What Painted A Different Story Today…

October 8, 2002
Daniel Beighley

The
major indexes staged impressive reversals but market breadth painted
a different story from price action, with mostly negative readings. NYSE
declining issues beat advancing issues by a ratio of 1.24, and up volume over
down volume by a 1.36 ratio. Nasdaq declining issues over advancing issues came
in at 1.08, and down volume beat up volume by a 1.37 ratio.

Volatility was rampant again. Price action began the session with choppy
reversals to the downside; the day’s lows were hit by noon ET and powered
higher to the day’s highs by 3 pm ET. Sellers dominated into the close. Retail
issues made nice gains throughout the session in anticipation
of a resolution to the West Coast lockout by President Bush. In the last 20
minutes of the trading day, Bush did in fact intervene, with little reflexive
action from the markets.

The
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closedÂ +1.05% at
7331.42.

There were no economic
releases.

U.S. Treasury Bonds
closed -3 at 113 ’27.

The dollar was +0.59 at
108.49.

Volume was above average at
1,888,038,000 on
the NYSE, and 1,830,173,000
on the Nasdaq.

The
VIX
was -2.72 at 46.46. The TRIN
was -0.81 at 0.65.

Stocks in the news:

Beverage Pepsico
(
PEP |
Quote |
Chart |
News |
PowerRating),
+14.86% at 41.10, beat its third-quarter earnings expectations by a penny, with
profits of $0.56 per share.

Education company Apollo
Group
(
APOL |
Quote |
Chart |
News |
PowerRating), +9.35% at 43.94, beat its fourth-quarter earnings
estimates by $0.04 with profits of $0.26 per share.

Retailer Dollar Tree
(
DLTR |
Quote |
Chart |
News |
PowerRating),
+4.55% at 20.44, cut its fourth-quarter sales estimates to $825-830 million vs.
the Multex consensus of $847.56 million.

Drug store chain CVS
(
CVS |
Quote |
Chart |
News |
PowerRating),
+7.87% at 25.89, announced that it expects its third- and fourth-quarter
earnings will come in above expectations. The company also reported a 8.3% rise
in same-store sales.

Cigarette maker Phillip
Morris
(
MO |
Quote |
Chart |
News |
PowerRating), -6.11% at 36.22, was downgraded by Merrill Lynch to
“neutral” from “buy” due to West Coast litigation.

Auto giant General Motors
(
GM |
Quote |
Chart |
News |
PowerRating),
-6.35% at 33.60, lowered its 2003 sales outlook due to weak world
economies. The auto sector has also been downgraded as a whole by CSFB.

Computer hardware maker International
Business Machines
(
IBM |
Quote |
Chart |
News |
PowerRating), +0.33% at 57.05, had its December quarter and
2003 estimates lowered by Goldman Sachs, though it said the company is better
shape than most tech companies.

Financial services company
Household International
(
HI |
Quote |
Chart |
News |
PowerRating), +1.41% at 23.58, was downgraded by CIBC to
“sector underperform” from “sector perform” due to an
anticipation of credit quality deterioration.

Networking company Cisco
Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), -5.28% at 8.60, had its estimates cut by Merrill Lynch
who cut its fiscal first-quarter and earnings targets on the company. Cisco also
had its estimates cut by Bear Sterns.

What Painted A Different Story Today…

BUY THE FEAR, SELL THE GREED

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