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Fractional gains with gold hit lower

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The major market averages hold fractional gains this morning with broader sector action positive as the Dow Industrials (INDU) 9,010 +0.34% trade either side of the 9,000 level and hold a 30- point gains, while the broader S&P 500 Index (SPX.X) 978 +0.21% gains 2-points.

The Gold/Silver Index (XAU.X) 74.41 -3% is hit lower and leads this morning's sector loser list with the June Gold futures contract (gc03m) falling $6.80 (-1.87%) to 355.0 and falling below its rising 21-day SMA of 362.

Technology stocks have seen a mixed morning trade with weakness in the Biotechnology Index (BTK.X) 455.65 -1.10%, Disk Drive Index (DDX.X) 101.63 -1.06% and Semiconductor Index (SOX.X) 374 -1.16% leading sector weakness. The tech-heavy NASDAQ-100 Index (NDX.X) 1,201 +0.47% holds a 5-point gain.

Weakness in the semiconductor looks to be coming from a downgrade on the semiconductor equipment space as both Adams Harkness and Banc of America downgraded equipment stocks as valuations appear stretched. There have also been reports that an earthquake measuring 6.5 on the Richter scale has hit Taiwan near Hsinchu, which is where many semiconductor fabrication plants are located. The shocks were felt as far away as the country's capital of Taipei. Shares of Taiwan Semiconductor (NYSE:TSM) $10.17 -0.68% are just off their morning low of $10.10.

Shares of K-Mart (NASDAQ:KMRT) $19.90 begin their first day of trading after IPO of $17.50. The stock jumped to as high as $21.42 in early morning trade.

Oxford Health (NYSE:OHP) $38.60 +0.8% sees a steady trade this morning as the company's CFO reiterated fiscal 2003 views for earnings per share between the range of $4.17-$4.27.

The Dow Jones Home Construction Index (DJUSHB) 440.66 +2.39% is this morning's early sector winner after Lehman Brothers raised its targets for several homebuilders. For Centex (NYSE:CTX) $79.02, Lehman raised it target to $92 from $75, DR Horton (NYSE:DHI) $28.96 +3.68% to $36 from $29, KB Home (NYSE:KBH) $61.65 +2.01% to $74 from $60, Lennar Corp. (NYSE:LEN) $69.70 +3.62% to $80 from $65, Pulte Home (NYSE:PHM) $65.74 +1.84% to $83 from $73 and Toll Brothers (NYSE:TOL) $29.57 +1.61% to $35 from $31. Lehman said they were raising price targets on increased EPS outlook and higher market multiples.

Jeff Bailey

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