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Strategies & Market Trends : Mu Gamma Lambda -- Ignore unavailable to you. Want to Upgrade?

To: Augustus Gloop who wrote (2724)	7/26/2001 7:56:18 AM
From: Rich1	Respond to of 10077

The Big Picture Thursday, July 26, 2001 Printer-Ready Version Indexes Turn Green As Volume Expands Investor's Business Daily Stocks bounced back in higher volume Wednesday. But it’s too soon to tell whether a meaningful rally might emerge. The market has toyed with investors for the past three months. A would-be uptrend fueled by six interest rate cuts is butting up against a wall of weak profits. The result? A choppy trading range that can chew up a portfolio if you’re not careful. Cutting losses quickly is the surest way to protect yourself in any market. Wednesday offered a respite from the bad earnings news, and gave stocks a little room to run. SBC Communications (SBC) beat estimates with a second-quarter profit of 61 cents, 9% higher than a year ago. The real surprise? The No. 2 local telephone firm stuck with earlier earnings guidance for the full year, although it remained cautious. The stock, part of the Dow industrial average and the S&P 500, jumped 2.58 to 43.38. It was its best showing since late March. The Dow and S&P tied with a 1.6% gain. The Nasdaq composite climbed 1.3%. Volume rose 7% on the NYSE and 5% on the Nasdaq. The modestly heavier trading to the upside was a good way to break the market’s three-day losing streak. The sell-off tested or undercut recent lows on the major averages. But one decent day doesn’t change a trend. A few explosive sessions next week would raise the chances of a larger move. Keep an eye on the daily price and volume changes for the Nasdaq, S&P and Dow. It usually takes only one day of distribution — defined as a loss in heavier volume than the day before — to kill an attempted rally. What about after a rally gets going and makes some sizable gains? That’s when you look for three to five days of distribution over a week or two. Persistent selling on the part of mutual funds and other big investors can topple a bull market in no time. Pundits have questioned the economy’s overall health for months, but consumer spending seemed intact. Now, cracks in the household armor have surfaced. Wednesday saw restaurant stocks and some retailers fall hard. CEC Entertainment (CEC) dived 11.10, or 24%, to 34.80 on its heaviest trade in years. The parent of Chuck E. Cheese’s restaurants said second-quarter profit fell 2%, missing estimates by 7 cents. Buca (BUCA) slid 14% on huge volume after the firm lowered its third-quarter earnings estimate to 17 to 18 cents a share. Analysts expected the chain of Italian eateries to bring in 21 cents. Dollar Tree Stores (DLTR) led the retail carnage. The discount chain plunged 19% on more than five times normal trade. The firm beat second-quarter earnings estimates by a penny, but warned third-quarter same-store sales would fall 3%. Shoe retailer Vans (VANS) shed 9% on 2 1/2 times its usual volume. The company beat fiscal fourth-quarter estimates by 1 cent, but said it would only meet fiscal first-quarter and full-year fiscal 2002 views. Skechers USA (SKX) edged up slightly. But the firm has collapsed since hitting a new high May 22. It’s 49% off its peak and below its 50- and 200-day moving averages.