Market Summary - April 12, 2001
Posted Daily Between 5 and 6:30 PM EST

by Lance Lewis

http://www.prudentbear.com/bearthoughts.htm

When The Cat’s Away, The Mice Play

Asia was higher last night as the Nikkei rose a percent and Hong Kong rose 2 percent. Europe was off a touch this morning as approached the pre-holiday session in the US. The futures were up early on but then sank on rumors swirling around MSFT. We gapped down at the open and immediately rallied in to positive territory before selling off again back to the lows and then reversing sharply back into the green. From there we were whistling Dixie right into the close where we ended on the highs. Volume was pretty good for the day before a 3-day weekend (1.1 bil on the NYSE and 1.9 bil on the Naz.) Breadth was just shy of 2 to 1 positive in both bingo parlors. Big winners were in the golds as the GOX rose 7 percent. Big losers were in the retailers as the RLX fell a percent.

Semi equipment makers LRCX and AEIS were both out before the open and both guided lower. LRCX’s CEO James Bagley did say that although they still had no visibility, "It's hard for [him] to believe that we are not at or near the bottom." So, like SSB’s analyst yesterday, he’s hopeful just like many of the semi equipment shareholders, but hope does not a bottom make. If INTC finally admits to cutting their cap ex number next week, equipment makers could be dealt a big psychological blow, and since psychology (ie - we hope it won’t get worse) is the only thing holding them up, things could get ugly. But we’ll have to see if INTC is ready to fess up yet or not. Additionally last night, NTAP warned, YHOO reported and guided lower, and JNPR reported and guided lower this morning. None of that mattered though because with many people away early for the holiday, the kids were going to try and play, and play they did. The SOX rallied back to yesterday’s highs on the back of MU saying at an investor milk and cookies party that they felt that DRAM prices were firming, which they’re not, but people always love to believe a good DRAM yarn. IBM has strangely been left out of the party over the last few days and was down a percent today. It reports next Wed, and we’ll get to see if they’re finally forced to drop a bomb considering every one of their competitors in every area of their business is having huge problems. Otherwise, it was just the general chaos once again with lots of short covering thrown in for a sweetener. Financials were stronger on the day again. The BKX rose a percent, and the XBD rose 4 percent. GE rose 3 percent after its earnings that were on target, but GE failed to beat its number by the usual penny, just as they did last quarter for those keeping track. The Commerce Department told us this morning that retail sales fell .2 percent in March. Retailers were weaker off that with the RLX falling a touch after being much weaker early on. WMT actually warned for Q1, but you wouldn’t know it by looking at the stock, which only fell a percent.

Oil rose 7 cents. The XOI rose a percent, and the OSX fell 2 percent. Gold rose $1.30, and lease rates moved turned slightly higher. The HUI rose 6 percent thanks to a late day run and ended on the high of the day. The US dollar index edged a little lower. The euro rallied back above 89 cents once again. Treasuries were lower once again with the yield on the 10yr rising to 5.17%.

Next week is a big week for earnings where we’ll hear from INTC, MSFT, and IBM just to name a few of the bigger ones. How the market handles the negative guidance and perhaps an earnings miss or two will be the key. The bulls have done a good job of buying all the bad news so far this week, but it remains to be seen whether they have enough firepower to hope their way out of the negative guidance from the big boys next week. We’ll soon find out. In the meantime, everybody have a great holiday weekend.

(you can email me below, and I enjoy hearing from both bulls and bears)

bear--mail@wtez.net

Fair use for educational/research purposes only!

-- Anonymous, April 12, 2001