-- Wednesday, October 21 --
STRUT OF THE TECH BLUE CHIPS
In the wake of superlative earnings reports from both Microsoft and IBM, the technology sector spikes upward.
In almost simultaneous earnings reports after the market closed Tuesday, Microsoft (MSFT) blew past its per-share expectations and IBM posted solid earnings gains while reporting momentum into the fourth quarter. Accordingly, the entire tech sector responded optimistically, with the tech-saturated Nasdaq index diverging radically from the Dow. Although both indices ended the day in positive ground, the Nasdaq gain normally represents about 175 Dow points.
Another divergence worth noting occured in the Dow transports average, which slid downward despite positive earnings from major airlines. The skid might be attributed to profit-taking, according to the "buy on rumor; sell on news" principle.
Today marks the sixth straight positive trading session for the Dow, equaling the year's longest upward streak. Does today's action represent a piercing of the 8,500 resistance level discussed in yesterday's Closing Bell? Not really. When dealing with a trading level as high as 8,500 points, the index could dance around it by a couple of hundred points without registering a convincing breakout.
TIDBITS: Citigroup (CCI) posted negative earnings due to poor performance in the crumbling Russian market, and executives proclaimed public "embarrassment" over the earnings and general fiscal performance.
SECTOR WATCH: Technology was the clear winner today, with Microsoft and IBM lifting companies like Dell and Cisco Systems. The oil sector continues to struggle, with both Exxon and Amoco reporting discouraging earnings. Eli Lilly's positive quarterly report lifted the drug industry companies. Transportation issues fell on average, despite good airlines earnings.
TECHNICAL ANALYSIS: One disturbing technical number was released early this morning, when housing starts were reported down for the second straight month. The 2 percent drop defied predictions of an uptick in building starts, and such divergences in broad-based industrial activity is very disturbing to analysts. Murmers circulated today about a possible recession, but what day doesn't host such speculation?
LOOKING AHEAD:
Thursday: Earnings season flood continues as more than 500 companies release quarterly reports. Watch for Xerox (XRX), Transatlantic Holdings (TRH), Transamerica (TA), Sunbeam (SOC), Sears (S), Procter & Gamble (PG), Quaker Oats (OAT), Maytag (MYG), Ingersoll Rand (IR), Gateway 2000 (GTW), Coca Cola (COKE), Chevron (CHV), Cooper Industries (CBE). Finally, don't forget Tootsie Roll (TR).
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closing Bell -- a daily market update.
See it to believe it! Read online or subscribe free.
bradhill.com
** Index closings; Advance-Decline; gainers & losers
** Essential information for those who have a life
** Links to essential news stories around the Web
** Concise text summary of the day, with a sense of humor
** Links to news sites and investment advice sites
** No graphics; no Java; no delays; nice design
** Designed for beginners; informative for everyone
Thank you for reading, and good luck to everyone.
Brad Hill
bradhill.com |
