A Wink Is as Good as a Nod ...

Looks as if the street-fighting men (and women) will have to do a bit more digging now that the Securities and Exchange Commission has put an end to selective disclosure -- in theory. What can a "poor" boy do? What's the edge for the sell-side analysts who are so dependent upon little snippets of info gleaned while supping with the CEO at the finest restaurants? And no guidance other than what's been made public? Who's going to help tweak the model? Heck, the little people will now be able to see the war room's "big board." (Remember George C. Scott in Dr. Strangelove?) Perhaps reading lips or understanding body language will now become the most desirous qualities to research heads when looking for the next hot analyst. Nah, helping to bring deals and selling them has become the top priority on the sell side. How to spin a yarn and do the old soft-shoe shuffle without missing a beat remains job one on the sell side. (Before I tick off many good folks, I know that's a blatantly stereotypical POV. There are a large number of analysts -- young and old -- that know their stuff and don't simply parrot the party line. Their value will only increase and more transparency will ultimately help build confidence in the market.)

As I noted in Thursday's midday comments, "When the response to good news isn't good, it's time to do some heavy thinking about how wise it is to be an aggressive investor." It was Applied Materials' (AMAT: - news - boards) time at bat to help rally the troops, and it failed even though earnings, revs, bookings and the company's guidance were all positive. The Philadelphia Stock Exchange Semiconductor Index, or SOX fell 2.2%, with the equipment giant losing 4%. Cisco (CSCO:Nasdaq - news - boards) fell 6.5%, moving well below where it traded before its lauded pro forma earnings were reported. And Dell (DELL:Nasdaq - news - boards) didn't provide anything to cheer about after the close , as it was a penny above consensus but a penny shy of the "whisper number," and revs even missed the low end of expectations. How much of the earnings were from investments? I don't know. I couldn't find it Thursday night, and will search to see if they ever broke it out. Strange days, indeed. Seems as if more and more companies are insisting that portfolio income should be recognized as operating income.

SF Fed Prez Robert Parry did his part for the bulls, and his optimism failed to bring any cheer to the Street of Dreams. He stated that the economy should grow at a 4% or more rate through the end of next year, with 5% feasible. Mr. G was on stage after the close, but said little more than small businesses are good for the economy. The one piece of "bad" news was that import prices ex-energy rose 0.3% to its fastest pace in four years.

Few took heed of another spike in crude prices, least of all the bondsters, after a very strong and small 30-year auction. The yield on the10-year note dipped to 5.75% with the 2s going out at 6.13%. There was no hesitance ahead of this morning's producer price index report, and commentary from the retailers indicate that today's retail sales data should be relatively benign. In any case, there's almost no chance of a rate increase on Aug. 22.

Once again, tech stocks led the market lower. The Nasdaq Composite and S&P 500 made their highs in the first 30 minutes of trading and then slipped throughout the day to end down 94 (2.4%) and 13 points (0.9%), respectively. The Dow was in positive territory most of the day but closed with only a 3-point gain. GE (GE:NYSE - news - boards) made a new high and Philip Morris (MO:NYSE - news - boards) reached its best level since October. Home Depot (HD:NYSE - news - boards) and Wal-Mart (WMT:NYSE - news - boards) were the biggest drags, with retailers still reeling. Gap (GPS:NYSE - news - boards) and Lands' End (LE:NYSE - news - boards) were the latest peddlers to give negative guidance. As has been the case recently, NYSE breadth was slightly negative and the Nasdaq had three losers for every two winners. The Volatility Index, or VIX, only inched up to 21.57 and the Chicago Board Options Exchange put/call ratio moved up to .62.

Saber rattling by Iraq and continued concerns about low inventories helped to push September crude higher by $.99 barrel to $31.34. However, energy stocks were mixed. I continue to believe that the energy sector continues to offer very attractive long and short-term potential. The big losers were biotechs and retailers, as the American Stock Exchange Biotechnology Index, or BTK, lost 3.2% and the S&P Retail Index, or RLX, fell 3.4%. While I still see some good opportunities in the retail group, the number of them has been significantly reduced by the recent technical damage. The big announcement that Amazon.com (AMZN:Nasdaq - news - boards) and Toys R Us (TOY:NYSE - news - boards) will join forces online failed to boost their stocks, as it was viewed as the weak joining the weak. Financials also sat out the day, although Donaldson, Lufkin & Jenrette (DLJ:NYSE - news - boards) was higher in the afternoon on vague takeover rumors. Drugs rebounded from Wednesday's hit, although Eli Lilly (LLY:NYSE - news - boards) gave back its early gain after a gaggle of analysts' sung its praises in the morning.

The IPO market continues to hum along, although the days of automatic doubles and triples are long gone. I noticed that eFax.com was delisted from the Nasdaq, and K-tel International (KTEL:Nasdaq - news - boards) (wonder of wonders) will follow it out the door on Monday. Who's next?

The technical damage is mounting, and there's been no sign of any motivated selling, even as insiders remain big sellers. The Comp has been acting very poorly, as sellers appear anytime it attempts to rally. And the S&P 500 took out both its 20- and 50-day moving averages Thursday (as did Cisco). When good and bad news get the same reception and charts can't get through resistance it's more than a wink and a nod, it's a sign of distribution. I'd continue to use any strength to lighten up, get more defensive or employ hedges. Aggressive traders should look for shorts on any rally generated by the PPI report ; it's likely to be short-lived and shallow.

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Bill Meehan is the Chief Market Analyst for Cantor Fitzgerald, a Manhattan-based institutional trading and research firm, and writes daily for the Cantor Morning News. Prior to that, he was a market analyst for Prudential Securities. At time of publication, Meehan was long Land's End, Philip Morris, Toys R Us and Wal-Mart, although holdings can change at any time. He appreciates your feedback at [e-mail] Morning News, Copyright, 2000 is a product of Cantor Fitzgerald & Co.("Cantor Fitzgerald"). The material is based upon information that Cantor Fitzgerald considers reliable, but Cantor Fitzgerald does not represent that it is accurate or complete, and it should not be relied upon as such. Cantor Fitzgerald and its affiliates, officers, directors, partners, and employees may, from time to time, have long or short positions in, buy or sell and deal as principal in the securities, or derivatives thereof, of companies mentioned herein and may take positions inconsistent with the views expressed. None of the information contained herein constitutes, or is intended to constitute a recommendation by Cantor Fitzgerald of any particular security or trading strategy or a determination by Cantor Fitzgerald that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. You should consult with and rely upon your own advisors whether and how to use such information in making any investment decision.