Last week's trading was cautious, ahead of some important economic data
that did not surface until the week's end and offered a mixed bag to
investors. "It's really just got all the markings of a range-bound market,"
said Dan McMahon, head of listed trading at CIBC World Markets Inc., to
Reuters News. "While earnings have been good -- there've clearly been more
upside surprises than there have been disappointments -- they have not been
stellar enough to provide an upside catalyst." Seeing as corporations seem
unwilling, for the most part, to forecast a healthier second half, market
watchers were keen to derive comfort from economic indicators. A
better-than-expected GDP report for the second quarter, a jump in the Chicago
PMI and a second week wherein initial jobless claims remained below the
400,000 mark delivered a certain level of reassurance to investors.
Commenting to Reuters News, John Vail, senior strategist at Mizuho Securities
USA, said, "The GDP numbers are very good for the stock market ... The data
showed that reasonably robust economic growth had already appeared in the
second quarter, and the second half looks equally as good." As tech stocks
remained weak ahead of the data, chip stocks were quick to rebound on the
promising news, spurred by a positive brokerage report. Merrill Lynch became
more bullish on the industry stating, "We think the underpinning now exists
for a much more sustained, fundamentally based upward move in semiconductor
stock prices." Still, the celebration was short-lived, as a dour employment
report crashed the party. Employers cut jobs for the sixth consecutive month
in July. Joseph Battipaglia, chief investment officer for Ryan, Beck & Co.,
said in a Reuters News piece, "Does it determine that recession is upon us
again? No. But it certainly doesn't support an up, up and away (scenario)
that everyone was hoping for."
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
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