No Worries

The good times may not last, but for now, just sit back and enjoy them.
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With this column, we introduce Bill Meehan, the chief market analyst for Cantor Fitzgerald, a Manhattan-based institutional trading and research firm. Meehan is a frequent guest on CNBC, CNN, CNNfn, Fox News Channel and PBS, and his insights and opinions of the U.S. financial markets appear regularly in magazines and newspapers both here and abroad. Meehan works in the Cantor Fitzgerald office in Darien, Conn. As always, tell us what you think.

It was more than just a g'day on the Street of Dreams, as the bulls cut a swath through the bears like Crocodile Dundee on steroids. It was an incredible day, with nary a pullback to provide would-be dipsters an entry point. Yes, I saw that volume left something to be desired, but it's tough to argue that the

Nasdaq Composite's

largest one-day percentage advance ever wasn't impressive.

And even if end-of-month markups, short-covering and programs provided the impetus, I simply can't dismiss the action as just noise. Not with breadth positive by better than 2-1 on both the

New York Stock Exchange

and Nasdaq, with upside volume exceeding downside by almost 4-1 and 9-1, respectively. Heck, two more days like Tuesday and the Nasdaq Composite will be back in the green year to date.

No, I won't quibble about the lack of volume, but as to whether the move indicates something of great importance to investors (as opposed to traders), that's a question that's still up in the air. Considering the market's recent turmoil, the "no worries" atmosphere is a bit troubling in itself. That traders hardly blinked at the much stronger-than-expected consumer confidence reading of 144.4, a near-record high, indicates that the Nasdaq's savaging will do nothing to staunch demand.

Not exactly what the

Fed

wants to see, which can't be viewed as good news for investors. And aggressive call buying ahead of this week's critical economic data isn't the backdrop one would like to see at the beginning of a sustainable move. So, while there may well be a tradable rally, those with a longer-term view should remain cautious until there are clear signs that the economy is cooling and inflationary pressures are abating.

It took only minutes for the Composite and the

Nasdaq 100

to post triple-digit gains, and the

Dow Jones Industrial Average

promptly followed. However, unlike last week's daily reversals, all the major market measures rallied again in the final two hours to end the day on a very strong note. The final tally saw the Dow up 228 (2.2%), the

S&P 500

up 44 (3.2%), the Nasdaq Composite up 254 (7.9%, missing a one-day point record by a fraction) and the

Russell 2000

19 points (4.2%).

Mega-cap techs of all stripes led the charge, as the Nasdaq 100 surged 313 points, or an incredible 10.1%. It was almost a buying panic into the close, with some amazing 15 to 20% moves.

Qualcomm

(QCOM) - Get Report

topped the Nasdaq's most active list with a gain of 15.6%, but it closed more than 27% off its low. While telecom stocks were strong on

France Telecom's

(FTE)

purchase of

Orange

from

Vodafone Airtouch

(VOD) - Get Report

and talk that Lucent

(LU)

would deal for

Chromatis Networks

, Qualcomm was initially punished by comments out of China that CDMA technology wouldn't be employed.

However, the strength in the telecom group couldn't match the nonstop surge in the

Philadelphia Stock Exchange Semiconductor Index

, or SOX, which gained more than 11%. While

Dan Niles'

"initiation" of coverage for

Lehman Brothers

was universally expected, (surely, things hadn't changed that much since he pulled up stakes at

Robertson Stephens

), it was still cited as a reason for the strength. In addition,

Morgan Stanley Dean Witter's Mark Edelstone

was reported to have also boosted his favorite semis, and

Donaldson, Lufkin and Jenrette

noted that DRAM spot prices had surged over the weekend.

Hewlett Packard

(HWP)

,

IBM

(IBM) - Get Report

and

Intel

(INTC) - Get Report

accounted for more than 100 of the Dow's advance. The Internet beauties were also on a rampage as the

TheStreet.com Internet Sector

index, or DOT, rallied 8.5%. In fact, the only groups that didn't participate in the broad-based move were those with very defensive characteristics. Who needs defense when few are worried about the market going down under?

Drug stocks were mostly in the red, as concerns about what Washington may have up its legislative sleeve also weighed on the group. Electric utilities and many consumer nondurables, such as

Coca Cola

(KO) - Get Report

and

Philip Morris

(MO) - Get Report

were also lower. Retailers were mixed, with supermarkets among the big drags.

While the stock jocks all but ignored the consumer confidence report, the bond ghouls took notice and pushed prices down. Of course, as the stock market continued to surge it meant that there would be no rebound in bondland, as the yield on the benchmark 10-year note backed up to 6.37% and the two-year notes went out at 6.71%. Today's new home sales and Chicago will again serve as prelims for tomorrow's

National Association of Purchasing Managers

report and Friday's all-important employment data.

Investors should wait to see how the data, especially unemployment rate and hourly earnings, come in before committing some cash to the market. It's too early to conclude that

the

bottom is in -- but even if it is, investors should still be well rewarded without trying to catch every point. And data that indicate the Fed will remain vigilant beyond the June

Federal Open Market Committee

meeting, or will unleash another 50 basis points, are likely to abort the nascent rebound.

The "no worries" attitude appears premature, and a .43

Chicago Board Options Exchange

put/call ratio and the lack of a spike in the Volatility Index, or VIX recently are also disturbing. However, the early weakness indicated by Globex trading this morning (S&P and NDX futures were well below fair value at 6:30am), should be viewed by traders as an opportunity on the long side.

The strength of yesterday's move left short-term momentum indicators positive, and we could see some follow-through after the Nasdaq 100 and S&P 500 took out their 40-week moving averages. Many of the momentum favorites look to have further to go, and the semiconductors should offer reasonable opportunities for aggressive traders after a bout of early profit taking.

Less aggressive traders may want to wait for Judge Jackson's ruling against

Microsoft

(MSFT) - Get Report

, which could come today, to buy a possible pullback on the "news." Just don't overstay your welcome, and keep stops relatively tight, as it's still a bear market rally in techland until proven otherwise.

Bill Meehan is the Chief Market Analyst for

Cantor Fitzgerald, a Manhattan-based institutional trading and research firm. Prior to that, he was a market analyst for Prudential Securities. At time of publication, Meehan was long Lucent and Philip Morris, although holdings can change at any time. He appreciates your feedback at

commentarymail@thestreet.com.

Morning News, Copyright, 1999 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.