Stock reports

Stock reports as of February 16, 19:35

		Index		Change
Dow Jones		10815.50		- 0.69%
NASDAQ		2441.29		- 4.37%
PTC		180.11		- 3.55%

Russian stock market
After two days of strong growth, Russian markets sharply fell down. Against the background of record volumes of transactions for 2001 - 37 million dollars, shares of the majority of Russian blue chips fell in price by 4-5%. The RTS composite index fell by 3.55% and amounted to 180.11 points. Once again, the leader in the volume of transactions was the securities of RAO UES of Russia, which today accounted for more than a third of the total volume of transactions ($14.5 million). At the end of the trading session, their price decreased by 5.6%. Securities of LUKoil depreciated by 5.2% (transaction volume √ 5.4 million dollars), YUKOS - by 4.1%, Surgutneftegaz - by 5.0%. Traders say that the market decline occurred in two waves. The morning drop in quotes was explained by the fact that after two days of growth, many operators decided to take profits. After this, the market “leveled off,” but in the second half of the trading day bad news came from overseas: the Department of Labor announced that the inflation rate in the United States was significantly worse than all official forecasts. As a result, the morning drop of 2% was aggravated by another drop of 2-2.5%. Today, traders agree in their forecasts: the growth of Russian shares was a consequence of the entry of non-residents into the market, but the same foreign investors, frightened by the behavior of the American markets, can bring down the Russian one by starting aggressive sales. However, it is quite possible that in the absence of negative news about the state of the American economy, the market will soon go up again.

American stock markets
The release of the quarterly report of the second largest manufacturer of fiber optic equipment in the United States, Ciena, recorded a profit of 18 cents per share, which exceeded analysts' forecasts by 3 cents. The company's profit increased 6 times compared to last year. In addition, the company reported that sales could double this year. With this positive news, Ciena shares rose 15.87%, providing support to all companies in the technology sector. JDS Uniphase rose by 9.39%, Juniper Networks - by 3.15%, Cisco Systems - by 4.89%. Shares of the largest Internet service provider AOL Time Warner increased in price by 2.93%, securities of YAHOO Inc. - by 9.87%. As a result, the NASDAQ index increased by 61.51 points (+2.47%) to 2552.91 points. At the same time, after the official close of stock trading in the United States, quarterly reports from Dell Computer and Hewlett-Packard were released, which somewhat reduced the optimism of American investors regarding the profits of companies in the high-tech sector, mainly due to lowered development forecasts for the companies. Against this background, a downward correction in sector share prices is possible today, as evidenced by the negative dynamics of US stock futures. The drivers of growth among the blue chips included in the calculation of the Dow Jones index yesterday were the shares of Minnesota Mining & Mfg Co., which rose in price by 3.41%, United Technologies Corp. - by 2.90% and IBM - by 1.46%. Against this background, the Dow Jones index rose by 95.61 points (+0.89%) to 10891.02 points. The S&P 500 index, which includes about 75% of American stocks, increased yesterday by 10.69 points (+0.81%) to 1326.61 points.

Russian stock market
Today the Russian stock market demonstrated unexpected growth rates. With a record trading volume of $35.5 million over the past three months, quotes for the most liquid securities increased by 4–9.5%, and the RTS composite index exceeded 180 points and stopped at 186.5 points. For the third day in a row, securities of RAO “UES of Russia” were in the highest demand, transactions with which accounted for a third of the trading volume, with both ordinary and preferred shares being bought up. Today, with the volume of transactions in RAO shares amounting to 10.14 million dollars, their quotes rose by 9.36% to the level of 0.1195/0.1199 dollars. Traders name two possible reasons for such high demand for RAO UES of Russia securities. This may be an attempt by some players to collect a large block of shares for the company's annual meeting of shareholders. In addition, it is possible that shares are being purchased on the eve of the closure of the register, on the date of which shareholders receive dividends. LUKoil quotes increased by 4.4% with a transaction volume of $4.3 million. Prices for Yukos shares, with a trading volume of $4 million, rose by 4.02%. Demand for the company's securities has recently been virtually independent of market conditions, which was explained today: USB Warburg acquired about 1% of the shares for the Wisconsin Investment Council. After yesterday's decision by the State Duma not to revise the results of the privatization of Norilsk Nickel, the company's quotes went up sharply. With a transaction volume of almost $3 million, the growth was 7.5%. Traders and analysts gave many explanations for today's market behavior, although just yesterday no one dared to predict such dynamics. Today they said that the general situation in the country is favorable, the reduction in oil export duties demonstrates the government’s determination to follow the path of reform, and even in the news about negotiations with the IMF mission, some analysts saw good signs. Meanwhile, the market increase is explained by a rather large volume of orders for the purchase of shares from non-residents by Russian standards. Presumably, encouraged by the behavior of American markets, foreign players decided to enter undervalued and relatively stable Russian securities.

American stock markets
Trading on February 14 on American exchanges showed mixed results. The high-tech sector unexpectedly surged upward and compensated for all the losses of 2001. The NASDAQ Composite Index rose 2.6% to 2,491.40 (+21 compared to the first trading of the year). However, the recession did not leave the US trading floors, moving to the “old” economy sector. The Dow Jones index fell 1% to 10,795.41, also at its early 2001 level. The growth of the technology market is explained by the invasion of “garbage” players, who are buying up once fabulously expensive shares of “new economy” enterprises at a lower price. Shares of software company Oracle jumped 9% to close at $25. The share price of Cisco, the largest company in the production of networking equipment for the Internet, rose almost 3% and reached $29.38. Transactions with securities of Intel Corporation, which fell in price by 7.7% in February, regained more than 5% and are now quoted at $34.13. The price soared even for shares of those companies in the high-tech sector that, before trading, announced a decrease in profits based on the results of the first quarter of 2001. Based on the results of the trading session, some traders even began to speculate that the decline in the NASDAQ sector had finally ended. Meanwhile, the recession has not left the US stock exchanges, moving to the “old economy” sector. The price of 3M Corporation securities fell by 3.18% to $110.96, General Motors fell by more than 1% to $54.50 per share. The exception was the shares of the tire manufacturer Goodyear, which rose in price by almost 1%, but this was preceded by a message about the reduction of more than 7,000 jobs in the company. Experts believe that the failure of the industrial sector is a consequence of disappointment with the actions of the Federal Reserve, which has not yet agreed to further reduce the borrowed interest rate. One of the traders says that the situation that has now created in the US stock markets (the fall is spreading from sector to sector) is beneficial for a large buyer of shares, but ruinous for small operators trying to follow market trends.

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