MARKET TALK: Nasdaq Dip Is On Relatively Soft Volume
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
2:32 (Dow Jones) You can't say the 2.2% drop on the Nasdaq Composite is a
good thing (unless you're short), but the volume isn't too hot, so the
selloff isn't as worrisome as it could be. At least that's what the chart
watchers say. If downside volume were to pick up in the next couple of days,
several technicians say 2500 might get a good test. Nasdaq down 60 at 2763,
DJIA off 110 at 10684, and S&P 500 loses 14 to 1346. (TG)
2:19 (Dow Jones) March S&Ps stay weaker, in light volume. "Now that the
election is over, we're back to watching earings and we're still in a
downtrend," one trader says. "We still have about a week of tax-loss selling
that will weigh on us." Market seems drawn to the 1365 area and if March
S&Ps can hold above it, contract could see losses limited. A move under
there could lead to a testing of lows. (DMC)
2:15 (Dow Jones) Sen. Gramm says commodities bill set to receive final Hill
approval Friday "will keep our markets modern, efficient and innovative, and
it guarantees that the U.S. will maintain its global dominance of financial
markets." It also will allow "new and important financial products - single
stock futures - to be sold in America" and "provides legal certainty for the
$60 trillion market in swaps," Gramm says. (JC)
2:09 (Dow Jones) Sell ratings from brokerage firms used to be almost
nonexistent. Nowadays, they're a little more common, though still rare.
Prudential is not messing around with Whirlpool (WHR), though, maintaining
its sell rating and $25 price target after company's weak outlook earlier.
Prudential says financial and operational execution remains inconsistent.
Shares off 3% at $40. (TG)
2:03 (Dow Jones) The 10-year yield is languishing just below technical
resistance at 5.23%. That's a weekly number, and if the 10-year is below
5.23% at end-of-day Friday, it's going for a long-term target at 5.133%,
perhaps as early as next week. (SC)
1:58 (Dow Jones) More from Goldman's Abby Joseph Cohen: Share-price momentum
was the single most important factor driving future price action during much
of 1999 and early 2000. But since April, the more important factors have
been earnings momentum, relative ROE, and a variety of relative valuation
measures. "Careful security selection, in both the equity and corporate debt
markets, will be the key to strong relative and absolute portfolio
performance in 2001," she says. (TG)
1:39 (Dow Jones) Some perplexing sentiment numbers, courtesy of Arnhold & S.
Bleichroeder's John Roque: According to Investor's Intelligence, the
percentage of bullish advisors has not been as high as it currently is since
the second week of April 2000, and the percentage of bearish advisors has
not been this low since late July 1999. It says to him that investors are
still too complacent, and while he doesn't know what it will take for
investors to throw in the towel, he sees a war of attrition instead of a
knockout. "Think Bush over Gore rather than Mike Tyson over Michael Spinks,"
he says. (TG)
1:25 (Dow Jones) Still not sure why stocks have been crushed? Fourth-quarter
profits, according to First Call, are expected to grow by 8.4%, a 46%
reduction in the growth rate that was projected just over two months ago.
(TG)
1:15 (Dow Jones) Fully 100% chance of 50 bp ease by the end of the first
quarter now priced into April Fed Funds contract (with quote of 94.015),
trader says. Trader also says economic slowdown talk, mild PPI, and drop in
retail business making participants think "Maybe the Fed will be hitting
that (easing) gas peddle a little bit faster." (CMN)
1:11 (Dow Jones) EUR/USD is testing monthly resistance at 0.8885.
End-of-trading above 0.8885 gives the market a shot at the upper 0.9100
handle. The spark for a relatively higher euro may be the cash U.S. Dollar
Index, now at 113.40, which is likely to drop to 112.52 within the next week
given it's technical failure today at 114.70. (SC)
1:04 (Dow Jones) Clorox (CLX) shares fall a second day as Wall Street
anticipates the consumer-products maker's conference call set for Friday.
Traders say the company told analysts to set aside as much as 90 minutes for
the call; that's lengthy. Traders figuring this isn't just a routine
earnings forecast, and speculation has turned to prospect of reorganization
or other substantive initiative. (ROB)
12:59 (Dow Jones) Retail sales growth may be slowing, but that's no reason
to pull the plug on mall REIT stocks, says Prudential analyst James W.
Sullivan, who maintains a strong buy on the sector. He's encouraged by
per-share third-quarter FFO growth of 12% on a market cap-weighted basis,
outstripping the overall industry, and a healthy occupancy level. (MER)
12:57 (Dow Jones) Investors around the world committed $4.2 billion of new
money to hedge funds in the third quarter, nearly replacing the $4.9 billion
outflow seen in the second quarter, according to TASS Research. The bulk of
the new money, or $3.5 billion, went into long/short equity funds, which
seek to profit by making bets against stocks expected to decline in value as
well as buying those expected to increase in value. (AMB)
12:46 (Dow Jones) Scott & Stringfellow technical analyst Richard Dickson is
still predicting a year-end Nasdaq rally, sloughing off Wednesday's sell-off
as a reflection of "general confusion" about the near-term future of
interest rates and the economy. "Yesterday represented a continued churning
around that we expect will characterize market action through the balance of
the year," he says, "though we still think this churning will have an upward
bias."
12:32 (Dow Jones) Talk about good timing. On Wednesday, one or more
investors bought more than 10,000 put options in United Parcel Service Inc.
(UPS), which would allow the holder to sell UPS stock at $60. On that day,
UPS shares closed at $62.63. Then Thursday morning, the company issues an
earnings warning, which sent the stock to as low as $58 and greatly
increased the value of the January 60 puts. A UPS spokesman wasn't
immediately available for comment. (GFC)
12:26 (Dow Jones) March Nasdaq holds around unchanged at mid-morning, as
technical buying underpins market. "They're not buying because of the
fundamentals," one trader says. Rolling of positions from December to March
also a big factor of trade, he adds. "What we're seeing is a lot of people
trying to make a decision here, whether we're going to see a Santa Claus
rally or keep going down," he says. (DMC)
(END) DOW JONES NEWS 12-14-00
02:32 PM
*** end of story *** |
