Technology stocks were the major movers as investors took to bargain hunting. Buyers stepped up and purchased bellwether tech names such as Intel, Microsoft, IBM, Sun Microsystems and Oracle. Here at home the stocks of choice were Research in Motion, JDS Uniphase and Nortel Networks.
The tech gains came at the expense of some blue-chips. We saw a rotation out of some of the defensive pharmaceutical and consumer staples names. Some stocks such as Merck, Pfizer, Eli Lilly, Coca-Cola and Procter & Gamble which have had good runs experienced some profit-taking.
Telecom giant AT& T provided further signs of weakness among the telecommunications companies. The company announced it's suspending equipment purchases used to upgrade cable-television systems for phone service through December to reduce inventory levels.
Previously, bad news coming from the telecoms suggesting there would be purchase slowdowns stung equipment manufacturers such as Nortel and Cisco Systems. But in Friday's trading these names posted solid gains. This could be significant, suggesting that the stocks have discounted all known and potential bad news and that the sellers are out. We'll find out if this scenario pans out.
In Toronto we had a broad-based rally with several sectors carrying through on Thursday's positive momentum. For a second day banks, oil and gas stocks ended in the green. National Bank of Canada and Bank of Montreal are scheduled to post their latest quarterly earnings next week.
Both the TSE 300 and Nasdaq Composite appear to be oversold and could enjoy an oversold bounce. At this stage it's too early to state emphatically that we have found a bottom. More time will be needed to affirm that. The Dow, on the other hand, seems to be in a better position to advance. But once again, only time will eventually give us a better handle of things.
Dhaliwal is President and chief marketstrategist of Kirn Dhaliwal Associates.
Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. At time of publication, neither Dhaliwal nor Kirn Dhaliwal Associates held positions in any securities mentioned in this column, although holdings can change at any time. While Dhaliwal cannot provide investment advice or recommendations, he invites your feedback.
