Stock Market Commentary for Friday, March 4, 2005

Since momentum has petered out, partially due to weaker mutual fund inflows, there was additional profit-taking after the recent run-up. People were anxious about the big employment report coming out this morning. There was some negative analyst commentary that may have spooked tech stocks, but you can ignore that kind of noise.

The good news is that despite a moderate 9.10-point decline on Thursday, Nasdaq did manage to close 10 points above it's low for the day. That tells us that despite the exit of some momentum traders, there is actually some new money coming into the market.

The economic data was reasonably decent.

Nasdaq trading volume was moderate (1.92 billion shares), and breadth was modestly negative, with 1.13 losers for each gainer. This was not a strong sell-off, but simply the kind of evaporation that occurs whenever momentum peters out.

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