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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (51958)	5/23/2002 4:56:31 PM
From: stockman_scott	Read Replies (2) \| Respond to of 65232

U.S. stocks battle back to end higher By Julie Rannazzisi Thursday May 23, 4:26 pm Eastern Time NEW YORK (CBS.MW) -- In a replay of the previous day's action, stocks mounted a late comeback Thursday, inspired by a powerful biotech rally after an FDA panel gave the green light to a key drug from Biogen. And an unexpectedly powerful increase in durable goods orders assured investors that the U.S. economy was indeed on the mend. While stocks have been able to string together two winning days in a row, some market participants weren't impressed. "Traders are trying to flatten out positions ahead of the long weekend. We had a good durables number but saw no follow-through [after the pop] in the futures markets. Stocks have since rebounded but there's no volume to back it up," remarked Jay Suskind, director of trading at Ryan Beck. He said it was more a case of sellers taking to the sidelines than buyers really stepping up. "It's tough to draw conclusions when the market is so lethargic and trendless." The Dow Jones Industrial Average (CBOT: ^DJI - news) gained 58 points, or 0.6 percent, to 10,216. Green lights flickered in shares of General Electric, SBC Communications, J.P. Morgan Chase, Exxon Mobil and 3M. The latter (NYSE: MMM - news) tallied a 0.7 percent gain after reaffirming late Wednesday its second quarter and 2002 targets. But Home Depot, McDonald's, Intel and Walt-Mart continued to languish in the minus column. While chip and networking issues stayed in negative terrain, gains in the software and Internet sectors more than compensated for the shabby showing. The Net segment was inspired by the rally in Priceline.com shares (NasdaqNM: PCLN - news) after the company reaffirmed its second-quarter financial targets. In the broader market, only defense issues traded lower while investors bid up biotech, financial, utility and airline shares. And gold stocks continued to surge as gold futures reached $322.80 for a gain of $4.50. The Nasdaq Composite (NasdaqSC: ^IXIC - news) sprinted 24 points higher, or 1.4 percent, to 1,697 and the Nasdaq 100 Index (NasdaqSC: ^NDX - news) ascended 22 points, or 1.8 percent, to 1,286. Robert Dickey, managing director at RBC Dain Rauscher, said the markets' back-and-forth action is akin to "driving home on the freeway during rush hour." "You're constantly switching from the gas to the break, but eventually you get there. And so will the market, although the road will continue to be bumpy. Of particular concern are those stocks that are still hitting new lows, like Corning, or those that are breaking below some important support levels, like Home Depot. Stocks in these categories will take longer to bottom and base than the average stock," Dickey continued. The S&P Investment Policy Committee said the stock markets are being bogged down by concerns over terrorism, accounting scandals, regulatory scrutiny, earnings skepticism and a weakening dollar. "Investors are now wondering how to protect their retirement assets and are looking toward international equities and gold. We think the market is trying to put in an intermediate-term bottom, but we are not there just yet," S&P said. In the broad market, the Standard & Poor's 500 Index (CBOE: ^SPX - news) climbed 1 percent while the Russell 2000 Index (CBOE: ^RUT - news) of small-capitalization stocks put on 1.5 percent. Volume came in at 1.17 billion on the NYSE and at 1.67 billion on the Nasdaq Stock Market. Market breadth was positive, with winners scooting past losers by 20 to 11 on the NYSE and by 20 to 14 on the Nasdaq. Richard Dickson, technical strategist at Hilliard Lyons, believes that unless breadth and volume numbers improve dramatically, it's unlikely the market will muster enough strength to sustain a rally. "While all the market indexes produced impressive gains last week, the price gains produced no significant changes in the overall technical condition of the market. The Dow failed to sustain its rally above 10,300 resistance, and the S&P failed to hold above initial overhead resistance at 1,100 while Nasdaq managed to rally only up to its intermediate-term downtrend line before weakening," Dickson pointed out. He also noted that sentiment models reveal a high degree of complacency -- never a good sign. Durable goods jump 1.1% in April April durable goods orders jumped 1.1 percent vs. the 0.8 percent increase expected by economists. The data were even stronger when stripping out the more volatile components: excluding transportation orders, in fact, durables climbed 2.9 percent and they flew 3.4 percent when excluding defense. Aside from a big drop in aircraft orders, all of the report's components made significant headway: brisk demand gave autos an eye-popping lift while nondefense capital goods -- a good gauge of business investment -- rose a healthy 1.9 percent. "All eyes are on investment. This report seems to indicate that the collapse in