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Quiet session with bond market closed

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It's been a quiet session for stocks with bond traders taking the day off in observance of Columbus day. It has been a modestly positive session for equity bulls as we not only seen the major indexes hold last week's rebound gains, but edge just above Friday's best levels.

At it's best levels of the session, the Dow Industrials (INDU) 7,884 +0.43% reached the 7,915 level and bought in further buying from investors as key technical and psychological resistance at 8,000 lays just ahead. A slight technical positive today as the Dow holds above its 21-day SMA, something the Dow hasn't been able to do since falling below this short-term moving average back on August 29th.

Dow breadth is marginally positive with 17 components showing gains, with 13 components lower. Dow gainers have drug maker Merck (NYSE:MRK) 49.82 +5.32% battling the psychological $50.00 level, while building products retailer Home Depot (NYSE:HD) $27.22 +3.85% recovers from a 52-week low for the second consecutive sessions.

Strength in Merck (MRK) and Home Depot (HD) is being offset by weakness in General Motors (NYSE:GM) $33.82 -2.87% after this morning's negative comments from Merrill Lynch. Shares of Ford Motor (NYSE:F) $7.94 -4.56%, which were discussed in Merrill's auto downgrades feels the bulk of the big 3's downside, while Daimler Chrysler (NYSE:DCX) $33.39 -1.25% trade lower on concerns that the Canadian auto union says there is a 95% chance of a strike among its Canadian union members.

The NASDAQ-100 Index (NDX.X) 898.76 +0.9% broke to a 3-week high this morning above the 900.00 level on strength from biotechs as depicted by the Biotechnology Index (BTK.X) 338.47 +4.10%. Shares of Chiron (NASDAQ:CHIR) $40.67 found a session high of $41.00 after it raised current Q3 and 2002 financial expectations. Sector bellwether Amgen (NASDAQ:AMGN) $49.01 +1.99% challenges its still trending lower 200-day SMA at $49.72, but managed to trade at multi-month highs.

After a weak open for semiconductor stocks, the Semiconductor Index (SOX.X) 244.57 -0.67 has recouped about two-thirds of its morning losses with sector bellwether's Intel (NASDAQ:INTC) $14.89 -2.16% still trading soft, but rebounding from an early morning low of $14.60 and Applied Materials (NASDAQ:AMAT) $11.97 -0.79% just off its session low of $11.76. Both stocks attempt to hold a beginning to round out 21-day SMA and show some short- term stability that will be monitored in the coming sessions.

After a negative article in the Wall Street Journal this morning, regarding Citigroup's (NYSE:C) $30.44 +0.09% Traveler Group loaning $679 million to a privately held company controlled by former WorldCom CEO Bernard Ebbers, Citigroup says that the Wall Street Journal's allegations are incorrect. Citigroup says "allegations that there were some impropriety in Traveler's loans to Joshua Timberland are just plain wrong and that the loans, done as a participant with 3 other major insurance companies, total about $499 million, rather than $679 million as misreported, and were and are fully secured by timber properties and contracts, not WorldCom stock."

Volume on both the NYSE and NASDAQ are quite light today with the bond market giving little direction as both exchanges shows just over 700 million shares traded. With light volume and rather marginal gains, many market predictors say today's action is not all that foretelling after the recent rebound late last week.

Breadth runs at a dead heat at both the NYSE and NASDAQ. The NYSE shows 13 stocks hitting new 52-week highs versus 77 stocks at new lows, while NASDAQ shows some improvement in this category from recent weeks with 13 stocks at new highs versus 110 stock hitting new 52-week lows.

Jeff Bailey

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