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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01 -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (9234)	7/25/2001 1:27:05 PM
From: Sergio H	Read Replies (1) \| Respond to of 13094

IFLO -Jim, there's positive short MA crossovers and worth keeping an eye on. Small caps are going to receive much more attention over the next year. The RUT 2000 chart looks interesting right now, testing support at 200 day MA. biz.yahoo.com <Wednesday July 25, 1:04 pm Eastern Time Small-cap stocks to outperform on strong dollar By Thi Nguyen NEW YORK, July 25 (Reuters) -- U.S. small companies, the best stock market performers so far this year, may continue to outperform large firms because their focus on domestic markets makes their earnings less vulnerable to the impact of the strong U.S. dollar, according to a study. ``With the...dollar...strong, profit growth for large-cap companies will be impacted more so than small-cap companies, and thus relative performance may continue to be better,'' said Steven DeSanctis, small cap strategist at Prudential Securities, in a note to clients. The Russell 2000 (^RUT - news) small-cap index this year is down 2.23 percent, outperforming the S&P 500 (^SPX - news) large cap index which has fallen 10.89. U.S. small-cap companies, which have market value under $2 billion, on average have generated less than 10 percent of their sales from outside the U.S. since 1992, compared with 22 percent for large-cap companies, said DeSanctis. One in four small-cap companies have exposure to foreign markets, compared to about half of all large-cap companies, he said. ``The international picture is bleak,'' said Grant Babyak, a portfolio manager at TimesSquare Capital Management who oversees $1.2 billion in small-cap stocks. ``Large-cap companies are hurt because they have lots of exposure to overseas markets. But because small cap companies focus more on the domestic market, they should be in a better position.'' A number of multi-national companies, including the world's largest computer maker International Business Machines Corp. (NYSE:IBM - news), have already stated that the continued strength of the U.S. dollar has hurt their profits in the last quarter and could further put a damper on their current quarter numbers. The lack of foreign exposure, however, doesn't make a large dent in small-cap earnings during periods of strong currency, said DeSanctis. ``Small-cap stocks have performed fairly well relative to large-cap stocks when the dollar has been strong,'' said DeSanctis. ``Although this has not been a perfect factor, the correlation between the relative performance and the trade-weighted dollar has been positive over the 30 years of data we look at.'' Small-cap technology companies, which have the highest level of sales from overseas -- 18.2 percent -- will be hit hardest. Consumer staples and industrial sectors, which also have high exposures to foreign sales, may also see another hit to the companies' bottom lines. Among small-cap companies, financial services and utilities will be hurt the least by the strong dollar as sales from abroad are only 1.9 percent and 2.1 percent, respectively, said DeSanctis.>