Nasdaq ended the day with a nice gain: +61.55 (2.9%)to 2,204 climbing as much as 101 points at its intraday peak...as investors largely ignored warnings from semiconductor makers that sales for their current quarter won't meet expectations due to the slowdown in the U.S. economy...the idea being that much of the bad news in the semiconductor sector was already priced into those stocks... this signalled a modest turnaround for the whole technology sector...
Buying interest lifted all tech stocks...led by hardware, Internet and chip shares...
Dell Computer +11.7%, Cisco Systems +4%, Intel +3.7%, Sun Microsystems +6.3% and Oracle went up +3.7%. Only Qualcomm ended with a -6.1%...also JDS Uniphase gave up earlier gains and ended a -1.1% decline....
Volume was twice as heavier as yesterday but still lighter than normal to the weather in Northeast United States: 1.99 billion with winners 23 to 14 losers...
The Philly Semiconductor Index surged 5.5% though the market got more warnings in the chip sector - including revenue warnings from Xilinx and Varian Semiconductor and an expected profit shortfall from TriQuint Semiconductor... still shares shrugged off the bad news...
One question would now be if this was merely a bounce from deeply oversold conditions or if the market's upside will be sustainable over the longer haul...
Art Hogan, chief strategist at Jefferies & Co. sounded optimist and believes this is the bottom:
"A lot of the bad news is priced in and we're starting to focus on the fourth quarter and next year, when the economy [is expected] to recover. We'll continue to see earnings warnings but I think that we've bottomed on that front and have begun to turn...We're starting to get traction in the stock market. The Fed will continue to ease, though maybe less aggressively. But that's a good thing, because it'll mean the economy has improved..." he said...
Todd Gold, technical strategist at Gruntal & Co however thinks a bounce was overdue:
"People are reading too much into the [market's ability] to shrug off bad news. When you come from such oversold conditions, like the ones we've seen in the Nasdaq, it takes away from that perception..."
He sees short-term resistance for Nasdaq at 2,300..."We could get to 2,350 to 2,370 but those levels are likely to stop the rally in its tracks..."
However Mary Burnes, head of Nasdaq trading for Edward Jones, told cnnfn that it was clearly the tech stocks leading this rally. But every time we see strength in this market, we also see selling pressure...
Peter Cardillo, director of research at Westfalia Investments thinks that the market can continue to rally a little more... "People feel there are bargains out there," he said...
It looks like the oversold tech stocks are now getting some respect... and it remains to be seen whether this proves to be just another tradeable bounce or turns into a sustained upward trend...
Over all the market sentiment certainly does look much better than in February, but it's still too early to believe that the Nasdaq has secured a sustained long-term uptrend... as I said in earlier Nasdaq threads we'll have more bounces both up and down until we reach that stage which doesn't look so far away but not just now...it's still early to hold tech stocks for long term I'd say...try and make the most of the bounces in the short term but don't get too engaged...
Riz
[Edited by Riz on 06-03-2001 at 11:21 PM]
Buying interest lifted all tech stocks...led by hardware, Internet and chip shares...
Dell Computer +11.7%, Cisco Systems +4%, Intel +3.7%, Sun Microsystems +6.3% and Oracle went up +3.7%. Only Qualcomm ended with a -6.1%...also JDS Uniphase gave up earlier gains and ended a -1.1% decline....
Volume was twice as heavier as yesterday but still lighter than normal to the weather in Northeast United States: 1.99 billion with winners 23 to 14 losers...
The Philly Semiconductor Index surged 5.5% though the market got more warnings in the chip sector - including revenue warnings from Xilinx and Varian Semiconductor and an expected profit shortfall from TriQuint Semiconductor... still shares shrugged off the bad news...
One question would now be if this was merely a bounce from deeply oversold conditions or if the market's upside will be sustainable over the longer haul...
Art Hogan, chief strategist at Jefferies & Co. sounded optimist and believes this is the bottom:
"A lot of the bad news is priced in and we're starting to focus on the fourth quarter and next year, when the economy [is expected] to recover. We'll continue to see earnings warnings but I think that we've bottomed on that front and have begun to turn...We're starting to get traction in the stock market. The Fed will continue to ease, though maybe less aggressively. But that's a good thing, because it'll mean the economy has improved..." he said...
Todd Gold, technical strategist at Gruntal & Co however thinks a bounce was overdue:
"People are reading too much into the [market's ability] to shrug off bad news. When you come from such oversold conditions, like the ones we've seen in the Nasdaq, it takes away from that perception..."
He sees short-term resistance for Nasdaq at 2,300..."We could get to 2,350 to 2,370 but those levels are likely to stop the rally in its tracks..."
However Mary Burnes, head of Nasdaq trading for Edward Jones, told cnnfn that it was clearly the tech stocks leading this rally. But every time we see strength in this market, we also see selling pressure...
Peter Cardillo, director of research at Westfalia Investments thinks that the market can continue to rally a little more... "People feel there are bargains out there," he said...
It looks like the oversold tech stocks are now getting some respect... and it remains to be seen whether this proves to be just another tradeable bounce or turns into a sustained upward trend...
Over all the market sentiment certainly does look much better than in February, but it's still too early to believe that the Nasdaq has secured a sustained long-term uptrend... as I said in earlier Nasdaq threads we'll have more bounces both up and down until we reach that stage which doesn't look so far away but not just now...it's still early to hold tech stocks for long term I'd say...try and make the most of the bounces in the short term but don't get too engaged...
Riz
[Edited by Riz on 06-03-2001 at 11:21 PM]