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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk -- Ignore unavailable to you. Want to Upgrade?

To: Rich1 who wrote (3911)	7/31/2002 10:21:28 PM
From: Rich1	Read Replies (2) \| Respond to of 206894

Home Get IBD (2 Free Weeks!) IBD Subscribe/Renew IBD Archives IBD WebLink Today In IBD The Big Picture The Real Most Active Investor's Corner Investor's Corner Archives IBD's Top 10 To The Point The Smart Investor Feature Story Internet & Technology The New America Mutual Funds & Personal Finance Leaders & Success Issues & Insights Managing A Successful Company IBD Calendar FAQ's The Big Picture Thursday, August 1, 2002 Looking for a past IBD article? Check the IBD Archives. Printer-Ready Version Stocks Shrug Off Load Of Bad News As S&P 500 Leads BY CHRIS GESSEL INVESTOR'S BUSINESS DAILY Slower than expected growth? A weakening manufacturing sector? Profit warnings from techs and retailers? The stock market barely took notice Wednesday. The session had all the ingredients for serious losses. After Tuesday's close, the bad news started rolling in the form of warnings from KLA-Tencor (KLAC) and Nvidia. (NVDA) Hot Topic (HOTT) and Children's Place (PLCE) piled on with their own negative outlooks Wednesday morning. The economic data didn't help matters. Gross domestic product grew 1.1% in the second quarter, far lower than the 2.2% Wall Street forecast. It was a big slowdown from the first quarter, which saw growth revised down to 5% from 6.1%. The recovery also looked wobbly from the heartland. The Chicago purchasing managers report, which gives you a preview of Thursday's national manufacturing survey, shifted toward neutral. The index dropped to 51.5 in July from 58.2 the prior month. Readings over 50 reflect an expanding Midwest factory sector. Under 50 indicates contraction. The Fed's beige book report on economic conditions from around the country also showed a sluggish recovery. The Boston, New York, Atlanta and Dallas Feds noted growth tapering off. The Cleveland and St. Louis Feds mentioned some improvement. The stock market headed lower in the morning. But the losses weren't that extreme. The S&P 500 retreated 1.4%. The Nasdaq lost as much as 2.8%. Volume remained tame, at least early on. Big investors, the driving force of bull and bear markets, didn't dump stocks wildly. The market looked like it would settle for modest losses on lighter volume. It would have been a respectable reaction to the day's news. But buyers swarmed in during the last 45 minutes of trading. The S&P 500 swung all the way to a 1% gain. The Dow industrials picked up 0.7%. NYSE volume expanded during the turnaround and rose 10% above the day before. The Nasdaq climbed off its lows, but still finished down 1.2%. Volume behaved perfectly. Nasdaq trading eased 6%, just what you want to see when an index declines. Small caps had the roughest day. The S&P 600 fell to its low right near the close. It lost 2.1%. The market is trying to redeem itself after Monday's huge gains on suspiciously tepid volume. Part of it is rallying in higher trading while another section falls in lighter action. Medicals are trying to re-establish their leadership from earlier in the year. Hospitals, HMOs and a smattering of other health-related stocks moved higher in heavy trading. Sierra Health Services (SIE), a managed care provider, cleared a four-week consolidation. The stock rallied 1.31 to 22.75 as volume nearly tripled. Sierra reported a 100% jump in profit last week as sales increased 14%. Tenet Healthcare (THC) popped up 2.97 to 47.58. The hospital operator, which suffered some heavy down weeks during the market's recent plunge, now stands 8% below its June high. Zimmer Holdings (ZMH) clawed its way to a new high, rising 0.82 to 37.23. The maker of orthopedic implants traded as low as 28 last week. Retailers took another beating. Three of the day's worst performers, which are underlined in the table at the top of B4 in the print edition, came from the sector. July burned more than a few as sales dropped off. Hot Topic plunged 6.90, or 30.7%, to 15.55. Children's Place Retail Stores gapped down and lost 3.35 to 18.96. Fallen leaders such as Urban Outfitters (URBN) skidded 4.50 to 23.23.