Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (8297)	2/19/2004 12:41:01 PM
From: russwinter	Respond to of 110194

Reuters Volume drop may key imminent pause for stock bulls Thursday February 19, 12:36 pm ET By Nick Olivari NEW YORK, Feb 19 (Reuters) - Major U.S. indexes may be hovering at two-year highs, but investors look like they are starting to lose interest, using volume as a guide. The number of shares traded on both the New York Stock Exchange (News - Websites) and the Nasdaq stock market has been below its 90-day average for 11 of the last 12 days, and investors said it may be a sign that the 11-month rally is losing momentum. Fear of exactly when interest rates will rise and harder earnings growth comparisons after the best quarter for profits in 10 years, are making investors a little hesitant about buying stocks, investors said. "Earnings were surprisingly good and there was a rush to buy securities. But now we are at a point where year-over-year gains in earnings will start slowing," said David Ellis, director of asset allocation, at BB&T Asset Management, which oversees $14 billion. Couple "the Fed and interest rates, and there are lot of things to give us pause." Total volumes on both the Big Board and Nasdaq peaked most recently on Jan. 30, and then began to trend downward. On Wednesday, some 1.79 billion shares changed hands on Nasdaq, compared with the 90-day average of 1.89 billion, according to Reuters analytics. Similarly, just 1.36 billion shares traded on the Big Board, compared with the 90-day average of 1.39 billion. WANING INTEREST "A lot of the hope and hype from the end of the prior year starts to wane" after the opening earnings period, said Andrew Valerie, equity strategist at LPL Financial Services. "People say 'We hear what you are saying,' but there is a wait-and-see to see how it plays out." With 451 Standard & Poor's 500 (CBOE:^SPX - News) companies having reported fourth-quarter results, Thomson First Call (News - Websites) is predicting earnings growth of 28.1 percent for the final quarter of 2003. That would make it the best period since the third quarter of 1993 and drive earnings growth for 2003 to 18.3 percent. That final tally is also bittersweet, as analysts are forecasting just 12.8 percent earnings growth in 2004, providing much less incentive for investors to buy stocks going forward. And to be sure, volume would probably have been below the three-month average for each of the last 12 days without the unsolicited offer from cable TV company Comcast Corp. (NasdaqNM:CMCSA - News) on Feb. 11 to buy entertainment company Walt Disney Co. (NYSE:DIS - News) for about $50 billion in stock. The day of the announcement some 69.6 million Disney shares changed hands, nine times its three-month daily average volume, according to Reuters analytics. Comcast saw 73.6 million shares traded, 9.1 times its three-month average daily volume. Though the frenzy was centered on those two stocks, by day's end the positive news had impacted investor sentiment across the board, making it the only day this month when volume broke above the three-month trend on each market.