To: American Spirit who wrote (34225 ) 9/4/2001 4:23:38 PM From: Softechie Respond to Dow +47.74 at 9997.49, Nasdaq -34.66 at 1770.77, S&P -0.65 at 1132.93 : [BRIEFING.COM] Summary: Hewlett-Packard (HWP 18.87 -4.34) dropped a bombshell on traders this morning by announcing it would buy Compaq (CPQ 11.08 -1.27) in an all-stock deal. Initially, speculation was that this deal signaled value exists in the battered PC sector. However, numerous analysts badgered the deal throughout the day....Nonetheless, by early afternoon, it looked like a very promising day. Traders appeared willing to shrug off a considerable amount of bad news including: 1) SIA data shows weak billings for July; 2) Lehman analyst Dan Niles cutting estimates on Intel (INTC 26.85 -1.11) ahead of its mid-qtr report on Thursday; 3) Ericsson (ERICY 4.03 -0.95) sees no reason for improvement next year; 4) Sanmina (SANM 15.98 -2.03) warning. Despite all the bad news, the bulls appeared willing to run the market based on a better-than-expected NAPM report. However, both the Nasdaq and Dow slumped into the close.. Despite the weak trading action today, the NAPM report was clearly a positive for the market as it echoed the stronger-than-expected Chicago PMI report last Friday. The key was that there were big gains in both new orders and production to above 50%. Overall, the NAPM Index at 47.9% was much better than consensus of 44%. While the sub-50% level is the 13th consecutive and continues to reflect a sector deep in recession the improvement was unexpected. The production index rose to 52.2% as new orders rose to 53.1% -- the first positive growth seen in the year. Overall, this was great news but to feel more confident of a bottom, Briefing.com would like to see this report followed up by a strong Durable Orders report (Sep 27) and a strong Sep NAPM report...More good news came from the auto sector as Ford (F 20.25 +0.38) and General Motors (GM 54.60 -0.15) reported better than expected Aug sales. The auto component stocks fed off this news...Volume was light today, especially when you back out the 100 mln shares traded in HWP and CPQ....The leaders today were oil (consolidation), retail (ahead of Aug same store comps), cyclicals (NAPM report)....Looking ahead, Intel's mid-qtr update after the bell Thursday will be important as traders remember the punishment Sun Micro (SUNW 10.95 -0.50) received for guiding lower. Briefing.com expects traders to be cautious heading into that call.DJTA +0.8%... DJUA +0.5%... SOX -3.4%... DOT -4.4%... XOI +0.5%... NDX -3.1%... BTK -0.7%...
