Here’s Why We Could See Increased Volatility This Afternoon

June 30, 2003
Vincent Mao

Stocks
are slightly lower this midday.Â The major indices are starting this
holiday-shortened week and end of month/quarter on a negative note. Stocks
reversed earlier gains after the worse-than-expected Chicago PMI report. Tech
stocks showed early resilience, bolstered by an industry report. However they
soon went into the red. The Semiconductor Industry Association said that global
chip sales rose for the third straight month and noted that its forecast for
10.1% growth is still on track, as geopolitical woes and worries over SARS are
subsiding. Retail issues are performing well today after Wal-Mart affirmed its
June sales forecast of 2% to 4%. Since this is the end of the month/quarter and
we are near a holiday, stocks usually have an upward bias. In addition
volatility is likely to increase due to the annual changes in the Russell 2000
Index. Bonds are higher today after its recent sell off. The Dollar is lower
after its recent run.Â

In economic news, the
Chicago Purchasing Managers Index for June came in at a reading of 52.5, a
tad below estimates of 53.0. This was the second consecutive advance for the
index.Â Â

The 10-year U.S. Note
isÂ +135 at 117 155.

The dollar is -0.34 at
95.15.

Gold is + 1.70 at
347.20.

Crude Oil +0.76 at
30.03.

Volume is at 542,000,000
on the NYSE, and at 698,000,000 on the Nasdaq.

Market breadth is negative
on the NYSE and mixed on the Nasdaq, with NYSE declining issues over
advancing issues by a ratio of 1.06, and down volume over up volume by a 1.06
ratio. Nasdaq declining issues over advancing issues at 1.23, and up volume over
down volume is at a 1.31 ratio.

Top Dow stocks are:

Stocks in the news:

Cendant
(
CD |
Quote |
Chart |
News |
PowerRating) is
trading higher by 1% after the travel and real estate company reaffirmed its
second-quarter forecast and declared a quarterly dividend. The company said that
it planned to meet or beat analysts’ estimates of 35 cents a share in the second
quarter. Cendant also declared an annual dividend ofÂ 28 cents a share or 7 cent
each quarter.Â

DaimlerChrysler
(
DCX |
Quote |
Chart |
News |
PowerRating)
is higher by 1.5% after it announced a plan to restructure its trucks business.
DaimlerChrysler, whose line of trucks includes Mercedes-Benz, Freightliner,
Sterling, and Western star, will consolidate its truck operation under one
management.Â Â

Goodyear Tire
(
GT |
Quote |
Chart |
News |
PowerRating) is
trading lower by 5% on heavy volume. This past weekend, the company broke off
talks with the United Steelworkers of America. Goodyear had been asking for wage
and benefit concessions. The union is prepared to strike if necessary.Â

Seagate Technlogy
(
STX |
Quote |
Chart |
News |
PowerRating)
is lower by 1.2% despite lifting its fourth-quarter forecast. The hard-drive
maker now sees revenues between $1.53 and $1.56 billion and earnings between 30
to 33 cents a share. Analysts had been expecting revenues of $1.54 billion and
profits of 28 cents a share.Â

Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) is
higher by 2.3% after Smith Barney upgraded the semiconductor giant to
“outperform” from “in line” Smith Barney based the upgrade on the belief that
the company will continue to outperform expectations.Â Â

As always, please send me your
comments or questions.

Vincent Mao

Â vincentm@tradingmarkets.com

Here’s Why We Could See Increased Volatility This Afternoon

BUY THE FEAR, SELL THE GREED

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