What The Market Thinks Of The Retail Data

The major averages are wavering around the unchanged level midday, as key updates from retail companies are factored in. The retail sector is slightly positive, as Sears leads the action with better-than-expected same-store sales. Weighing the sector down is JC Penney which has guided lower for the first quarter. Yahoo! is riding high and giving Internet stocks a boost after posting better-than-expected earnings, though biotechs are getting whacked after Genentech's earnings disappointed.

The Dow Jones Industrial Average ($INDU.X | Quote | Chart | News | PowerRating) is -0.20% at 8,181.63. The S&P 500 ($SPX.X | Quote | Chart | News | PowerRating) is +0.12% at 866.99. The Nasdaq ($COMPQ | Quote | Chart | News | PowerRating) is +0.21% at 1,359.56.

Today's strength is in Internet ($GIN.X | Quote | Chart | News | PowerRating), +4.55%, oil service ($OSX.X | Quote | Chart | News | PowerRating), +2.76%, and semiconductors ($SOX.X | Quote | Chart | News | PowerRating), +0.99%.

Weak today are biotechnology ($BTK.X | Quote | Chart | News | PowerRating), -1.69%, airlines ($XAL.X | Quote | Chart | News | PowerRating), -1.00%, and healthcare providers ($RXH.X | Quote | Chart | News | PowerRating), -0.81%.

In economic news, initial claims came in at 405K vs. expectations of 425K, the trade balance showed a loss of $40.3 billion vs. expectations a loss of $41.2 billion.

The 10-year U.S. Note is -010 at 114 165.

The dollar is -0.37 at 100.16.

Gold is -0.10 at 325.50.

Crude Oil  -0.48 at 28.35.

Volume is at 593,901,000 on the NYSE, and at 645,082,000 on the Nasdaq.

Market breadth is mixed, with NYSE advancing issues over declining issues by a ratio of 1.12, and down volume over up volume by a 1.29 ratio. Nasdaq declining issues over advancing issues are at 1.09, and up volume is over down volume by a 1.42 ratio.

Media and commerce company USA Interactive (USAI | Quote | Chart | News | PowerRating), +7.22% at 26.91, announced it will purchase the shares of Hotels.com (ROOM | Quote | Chart | News | PowerRating), +20.88% at 64.43, that it doesn't already own in a deal worth $1.1 billion.

Chip maker Applied Micro Circuits Corp. (AMCC | Quote | Chart | News | PowerRating), +2.01% at 3.407, said it will eliminate 626 jobs, or 31% of its work force.

Media company Fox Entertainment (FOX | Quote | Chart | News | PowerRating), -19.56% at 21.92, has been downgraded by Merrill Lynch to "sell" from "buy" after its parent company News Corp. (NWS | Quote | Chart | News | PowerRating), -6.39% at 25.48, announced its interest in acquiring Hughes Electronics (GMH | Quote | Chart | News | PowerRating), -9.67% at 10.37.

Investment services company T. Rowe Price (TROW | Quote | Chart | News | PowerRating), -2.87% at 27.05, has guided lower for the first-quarter, and now expects to earn $0.29 per share vs. a consensus of $0.34 per share.

Retailers are active today with  JC Penney (JCP | Quote | Chart | News | PowerRating), -4.45% at 18.05, has guided lower for the first-quarter, and now expects to earn $0.18-0.23 per share vs. a consensus of $0.32. And Talbots (TLB | Quote | Chart | News | PowerRating), +7.82% at 28.00, has guided lower for the first-quarter, and now expects to earn $0.48-0.51 per share vs. a consensus of $0.54.

Sears (S | Quote | Chart | News | PowerRating), +3.45% at 26.10, announced that monthly same store sales were down 3.1% which was better than expected due to a strong home improvement business.

Federated Department Stores (FD | Quote | Chart | News | PowerRating), +0.89% at 28.39, said that same store sales were down 6.5%, though believes it will meet its first-quarter earnings targets.

Computer services company GTECH (GTK | Quote | Chart | News | PowerRating), -4.83% at 34.49, has beat its fourth-quarter earnings expectations by $0.10 with profits of $0.72 per share.

Beverage company Constellation Brands (STZ | Quote | Chart | News | PowerRating), +5.44% at 24.43, has beat its fourth-quarter earnings by $0.03 with profits of $0.44 per share.

Online company Yahoo! (YHOO | Quote | Chart | News | PowerRating), +3.58% at 23.69, has beat its first-quarter earnings expectations by $0.02 with profits of $0.08 per share.

Software company Infosys (INFY | Quote | Chart | News | PowerRating), -28.25% at 42.57, has guided lower for 2004, and now expects to see earnings per share at $1.70-1.73 vs. a consensus of $1.83. The company also said it expects to meet first-quarter earnings, though partially blames a weak economy on longer term targets.

Prudential has upgraded the oil services and equipment sector to "market outperform" from "market perform", and has upgraded the following stocks to "buy" from "hold": Transocean Inc. (RIG | Quote | Chart | News | PowerRating), +3.15% at 20.30, Noble Corp. (NE | Quote | Chart | News | PowerRating), +2.40% at 32.00, Weatherford International (WFT | Quote | Chart | News | PowerRating), +2.83% at 38.86, and Schlumberger (SLB | Quote | Chart | News | PowerRating), +2.84% at 38.77.

Transportation company Expiditors International (EXPD | Quote | Chart | News | PowerRating), -3.18% at 34.14, has been downgraded by JP Morgan to "neutral" from "overweight".

Bookseller Barnes and Noble (BKS | Quote | Chart | News | PowerRating), -0.65% at 18.39, has guided lower for the first-quarter, and expects a loss between $0.07-0.11 vs. a consensus of a loss of $0.03.

Healthcare company HCA Healthcare (HCA | Quote | Chart | News | PowerRating), -4.49% at 35.97, has been downgraded by Bank of America to "neutral" from "buy".

danielb@tradingmarkets.com