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Thomson I-Watch Midday Update
thomsoninvest.net
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Time 12:24 PM
Last Change %chg
DJIA 11030 121.2 1.1
Nasdaq Comp 3775.3 15.4 0.4
S&P 500 Index 1470.8 10.6 0.7
Russell 2000 505.8 4.2 0.8
PSE High Tech 1044.8 6.8 0.7
Semiconductor 937.6 -5.0 -0.5
10 Year T-Note 57.42 -0.1 -0.1
30 Year T-Note 56.8 0.1 0.1
Advance/Decline:
NYSE 1.94
NASDAQ 0.9
Volume: (millions)
NYSE 444
NASDAQ 713.43
#New Highs #New Lows
NYSE 76 19
NASDAQ 30 95
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Notable Market Movers:
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* Technology stocks have fallen under the knife again today, as
investors fret over the prospect of reduced earnings growth. Dell
Computer (DELL) provided today's reason to sell, with 2Q revenues well below expectations. Short covering and bargain hunting have
helped the NASDAQ Composite break into the plus column in the last
half-hour. However, afternoon profit taking ahead of the weekend
puts the gains at risk. Today's mild inflation report lifted
interest rate-sensitive and cyclical shares, shooting the DJIA up
more than 100 points to trade over 11,000. A strong surge in Phillip
Morris (MO) has added to the Dow's gains. The S&P 500 has overcome
its early weakness, climbing progressively higher to the plus side.
Boosting some technicians' outlook, the advance/decline line on the
NYSE has noticeably improved. Advancers have outpaced decliners by
1.85 times on the Big Board. However, declining issues are still
outweighing advancing stocks on the NASDAQ, with the advance/decline
ratio at 0.8.
* Institutional Money Flows:
Retail stocks are bouncing back from yesterday's weakness, buoyed by
short covering, bargain hunting, and this morning's strong retail
sales data. WAG has gained $1 3/8 to $33 1/2, HD has recouped $15/16
to $56 1/16, KSS is up $1 1/2 at $59, and S has climbed $1 1/8 to $31
11/16.
Financial shares are helping back the DJIA's rally. JMP has vaulted
$2 5/8 to $144 3/8, LEH has bounded $4 16/32 higher to $130 7/16,
AXP has moved $1 1/8 higher to $59 3/4, and C has gained $1 1/8 to
$72 5/16.
Computer hardware issues have remained trapped in the red. HWP is
down $2 3/8 at $109 7/8, DELL has tumbled $3 11/16 to $38 1/16, and
AAPL has slipped $1 3/16 to $46 3/8.
* The Labor Department reported that the Producer Price Index was
unchanged in July, slightly below the Thomson IFR consensus forecast
for a 1.0% rise. The core CPI, which takes out food and energy
prices, edged 0.1% higher. The flat producer prices were due largely
to the decline in energy prices. The tame data provides additional
evidence for the Federal Reserve to leave interest rates unchanged.
* The July Retail Sales figures, on the other hand, were stronger than
expected. Sales grew 0.7%, well ahead of economists' forecast for a
0.4% rise. The data suggests that consumer demand remains healthy,
despite the higher interest rates. The data runs slightly contrary to
July's weak chain-store sales report and corporate earnings
announcements.
* Bond traders are moving out of shorter-dated securities and into
longer-dated bond, even though today's economic data was benign.
The Long Bond has edged 1/32 higher to 108 3/32 to yield 5.68% amid
light trading.
* IPO Update:
Compugen Ltd (CGEN) has gained $1 3/4 to trade at $11 3/4, American
Medical Systems (AMMD) has climbed $3/8 to $11 3/8, Equinix (EQIX) has
tacked on $1 to $31, Lion Bioscience (LEON) has popped $13 1/8 to $52
13/16, and Telik has improved by $5/32 to $7 5/32.
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The following is a review of the 2 most recent I-Watch reports issued
this morning.
CPQ -- Pers Computers -- Technology
11-Aug-00 12:15:20 Compaq Computer is giving back some ground today
after rising nearly 10% in the last week and a half. Earlier this
week, CPQ broke through historical resistance levels in the low $30s
to near its 52-week high of $34. While the stock is trading down
$9/16 at $30 3/4, it is encouraging to note that volume has tapered
considerably today compared to previous sessions. This suggests that
the losses are related to consolidation, rather than institutions
significantly paring their positions. Less than 8 million shares have
been exchanged, while the 10-day average daily volume is 20 million
shares. Block trades are related to about 60% of today's volume,
barring the opening bock of 900k shares, which is slightly below
CPQ's historical levels. A few growth Smart Money investors are
taking advantage of CPQ's discounted price, as illustrated by the
I-Watch pre-trade chart. The ongoing support has helped lift the
stock off its intra-day low. Interestingly, the I-Watch post-trade
data reveals that institutional brokers have claimed 2.2 million
shares as buys, 1.3 million shares as sells, and 370k shares as
"crosses," meaning that the broker worked both sides of the trades.
MO -- Cigarettes -- Consumer Goods
11-Aug-00 11:20:08 Shares of Phillip Morris have gapped up $2 13/16
to $31 1/4 on upbeat research notes. Notably, the stock broke out of
its trading range in the upper $20s, sailing though resistance at
$30. Last night, Goldman Sachs posted a research note detailing
expectations for tobacco company prices to improve over the next
year or so, as they move past the Engle litigation. Gruntal & Co also
anticipated a break-out in the near-term, and expects MO to approach
its price targets of $31, $35, and $37 1/2. The 5-minute interval on
the I-Watch pre-trade chart shows a surge in buy message volume early
in the session, backing today's 9+% pop. I-Watch shows that some
sellers have since moved in on the gain, looking to book profits.
The selling pressure has created a ceiling just north of $31, but has
not pulled the stock significantly lower. Institutional investors are
dominating today's action, with block trades accounting for bout 56%
of total volume, excluding the opening block of 1.2 million shares.
Recently, most of the investors interested in MO were value players,
taking advantage of the stock's significant discount. However,
today's trading data suggests that some growth-oriented (likely GARP
players) are beginning to move in, supporting the move. Over 13
million shares have changed hands, making the stock the most actively
traded share on the Big Board. Today's volume is almost about double
MO's 10-day average daily volume, which given the big upside, is a
near-term positive indication. |
