EARLY WINNERS AND LOSERS
GENERAL DYNAMICS HURTS DEFENSE STOCKS... This morning's high-volume plunge in General Dynamics is taking a toll on defense stocks. That explains today's relative weakness in the likes of Boeing and Northrop Grumman, which have both fallen beneath their 50-day averages.
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EASTMAN KOKAK DOW'S BIGGEST LOSER... EK has tumbled beneath its 50-day line on very heavy volume. The stock has also broken intial chart support at its late-December low. The next test will be its 200-day line. Unfortunately, today's breakdown also calls into question the recent bullish breakout -- which is shown in the weekly chart. The stock recently exceeded its May peak to achieve a 52-week high. A weekly close beneath that level would call into question the validity of that bullish breakout.
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MELLON LEADS FINANCIALS LOWER... Financial stocks have been weakening of late -- mainly in the bank and brokerage areas. Mellon Financial has fallen to a three-month low -- on very heavy volume. Last night, we showed the Bank and Broker Indexes turning down. The Financials Select Sector SPDR shows an equally dangerous chart. After recently failing a test of the (red) 200-day average, the XLF is slipping under its (blue) 50-day average. That's not a good sign for the financials -- or the market.
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TECHNOLOY WINNERS... The technology sector is holding up better than the rest of the market today. The top gainers there are Lucent, Siebel, Quest, JDSU, and People Soft. Three of those early winners are shown below. Other pockets of relative stability are consumer staples and healthcare.
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OIL STOCKS ARE FALLING... Oil stocks are among the day's biggest losers. The AMEX Oil Index has fallen to a two-month low. That may be a reaction to today's weakness in oil prices (and hints of some progress in the Venezuelan strike). Utility stocks are also weak today -- and are being negatively effected by weakness in natural gas stocks.
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