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CLOSING WRAP-UP, July 7
By Jody Osborne, Optionetics.com
7/7/2004 5:00:00 PM

http://www.optionetics.com/articles/article_full.asp?idNo=10683

Stocks end with mild gains on a rather uneventful trading session. The Dow ($INDU) was able to rise 20.95 points Wednesday to 10,240.29. The S&P 500 ($SPX) added 0.19 percent to 1,119.33. The Nasdaq ($COMPQ) saw a gain of 2.65 points, or 0.13 percent, to 1,966.08. Volume was moderate, with the NYSE trading 1.32 billion shares and the Naz turning over 1.76 billion shares. Market breadth was positive on the Big Board by a 20-to-12 margin, but negative on the Naz by a 14-to-16 margin.

The major market indices saw little movement Thursday, trading in a rather tight range. The bulls were unable to rally stocks following a sharp decline on Tuesday. The market got further earnings warnings this morning from the likes of PeopleSoft (PSFT) and JDA Software (JDAS). However, PSFT shares gained 1.84 percent on the session following an initial drop. JDAS shares also recovered from its low of the day, but still fell 7 percent. After declining more than 5 percent on Tuesday, the CBOE GSTI Software Index ($GSO) lost just 0.20 percent on Wednesday.

Shares of Yahoo (YHOO) gave up nearly two percent Wednesday ahead of the company’s earnings announcement after the bell. The company met earnings estimates, but this wasn’t good enough and the stock is taking a beating in after hours trading, down more than 10 percent. This could put more downside pressure on the tech sector come Thursday, with the Nasdaq 100 Trust (QQQ) off 30-cents after hours. Another stock warning after the bell today was Siebel (SEBL) and this will also produce some selling on Thursday as well.

The fear indices have come off their lows achieved a few weeks ago and tomorrow’s open could see another rise for these indices. The CBOE Market Volatility Index ($VIX) did fall on Wednesday after hitting resistance at its 200-day moving average on Tuesday. The Nasdaq Volatility Index ($VXN) continued to move higher today and is about 10 percent from its resistance. It will be interesting to see if this level is reached Thursday and if resistance holds.

Economic news has taken a back seat to earnings data, but this doesn’t mean there isn’t economic data to digest. On Wednesday, consumer sentiment, chain store sales and mortgage applications all improved. Thursday will see data for chain store sales for the month of June, as well as consumer credit and jobless claims data. However, unless these reports stray far from expectations, they shouldn’t impact trading.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site