thursday.
It lagged the Dow, which shot up 101 points, or 1.34
percent, at 7676, and the S&P 500, up 12 points, or 1.4
percent, at 881.
The blowout strength in blue chips has kept the composite
index from significantly pulling back for now, said Gary
Kaltbaum, technical analyst at J.W. Charles.
"Once the Dow and the S&P (500) stop, I think the Nasdaq's
really ready to come down hard," he said.
Analysts cited technical support on the Nasdaq composite in
the 1350-to-1375 range.
"My sense is that we're going to see underperformance from
the (Nasdaq) composite," said Peter Green, vice president of
technical research at Gruntal & Co. "We may see some downside
pressure, but I don't think we'll see anything of great
significance."
Intel was down 3-1/2 at 144 after a Goldman Sachs analyst
cut his 1997 earnings estimate on the semiconductor giant and
Cowen and Co downgraded its rating on the stock to neutral from
buy.
While the broader market powered ahead, technicians pointed
to warning signs that Wall Street was nevertheless closing in
on a near-term top.
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