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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (2222)	1/4/2000 12:41:00 PM
From: TWICK	Read Replies (1) \| Respond to of 19219

MY OLBs are holding up nicely. Found the following article worth sharing: Screaming Sectors Financials sold off as rates rise Same old equation knocks bank stocks 4.6% By Emily Church, CBS MarketWatch Last Update: 5:11 PM ET Jan 3, 2000 Bond Report Movers & Shakers ? Stock Discussion ? Sector Indexes ? Market Snapshot NEW YORK (CBS.MW) -- Financial stocks were among the few sectors not to mislead investors at the open Monday. The group hit the skids from the start. Today on CBS MarketWatch Pullback on earnings views Sears to top Q4, fiscal year earnings targets Clinton renominates Greenspan Fogdog holiday orders up 750% Bell Atlantic offers long-distance service More top stories... CBS MarketWatch Columns Updated: 01/04/2000 12:06:16 PM ET Market strategists are laying the blame on rising bond yields. Even as Internet and tech stocks work to rewrite the markets and investments book, the relationship between financial stocks and interest rates has remained unchanged: Rising rates mean sliding financials. The banking index ($BKX: news, msgs) was recently down 4.6 percent. The index is down 8.5 percent for the last 12 months, noted Bill Meehan, chief strategist at Cantor Fitzgerald. "It's the bond. There's not a whole more to it than that," said Meehan. "It's clear that short-term rates are going to continue to be forced higher by the Fed." Insurers ($IUX: news, msgs) were off 3.7 percent and the securities brokers ($XBD: news, msgs) were down 3.7 percent. The brokers are up 55.7 percent over the last 12 months. For the latest bond yields, see Bond Report. Financials trade lower when rates head higher because the group's profits are seen as more vulnerable when rising rates impact the spread between lending and borrowing rates. Some financial industry analysts have argued recently that the banks and brokerages are less rate sensitive as they grow their fee-based businesses. Investors, however, "don't want to hear about it. The reality is that as interest rates go up, these stocks go down," Meehan said. Adding to some pressure on the group as the usual concerns about the threat of online upstarts causing fees to be lowered, he added. "I'm in that camp that says the banks' earnings are less sensitive to interest rates," said Kevin Timmons, banking analyst at First Albany. In addition to diversifying their revenue mix, the group has also become much more sophisticated with risk management as well, he added. But you can't fight the tape, he indicated. "There's so little interest in value stocks right now anyway. Some of their valuations make them look inexpensive, but no one cares." cbs.marketwatch.com Twick