Awaiting Alan, Shares Stall

That outperformance, along with signs last week that institutions were among the buyers, has Kevin Marder, chief strategist at Ladenburg Thalmann, excited about the sector and the market.

"A two-month stretch of lagging action has now segued into the current three-week outperformance mode," he wrote on Monday. Also citing relative strength in brokerage stocks and some growth issues, Marder said "the weight of the evidence is positive, we are bullish, and we expect shares to garner richer quotations as the year progresses."

Semis strength is also a good tell according to Paul Nolte, director of investments at Hinsdale Associates outside Chicago. But he sees the semis bumping up against a technical resistance level. The 200- and 50-week moving averages are roughly at the current level of the index. He's waiting for a break above the December 2004 peak of 455.

"The semi sector is one of the drivers of the entire computer/technology sector and has the capability to lead the overall market higher," Nolte wrote on Monday. "A turn lower [however] and the group could drag the overall market lower."

All About Autos

There was little of note on the economic data front on Monday but that will change on Tuesday and perhaps provide some fodder for Greenspan. Bonds, which made some big swings last week, were quiet on Monday, and the yield on the 10-year Treasury note ended at 4.08%, almost unchanged.

Tuesday's macroeconomic reports include business inventories for December, the National Association of Homebuilders market index for February, the New York Fed's manufacturing survey and January's retail sales report from the Commerce Department.

Both the retail sales and inventories numbers could be skewed by the up and down fortunes of the auto industry, according to Morgan Stanley analysts Ted Wieseman and David Greenlaw in their weekly preview.

After strong December sales, thanks to a lot of incentives handed out by carmakers, January was slow. As a result, inventories might have actually declined overall in December, though just slightly, as cars flew off lots faster than they were replaced, the analysts wrote. For January, retail sales overall may show a decline, but excluding autos should reveal a healthier gain.

Neither report will be a barn-burner, but neither will they be the negative that they first appear, so there may be a misfire when the headline numbers hit Tuesday morning. Ignore that and it'll all be up to Mr. Greenspan on Wednesday for bonds and interest-rate-sensitive industries.

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