A couple of good articles from CBS Marketwatch tonight on the marker action today and then on the Intel downgrade today. First, the article on the market.
cbs.marketwatch.com
[SNIP}
<<U.S. stocks rally as data pleases
Nasdaq shakes off early Intel dip, Dow plays the odds
By Tomi Kilgore, CBS.MarketWatch.com
Last Update: 4:30 PM ET March 1, 2004
NEW YORK (CBS.MW) -- U.S. stocks closed sharply higher Monday in their biggest rally in two weeks as investors cheered a report showing that manufacturing activity remained at strong levels for a fourth straight month in February.
The technology sector, attempting to recover from six-straight weeks of declines, withstood some early weakness in shares of semiconductor giant Intel, which was prompted by a downgrade by J.P. Morgan, to bounce back strongly.
The Dow Jones Industrials Average ($INDU: news, chart, profile) soared 94.22 points, or 0.9 percent higher, to close at 10,678.14 , with all but two of its 30 components gaining ground. According to the "Stock Trader's Almanac," the Dow Jones average has posted gains on the first trading day in March six times in the past eight years.
The gains came after The Institute of Supply Management's index on February manufacturing activity fell to 61.4 percent from January's 20-year high of 63.6 percent, missing expectations of about 62.1 percent (read more). But economists pointed out that the index has been above the 60 percent mark in each of the last four months, something that's happened only nine times in the past 20 years.
"Although manufacturing growth appeared to slow slightly in February, this report is still consistent with a strong cyclical upswing in manufacturing continuing, especially in light of lower customer inventories," said Bear Stearns chief market economist John Ryding. "This report also shows that employment prospects in manufacturing appear to be improving rapidly.">>
The article continues on to address the potential continuation of the rally.
{SNIP]
<<Rally not over
Despite the consolidation seen in stocks over the past month and a half, UBS equity strategist Gary Gordon said he does not think the rally is over, yet.
"We assume investors will buy until it is patently clear that they shouldn't," Gordon said in a note to clients.
He believes the market will receive "mostly positive reinforcement" in the near term from continued better-than-expected earnings reports, and as consumers, flush with cash from the tax refund season, keep on spending.
In addition, the strong but softer-than-expected manufacturing data, and weakness in construction spending, may have also helped soothe fears of an overheating economy, and a sooner-than-hoped for rise in interest rates.
"I think there's a little optimism on the sense that the interest rate scenario, where many people were expecting an interest rate hike by the end of the first half, is probably not going to happen at this point," said Barry Hyman, equity market strategist at EKN. Listen to audio report.
He added that stocks were coming off a "decent short-term oversold market, technically speaking."
UBS' Gordon said the overall earnings outlook and other positive news should help the S&P 500 reach 1,200 at some point in 2004, and potentially to 1,300, or even 1,400.>>
[SNIP} |
