market summary
Close Dow -24.26 at 10289.10, S&P +2.11 at 1118.38, Nasdaq +19.01 at 1869.65: Chances are that if you own stock in the telecom equipment, steel, oil, and semiconductor groups, you would characterize Thursday's trade as being a good day... Otherwise, you may look upon it as being no more than a neutral day since the bulk of the buying interest was concentrated in the aforementioned areas... The factors behind that concentration revolved largely around earnings guidance...
To that end, the telecom equipment group rallied after Nokia (NOK 13.77, +1.06) raised its Q3 outlook; the steel group advanced on the heels of Nucor (NUE 88.43, +6.13) raising its Q3 guidance; the oil stocks surged after crude futures spiked (+$1.84 to $44.61/bbl) following a weekly inventory report from the Dept. of Energy that showed a larger than expected drawdown of oil inventories; and semiconductor stocks soared in the wake of what can be called cautious sounding guidance from the likes of Texas Instruments (TXN 20.77, +1.94) and National Semiconductor (NSM 13.48, +1.48)...
That point notwithstanding, the resilience of the beaten-down semiconductor issues following that guidance precipitated a short-covering rally built on the belief that recent selling attributed to industry slowdown concerns had been overdone... Whatever the case might have been, it was clear, with the SOX Index up 5.4%, that there was great demand for the semiconductor stocks... Their leadership contributed to the Nasdaq's outperformance, which was a constant throughout the session... The broader market, meanwhile, never made much headway as weakness in the transportation, retail, and REIT shares acted as a counterweight to the pockets of leadership noted above...
Some disappointing sales guidance from Chico's FAS (CHS 33.91, -2.85) and Charlotte Russe (CHIC 11.20, -3.43), as well as the spike in oil prices, undercut the retailers as both stoked concerns about the pace of consumer spending... REIT stocks, meanwhile, were on the defensive thanks to Smith Barney Citigroup, which downgraded and/or cut price targets on a host of names on the basis of valuation... As to be expected, the weakness in the transportation stocks was paced by the airlines, which slipped on the move in oil prices and festering concerns about potential bankruptcies among major carriers...
Initial claims for the week ended Sept. 4 fell 44K to 319K (consensus 345K), yet that positive data point was regarded as somewhat aberrant due to the effects of the hurricanes that hit Florida and socked the Atlantic Coast with rain... NYSE Adv/Dec 1976/1306, Nasdaq Adv/Dec 1994/1089
