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Market Summary July 17, 2001
Posted Daily Between 5 and 6:30 PM EST
by Lance Lewis
Waiting on INTC
Asia was lower last night by a couple percent. Europe was off a
percent, and the US futures were a bit lower after some bad
news from NVLS. We opened lower, traded down long enough
for you to say “time to buy the bad news,” and then we were
bouncing to the upside. We had another little selloff as we
waited for semi equipment company KLAC to speak at Semicon
West. When KLAC said they see a bottom, we took off to the
upside and never looked back. The close saw us go out right on
the high. Volume was OK (1.2 bil on the NYSE and 1.7 bil on the
NASDAQ.) Breadth was slightly negative on both exchanges.
The big sector winner was the chips as the SOX rose 4 percent
(or a little more than half yesterday’s loss.) The big loser was the
oils as the XOI fell a percent.
NVLS reported last night and said bookings would be down
about 10 percent in Q3. No attempt at hoping for a bottom was
made. NVLS opened down along with the rest of the equipment
stocks, but as KLAC got the hopers stirred up, NVLS ended up
rallying to close higher by 5 percent. What got everybody so
excited from KLAC was the fact that they said that they
reaffirmed guidance for the current quarter and said, “we think
we’ve bottomed.” When asked why they think that, KLAC
responded that since orders are looking to be flat next quarter
that indicates a horizontal line as opposed to a falling vertical
line. Thus, they see a “bottom.” Huh? So, I guess we’ll be
hearing “we’ve topped” from these guys during the next
up-cycle when they get a couple quarters of flat orders? I doubt
it. In any event, that spread hope throughout the equipment
shares that this was indeed finally “the bottom.” The chips
themselves began grinding higher along with the equipment
shares as everyone breathlessly awaited INTC tonight. A house
also touted some of the communications semis around mid-day,
which added to the party. As usual, wherever the
semiconductors went, the rest of tech followed. Financials were
higher along with everything else. The XBD and BKX both rose
3 percent. GE fell a touch. Argentina made some political
strides late yesterday towards avoiding default, and that no
doubt helped out the financials a bit.
Oil fell 49 cents and below $26. The XOI fell a percent, and the
OSX rose a percent. Gold rose $1.20, and lease rates are so
dead that they’re not worth mentioning again until something
happens. The HUI rose a percent. The US dollar index traded
higher early on but slipped to end down a touch as the day wore
on. The euro edged back up to the 86-cent area where it has met
resistance several times over the last month. Treasuries were a
little lower as Argentina’s woes slip from the front burner to just
simmering on a back burner again.
Tonight, we’ll hear from INTC and then IBM tomorrow night. We
also have Uncle Al out making a speech tomorrow as well.
Yesterday’s dose of reality from AMAT and NVLS was amazingly
forgotten today as if it never happened. And judging by today’s
romp, a lot of people have gotten themselves really worked up
for INTC and IBM. INTC and IBM better deliver something for the
hopers to hang their hats on, or we could be looking at some
real disappointment when the herd is once again confronted
with reality. |
