INTEL SINKS SOX -- HEALTHCARE LEADS NYSE HIGHER -- DOW BOUNCES OFF 200-DAY AVERAGE -- GENZYME BOOOSTS BIOTECHS

INTEL TUMBLES TO 2004 LOW... Intel is tumbling to a new a new for the year and is pulling the Semiconductor (SOX) Index along with it. That also caused a lower opening in all the major stock indexes -- especially the Nasdaq. After a lower open, however, the market is trading higher with most of the gains on the NYSE side of the ledger. Healthcare is the day's strongest sector with help from biotech, drugs, and HMOs. The Dow and the S&P 500 are continuing to find support near their 200-day averages.

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DOW BOUNCES OFF 200-DAY LINE... The Dow Industrials continue to find support at their 200-day moving average. While Intel is the biggest drag on the Dow, upside leadership is coming from McDonalds and Johnson & Johnson. Chart 3 shows MCD breaking out to a new three-month high on rising volume after finding support near its moving average lines. JNJ is trading at the highest level in a month and is benefitting from a strong healthcare sector.

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HEALCHCARE ETF RECOVERS... The Health Care Select Sector SPDR is the day's strongest sector. Its daily chart shows the ETF climbing back over its 200-day average. Its relative strength line, which has been dropping for two months, appears to be bouncing off its April low. Money appears to be flowing back into this neglected defensive sector. Biotech is one of the day's strongest groups and is helping to spearhead the healthcare bounce. Chart 7 shows the Biotech Holders bouncing off their 200-day average. The top stock in the group is Genzyme which is jumping to a new four-month high. Energy and utilities are also strong today. Technology is the weakest group. If the major averages can hold onto their gains, today has the makings of a short-term bottom.

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