investment is behind us and we are in the beginning stages of a rebound. While this report will not change Alan Greenspan's thinking, it may cause him to start the re-evaluation process. We get two more orders reports before the August FOMC meeting. Watch them carefully," commented Joel Naroff, chief economist at Naroff Economic Advisors. In other news, weekly initial claims fell 9,000 to 416,000. and check economic calendar and forecasts. Software issues wobble, Qwest slides The broad software group (CBOE: ^GSO - news) extended its losing streak to four straight sessions after Deutsche Bank Securities lowered estimates on a litany of names in the group following a similar, though more widespread, call from Goldman Sachs on Wednesday. Deutsche Bank said companies do not yet feel confident enough to pull the trigger on significant capital expenditures and that it thus appears less likely the third quarter will mark a big pickup in business. Second-quarter earnings estimates were lowered on Siebel Systems (NasdaqNM: SEBL - news) , PeopleSoft (NasdaqNM: PSFT - news) , Manugistics (NasdaqNM: MANU - news) , Vignette (NasdaqNM: VIGN - news) and Documentum (NasdaqNM: DCTM - news) while 2002 estimates were cut on Vastera (NasdaqNM: VAST - news) and I2 Technologies (NasdaqNM: ITWO - news) . The mentioned stocks traded mixed, with Siebel up 2 percent, Vignette up 1.3 percent and Manugistics up 3.4 percent while PeopleSoft slumped 1 percent. But Oracle (NasdaqNM: ORCL - news) added on 1.5 percent following an upgrade from RBC Capital Markets to an "outperform" from a "sector perform" on belief that most of the bad news that may materialize is already reflected in share prices and that the company's risk/reward ratio is very favorable. And Peregrine Systems (NasdaqNM: PRGN - news) jumped 3.9 percent after announcing that it would restate financial results for fiscal years 2000 and 2001 as well as the first three quarters of fiscal 2002 due to accounting errors and irregularities. Additionally, the software company said the SEC had launched a formal investigation into its accounting practices. Chip stocks took a hard hit on Thursday, with many equipment stocks extending Wednesday's losses, which came on worries that Intel (NasdaqNM: INTC - news) would take the hatchet to its spending plans in 2003. Goldman Sachs sought to reassure investors Thursday, telling clients that market speculation on Intel's plans for next year were "overblown." Goldman said it's "simply too early to tell" what Intel's intentions are. Intel gave up 3.3 percent while equipment leader Applied Materials slid 4.5 percent and KLA-Tencor shed 4.8 percent. Qwest Communications (NYSE: Q - news) traded down 3.2 percent after agency Standard & Poor's lowered late Wednesday its long-term corporate credit rating on the telecom concern based on its view that the company's risk profile has increased in the past several quarters due to continued weakness in the overall economy and ongoing competitive threats. In the fiber-optic space, Ciena (NasdaqNM: CIEN - news) slid 6.2 percent after posting a fiscal second-quarter loss that was a mile wider vs. the year-ago period. Merrill Lynch reiterated its "reduce/sell" rating on Ciena following the company's results, pointing out that the firm's concentration on customers like Qwest, Sprintand AT&T, all of which are paring back their spending plans, could continue to hold back revenue growth. Rival Corning fumbled 6.5 percent and Lucent declined 2.3 percent. Among the retailers, Williams-Sonoma (NYSE: WSM - news) rallied 11 percent after posting first-quarter earnings that handily surpassed expectations and also raised its outlook for the second quarter. Biotech issues took off late in the trading day as Biogen (NasdaqNM: BGEN - news) remained halted as a Food and Drug Administration advisory panel reviewed the firm's experimental psoriasis drug, Amevive. Among other biotech issues, ImClone Systems (NasdaqNM: IMCL - news) erased 4 percent after climbing earlier on following the resignation of CEO Samuel Waksal. Troubled cable company Adelphia Communications (NasdaqNM: ADLAE - news) tumbled after changing hands Thursday fro the first time since May15, when it was halted following the announcement that its chief executive and founder, John Rigas, was stepping down. On Thursday, the company said Rigas family members were resigning from its board of directors. Read Movers & Shakers for the latest individual stock action. Bonds make a quick reversal to downside In a violent whipsaw, fixed-income securities relinquished considerable gains and slid into the minus column, taking their cues mostly from the stock market's late comeback. The 10-year Treasury note descended 1/8 to yield (CBOE: ^TNX - news) 5.135 percent while the 30-year government bond slipped 9/32 to yield (CBOE: ^TYX - news) 5.66 percent. In the currency sector, the dollar jumped 0.5 percent to 124.97 yen as the Bank of Japan intervened for a second straight session to block what it views as a too-rapid ascent of the Japanese currency. The euro, meanwhile, declined 0.5 percent to 92.12 cents.

