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Thomson I-Watch Midday Update
thomsoninvest.net
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Time 12:11 PM
Last Change %chg
DJIA 11137.9 -77.2 -0.7
Nasdaq Comp 4078.6 -3.5 -0.1
S&P 500 Index 1503.39 -6.5 -0.4
Russell 2000 529.86 0.2 0.0
PSE High Tech 1145.5 -4.6 -0.4
Semiconductor 1116.7 -15.4 -1.4
10 Year T-Note 58.16 0.1 0.1
30 Year T-Bond 57.55 0.0 0.1
Advance/Decline:
NYSE 0.91
NASDAQ 0.92
Volume: (millions)
NYSE 408.92
NASDAQ 702.86
#New Highs #New Lows
NYSE 68 21
NASDAQ 59 29
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Notable Market Movers:
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* Without a fuse to light the market, the Dow Jones Industrial
Average has fizzled 0.7%, despite a strong performance from Dow-
component JP Morgan (JPM). JPM has surged along with the rest of
the financial sector on consolidation speculation, while drugs,
retailers, and industrial stocks have languished. The Nasdaq
Composite has outperformed the broader market, though the tech-
laden Index recently slipped back into negative territory. While
most bellwether technology issues are lower, the losses are only
fractional. Volume is light across the board as traders await
Friday's employment data.
* Institutional Money Flows:
The confirmed $90 per share buyout of DLJ Inc (DLJ) by CSFB
continues to boost brokerage firms. NITE has shot up $1 3/8 to $31
3/4, RJF has gained $1 3/8 to $30 1/8, BSC has risen $2 3/4 to $65
7/8, and AGE has moved up $1 27/32 to $56 1/4. Insurance stocks
are up sharply after analysts commented on the potential for
consolidation in the industry. LNC has vaulted $2 7/8 to $50 3/16,
AIG has added $1 74/16 to $87 9/16, and JP has advanced $2 11/16 to
$64 7/16.
Retailers are under mild selling pressure after an analyst at UBS
Warburg predicted that sluggish sales would continue through the
end of the year. WMT has fallen $1 3/16 to $48 1/4, GPS has given
up $1 3/16 to $25 9/16, and HD has lost $1 1/8 to $48 9/16.
* The Index of Leading Economic Indicators slipped an expected 0.1%
for the third straight month. Orders for consumer goods and
materials, nondefense capital goods, and vendor performance all
fell, while the consumer expectations and average weekly
manufacturing hours rose. Although some believe that three
straight monthly drops signal a recession, the guideline is
unproven. The figure does, however, confirm that economic growth
is slowing.
* Bonds are lower as traders look ahead to Friday's employment data
and a slew of corporate telecom debt that is expected to come to
market in the coming months. The 30-year Bond is down 5/32 at 106
9/32, while the yield stands at 5.76%
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The following is a review of the 2 most recent I-Watch reports issued
this morning.
GPS -- Apparel Stores -- Services
30-Aug-00 12:01:34 Retailers continue to come under pressure ahead
of tomorrow's chain store sales report. Shares of the Gap have sunk
$1 3/16, or 4.4%, to $25 9/16, underperforming many of its peers.
Concerns over the company's Old Navy distribution difficulties as
well as weak demand at the Gap stores are keeping shares under
pressure. I-Watch's pre-trade chart illustrates that institutions
continue paring their holdings, despite the weaker share prices. A
few value holders have offered some support, creating a floor around
$25 3/8, narrowly above GPS' 52-week low of $25 1/16. Institutional
activity is heightened today with 54% of total volume attributable
to block volume. One particular block stands out- at 11:17 AM, 250k
shares changed hands at $25 7/16, or the best ask, which indicates
that a buyer was behind the deal. However, many investors are still
leery after the company's string of earnings warnings, waiting for
GPS to "show me the sales" before they add to positions. This will
prevent the stock from achieving any significant recovery in the
near-term. That said, keep an eye on I-Watch and GPS' price/volume
action for indications that supply may begin to dry up. For example,
just under 2 million shares have traded today, well below the 10-
day average daily volume of 3.8 million shares.
SO -- Electric Utilities -- Utilities
30-Aug-00 11:35:44 Electricity producer, Southern Company is
extending its month- long climb, trading up $1 1/4 at $29 3/4, a
new 52-week high. Since the end of July, SO has gained 20% as value
investors continue to stock up on shares. A few growth players are
taking notice of the stock, which has aided its move up. Notably,
SO broke through resistance in the mid $20s to move towards record
territory (SO's all-time high is $31 9/16). Helping power today's
gains, UBS Warburg posted a positive report on major electricity
suppliers, finding that the group is still undervalued. The analyst
cited projected strong 3Q earnings and expectations for the
valuation gap between suppliers and distributors to expand, in
favor of suppliers, due to high power prices and supply shortages.
Additionally, Southern Company's spin-off of its IPP (independent
power producer) will add value. Brokers continue to bid for shares
of SO on I-Watch even at these higher prices, which is considered a
bullish indication for the near-term. The 5-minute interval view of
I-Watch shows steady support up to $29 1/4. As expected, the gains
have drawn a few sellers, though the supply has not weighed
significantly on SO today. Institutional money is driving the
session-roughly 65% of the volume can be traced to block activity.
Over 1 million shares have changed hands, approaching the 10-day
average daily volume of 1.4 million shares. While there will likely
be a brief period of consolidation in upcoming sessions, look for
continued institutional support on I-Watch, which should allow the
stock to overcome resistance. |
