Unable to hold yesterday's gains at the open, its been an early route for bears to the downside with the CBOE Semiconductor Index (SOX.X) 284 -4.6% and S&P Insurance Index (IUX.X) 250 -4.16% pacing declines.
The Gold/Silver Index (XAU.X) 81.66 +1.65% is today's only sector I show with a gain as February Gold futures (gc03g) $366.55 +0.49% look to challenge yesterday's 52-week contract high of 367.70, as the U.S. Dollar weakens to a 52-week low against major foreign currencies.
The Dow Industrials (INDU) 8,202 -1.99% have given up yesterday's lows and posts a 167-point decline, with all 30-components trading in the red. Yesterday's Dow Bullish % ($BPINDU) reversal into "bear confirmed" status was a negative, and while I thought there might be an outside chance that yesterday's lows might hold should Microsoft (NASDAQ:MSFT) $50.99 -2.45% get a bounce from 3- day consolidation, weakness in MSFT from the opening bell just below its daily pivot of $52.10 looked to squash any hopes of a rally in the early going.
Technology stocks are not showing there recent relative strength as the tech-heavy NASDAQ-100 Index (NDX.X) 1,003 -2.81% leads the major index declines with sector weakness in semiconductors. Yesterday, after the close of trading, KLA-Tencor (NASDAQ:KLAC) $34.60 -4.91%, which has been a previously bearish profiled stock in the market monitor, reported earnings that beat estimates by a penny, but said that while it still sees little up tick in capital spending for semiconductor equipment, it does expect a 10% increase in spending for 2003. Prudential downgraded the stock this morning on concerns regarding steep declines in DDR DRAM pricing and KLAC's flat March quarter guidance. Conversely, Fulcrum upgraded the stock to "buy" from "neutral," saying that despite disappointing orders and shipments guidance for KLAC's March quarter, it believes that the forecasted "bad news" should be in the stock and that the stock should not have more than 5- 10% downside risk.
The insurance sector is taking a hit this morning after Morgan Stanley lowered their Property & Casualty Insurance industry view to "in line" from "attractive," saying they believe margins and book value growth should remain healthy for some time, but now sees investing in the group as more of a stock-picking exercise given regulatory trends in personal lines, a continued weak economy, and the fact that commercial lines pricing appears to have peaked. Upgrades of RE, TAP.A, PGR were simply based on "valuations", while downgrades ALL, AIG, MMC, MXRE, XL, MBI, PRE were based on "risk" to higher valuations.
As equities see a rather robust round of selling, the perceived safety of Treasuries finds the major maturities all trading higher. The March 10-year Treasury futures (ty03h) $114'260 +0.39% looks to challenge its contract high of $115'175 found on December 31st, as the benchmark bond's YIELD ($TNX.X) falls to 3.885% and well below my previous level of 4% that I felt equity bulls would want to see.
Today's inability for stocks to show any type of "fight" and S&P 100 Index (OEX.X) 438.92 -2.61% breaking of major support at 440, should now have OEX resistance firm near 450 and formidable at 460.