Börsipäev 2. august

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  • Gapping Up

    COX +21% (WSJ reports Cox Family set to take co private), RIGL +39% (positive clinical trial results), NTMD +18% (started with a Buy at Deutsche; tgt $38), CMCSA +4% (in sympathy with COX), PETD +5% (posts upside earnings surprise), SPLN +6% (to be acquired by Viacom), HBC +3.4% (posts upside earnings surprise), NT +2% (Smith Barney upgrade).... Security stocks are moving on increased terror threat: MAGS +6% (co also reports Q2, positive guidance), MACE +10%, IPIX +6%, TBUS +8%, IDNX +8%, VISG +3%.

    Gapping Down
    Education stocks getting hit on COCO guidance: COCO -37% (lowers guidance; JP Morgan downgrade), CECO -14%, ESI -15%, APOL -11%, UOPX -8.6%.... Other news: INVN -12.6% (co says it may face a government investigation), GLBCE -10.9% (asks Nasdaq to delay delisting decision), NTGR -7.3% (announces organizational realignment; President resigns), BOBJ -5.5% (Goldman placement of 5.75 mln shares at Eur16.90 cited), TASR -3.8%, KMRT -3.4% (negative WSJ article), NOK -2.6%.
  • Rev Shark:

    "Hence, that general is skillful in attack whose opponent does not know what to defend; and he is skillful in defense whose opponent does not know what to attack."

    -- Sun Tzu

    An announcement by Tom Ridge over the weekend that al Qaeda is targeting high-visibility and/or iconic financial institutions including the New York Stock Exchange is pressing the market this morning. Although overseas markets were down and futures are indicated lower, the degree of the pullback is somewhat contained.

    The market has been dealing with the specter of terrorism for almost three years now and to a great degree we have become fairly dismissive of it. After all, if they haven't done something by now, why should we expect them to ever be able to do something? The fact that we have been able to identify specific targets and means of attack actually weakens the threat that exists. Attacking financial institutions with car bombs is a very unpleasant possibility but it lacks any real creativity or surprise.

    Despite these new warnings, nothing has really changed. No one should be at all surprised that al Qaeda continues to plot attacks. The fact that we actually have some specifics should be cause for some comfort, not increased concern, but we are dealing with the stock market here and that means we have to explore a pathology that is often emotional rather than logical.

    Our job this morning is to consider the impact of the terrorism warnings within the context of the current market environment. The impact of news varies greatly depending on the prevailing market conditions. In a market that is extended, news events can serve as a trigger for aggressive profit-taking, while in a market that has been struggling, the same news may be shrugged off as already being fully discounted.

    Although we just had a positive week for the indices, it is the first one in quite a while and the technical picture of the market remains precarious. The bulls have been arguing that the market has become too gloomy and negative and that a bounce of some consequence is near.

    My position, which I have been repeating constantly, is that it is safer to not anticipate a bottom but wait for some clear technical signs that a trend change is in place. Given that we really have seen nothing more than a light-volume bounce following a steep decline, there is no reason to expect that the sellers and shorts won't take advantage of strength to dump positions. In other words, the trend remains down and we have to respect that until there is a clear sign that buyers are ready to become more active.

    I'm not looking for the increased-terrorism report to have a lasting impact on the market, but there is nothing to support aggressive bullishness at this point anyway. In fact, the number of folks who were looking for a bounce set's up conditions that help support a greater pullback.

    The terrorism news does offer a good test of how washed out this market already is. Investors have become somewhat indifferent to terrorism as it is, and it is going to be interesting to see if they seize on this as an excuse to continue to avoid making any aggressive buys.

    We have a negative open on tap. ISM and Construction Spending numbers are due out at 10:00 a.m. EDT and may cause a ripple, but major earnings reports are out of the way and not much news is on the agenda. Oil is down slightly, the dollar is weak and gold is trading up.

    G. B. Smith:


  • Dow plussis, kui päeva lõpuks peaks kogu turg plussis lõpetama, siis väga positiivne märk - uudised tänaseks olid üsna viletsad.

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