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Giving back some gains

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Stocks are giving back some gains, but holding up after a four- day rally that had the Dow Industrials (INDU) 8,115 -1.71% surging from its 52-week lows set last Thursday at 7,198.

As expected, it is "big tech" under some selling pressure today depicted by the NASDAQ-100 Index (NDX.X) 918 -3.4%. The Semiconductor Index (SOX.X) 249 -7.5% leads technology declines with Intel (NASDAQ:INTC) $13.84 -16.28% leading the charge while semi-equipment giant Applied Materials (NASDAQ:AMAT) $12.08 -7.43% trades lower, but holds just above it shorter-term 21-day SMA of $11.71.

While lower than expected earnings from Intel (INTC) has the stock lower, it is shares of biotech Millennium Pharmaceuticals (NASDAQ:MLNM) $8.15 -18.50 leading the NASDAQ-100 declines as MLNM trades a new 52-week low after missing the Street's earnings estimates last night when it reported a Q3 loss of $-0.31 per share, which was $0.04 worse than consensus estimates.

On the plus side, its also biotech leading the NASDAQ-100 gainers with ImClone Systems (NASDAQ:IMCL) $8.10 +5.19%, Genzyme (NASDAQ:GENZ) $25.75 +3.95%, Andrx Group (NASDAQ:ADRX) $13.90 +3.26% and Human Genome Sciences (NASDAQ:HGSI) $13.74 +1.26 holding the top four spots in the NASDAQ-100 gainers. Biotech bellwether Amgen (NASDAQ:AMGN) $50.74 +0.51% also shows a gain after breaking above its longer-term 200-day SMA yesterday.

Higher risk credit lenders are under extreme selling pressure today after Capital One (NYSE:COF) $27.61 -20% reported earnings last nigh that beat the Street's estimates and reaffirmed guidance. However, Wachovia downgraded the stock to "sell" from "hold" due to what the firm believes is significant deterioration in COF's fundamentals, saying it is difficult to discern the core earnings power of the company. In addition, Wachovia says that management sounded confused on their conference call and failed to provide a credible explanation for why loan growth is going so slow.

In sympathy with COF's price action, shares of Providian Financial (NYSE:PVN) $3.76 -16.4% came under selling pressure.

Gold stocks as depicted by the Gold/Silver Index (XAU.X) 62.39 +2% show gains after a recent two-week pummeling in what may be characterized as some short-covering. The sector is trying to form some support at the 60 level, with resistance looking firm at converging 21, 50 and 200-day SMA's near 67.

Despite some broader negativity toward stocks today, Treasuries are seeing modest selling across the 5, 10 and 30-year Maturities. The benchmark 10-year Treasury trades down -0.36% at 113'02 with YIELD edging higher at 4.016%. This bodes well for equities as long as it continues to hold and hints of further unwinding taking place in the bond markets and may have some cash looking for bullish entry on pullbacks to support.

Jeff Bailey

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