Last week, investors bucked their recent trend of largely snubbing
disappointing news and migrating toward anything positive, for a more demure
approach. Andrew Baker, senior vice president of equities trading at Wedbush
Morgan, commented in a Wall Street Journal piece that tech issues tend to be
volatile as they are used "more as trading vehicles" by investors who want to
gain market exposure. That could help explain the tech-heavy Nasdaq's 30%
sprint since March 11. However, last week, encouraging economic news received
the cold shoulder as better-than-expected consumer prices and leading
indicators and a dip in unemployment claims were largely ignored. Instead,
investors decided to focus on the Philly Fed Index figure that arrived below
what economists had wanted. Todd Leone, head of listed trading at SG Cowen,
remarked to the Wall Street Journal, "People were expecting the numbers to be
good and that's what happened...the market has had a great run." Even chip
titan Micron Technology was unable to hold onto its gains after it reported a
narrower-than-expected loss and noted that industry prices had strengthened
the first few weeks of June. Hugh Johnson, chief investment officer at First
Albany Corp., told Reuters News, "Investors are very worried about valuation.
They are becoming more worried that we've come too far, too fast, and won't
get strong enough growth in the economy and earnings in the second half of
this year to support stocks at current levels." As the earnings season draws
closer, and the Fed delivers its take on the economy this week, perhaps
investors will forgive the Nasdaq for carelessly charging ahead and
maintaining its gains in the face of adversity. Pacific Growth Equities'
Stephen Massocca aptly summed up the market when he said in a Reuters piece,
"It's a wait-and-see environment."
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
back to top
