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Stocks are mostly subdued ahead of the Fed meeting, with the Dow up 33, and the Nasdaq up 4. One sector that is moving this morning is the Biotechnology Index, up 2.90%.

Helping biotechs is Immunex (IMNX), which reported that mid-stage trials of its arthritis drug Enbrel are effective at treating psoriasis. The news has the stock up $1, which for today is a stellar move. Genzyme, Biomet, and Biogen are also performing well.

But in a reversal of yesterday's action, semiconductors are one of today's worst performing sectors. A warning from Merrill Lynch that TriQuint Semiconductor could lower revenue and earnings guidance in their conference call tonight has traders avoiding semiconductor stocks. TriqQuint (TQNT) is down $1.87, and Nvidia (NVDSA), Photon Dynamics (PHTN) and Maxim Integerated (MXIM) are all down over $1.

The Software Index is only up 0.53%, but select names like Veritas, Adobe, and Microsoft are topping the Nasdaq-100 gainers list. VeriSign (VRSN) is up 1.52% this morning after Thomas Weisel Partners stated that yesterday's weakness is a buying opportunity.

Amazon (AMZN) is up 26 cents, or 2.50%, after receiving an upgrade from Prudential Securities. Prudential upgraded the stock to a hold since the recent deal with Circuit City (CC) should help Amazon's consumer electronics business. eBay is up 15 cents, but remains above support at $59.

The Retail Index (RLX.X) is down 0.98% after a mixed bag of earnings reports. American Eagle Outfitters (AEOS) is down $6.17, or 19%, after meeting earnings for the current quarter, but warning of flat sales and lower earnings going forward. Staples (SPLS) and Target (TGT) also reported earning in line with expectations, and Talbots (TLB) beat by a penny.

BJ's Wholesale Club Daily Chart

BJ's Wholesale Club (BJ) reported earnings of $36.5 million and an increase in same store sales of 3.5%. The numbers met Wall Streets forecast, but the stock is down $2.12. From a technical standpoint, the stock looked in trouble back in early June when the directional movement indicator began to fall, which signaled that BJ's trend was coming to an end. Then in July some bearish divergence appeared between the momentum oscillator and price. Now the stock is below the 50-day moving average, and looking to test support at $61. Discounters and wholesale clubs have been some of the better performing retail stocks, but if BJ's loses the 9-month up trend, it's in trouble.

Jeffrey Canavan
Assistant Analyst

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