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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (29435)	3/16/2006 7:59:09 PM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 95622

Nasdaq Reverses Lower As Chips Falter BY JONAH KERI INVESTOR'S BUSINESS DAILY Posted 3/16/2006 A steep drop by chip stocks triggered an ugly reversal on the Nasdaq in hefty volume Thursday. The composite started the session up as much as 0.5%. But the Nasdaq turned tail, falling late in the day to close at its session lows. It finished down 0.5%. Volume swelled 11% to more than 2.4 billion shares. That signaled a distribution day for the Nasdaq, its third in the last four weeks. The Philadelphia semiconductor index swooned 3.2%, hitting a 10-week low. Kulicke & Soffa (KLIC) led the way down. The maker of bonding wire, automatic test equipment and expendable tools for the semiconductor industry dived 20%. The firm told investors at a mid-quarter update that it sees some "softening" in both the PC market and flash-memory chip makers. The company also said it expects June revenue to be down sequentially from prior quarters. The news spooked bigger-name chip stocks, as Applied Micro Devices, (AMD) Marvell Technology Group (MRVL) and others suffered losses. Highly rated wafer probe card maker FormFactor (FORM) skidded 7% in brisk volume. Meanwhile, crude oil prices climbed more than 1%, also depressing the Nasdaq. Those twin tidings had less effect on most NYSE stocks. The Dow industrials, NYSE composite, S&P 500 and small-cap S&P 600 all climbed to five-year or all-time highs. The 500 did give up some of its early gains. But its 0.2% advance made it five days in a row for the big-cap index. Rising oil prices often have a dual, conflicting effect on the market. Big spikes in crude can raise inflationary fears among investors. But higher oil prices usually fuel gains for energy stocks, which make up a big chunk of indexes such as the S&P 500. On Thursday several of the market's top performing groups were oil- and gas-related. Other pockets of strength cropped up as well. An array of retail groups fared well. Select medical stocks also nabbed gains. HealthExtras (HLEX) zoomed 12% in rapid trade, notching an all-time high. H.E.R.E.I.U. Welfare Funds tapped HealthExtras to be its provider of pharmacy benefit management services starting in June. The market sometimes goes through periods of divergence, with different areas moving in different directions. Thursday was the first such major divide in several weeks. Still, keep an eye on the weakening chip sector and other major tech drivers. Though the Nasdaq remains near its peak, it's the only major index that isn't establishing daily new highs lately. Leading stocks should continue to provide a good measuring stick. The IBD 100 fell 0.6% for the day. But it's still up 4.1% the past five trading days.