To: Dealer who wrote (51958)	5/24/2002 4:16:58 AM
From: stockman_scott	Respond to of 65232

For Spying, Bush Needs Friends By David Ignatius The Washington Post Friday, May 24, 2002 PARIS -- The week of terror-mania that preceded President Bush's European trip illustrated a problem that the journey itself can help fix, if the president and his advisers act wisely. If all the finger-pointing and second-guessing in Washington proved anything it is that the war against terrorism will be won not by military might but by good intelligence. The greatest arsenal in human history could not help the CIA, the FBI or the White House see what was in front of their noses in the months leading up to Sept. 11. Despite all the fears, suspicions and memos, senior officials could not connect the dots. And why? Because the reality of intelligence work is that you won't find the needle simply by combing through the haystack. To find something, you need to know where to look. And you need friends to help you search. Here is where the president's trip matters. Good intelligence requires good allies who can help the United States gather information through a process that is politely called "liaison." Allies provide the intelligence platforms that can help America learn the secrets it could not obtain on its own. Sometimes these allies advertise their cooperation, as is the case with the British. Other times, the links are hidden by noisy public disagreements, as is often the case with France. Occasionally, the liaison arrangements are truly secret, as appears to be the case in many parts of North Africa and the Middle East. Military power can help persuade reluctant allies to play along. No country wants to be the next Afghanistan, after all. But military power alone isn't going to win this war. It certainly won't stop all the scary people administration officials were warning Americans about last week: the apartment-bomb terrorists; the explosives-strapped-to-the-waist terrorists; the dirty-nuke terrorists. They're probably out there somewhere right now, and the best hope of stopping them is good intelligence. What does the United States bring to the espionage game? The truth is that over many years and different administrations, the United States has never been particularly good at spying. Perhaps it goes against our national character. But the fact is that most of America's great agents have been walk-ins -- defectors who volunteered their services. Only very rarely has the United States managed to penetrate a hostile intelligence service on its own. If the CIA is only semi-competent at spying, the FBI is positively awful. The bureau is a police organization, at bottom. It's good at tailing people; it's good at piecing together forensic evidence. It's good (sometimes) at running down leads. It's not so good at running agents, except in the movies. What makes the United States powerful on the intelligence battlefield are three things: technology, which allows us to watch and listen almost anywhere in the world; money, which allows us to buy local intelligence services and run them; and a global web of alliances that creates a pervasive intelligence network. Everyone talks about the need for more spies on the ground, but the most obvious need right now is for analysts who can pull the disparate pieces of intelligence together and see the mosaic whole. It's that unglamorous part of the intelligence game where the United States failed most drastically in the months before Sept. 11. It turns out that U.S. agencies knew nearly every important fact about the al Qaeda bombers before the tragedy -- yet analysts couldn't see the picture. With all the new billions for the sexy side of intelligence -- the guys and gals in trenchcoats -- let's hope the desk-bound analysts are getting more money, too. Contrary to what some in the Pentagon seem to believe, this is not a war in which America can go it alone. Yes, America has leaped a generation ahead of its allies in weapons technology, making it inevitable that there will be more unilateral U.S. military operations. But those weapons won't get America very far without better intelligence, and for that Washington needs its allies. When it comes to terrorism, President Bush should be a listener on his travels this week, not a preacher. The Europeans have been living with it far longer than the Americans have -- and arguably coping with it more successfully. The British stayed the course patiently in Northern Ireland for a generation while IRA bombs were exploding in British cities (and while IRA fundraisers were making the rounds in America to gather support for these ghastly acts!). The French penetrated the vast Arab and North African underground in France -- and contained a terrorism problem that, a decade ago, posed a deadly threat. The Italians broke terrorist movements on the right and left, thanks to tough judges and aggressive intelligence. The go-it-alone tough guys in Washington have this one precisely wrong. Because America really is at war, it needs allies. It needs liaison. It needs friends in the shadows. President Bush has forged a fruitful alliance with his new best friend, Russian President (and ex-spy) Vladimir Putin. This week he should add to the list -- and build more of the relationships that can complement America's hard military power with the soft power that will help win this war. © 2002 The Washington Post Company washingtonpost.com