This Could Get Volatility Going

March 3, 2003
Daniel Beighley

The
markets succumbed to the will of the bears as price action gapped
higher and closed at the bottom of its daily range. A disappointing ISM number
helped to cool bullish sentiment, as volume was once again below average. Many
traders believe volatility may pick up as potential war with Iraq draws closer.

In economic news, personal
income came in at 0.3% vs. expectations of 0.4%, personal spending
fell 0.1% vs. expectations of a 0.1% rise, the ISM Index came in at 54.0
vs. an expected 52.0, and construction spending was at 1.7% vs. an
expected o.5%.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was +060 at 116 290.

The US dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was -0.63 at 99.18.

Volume was below
average, with the NYSE coming in at 1,156,784,000
and the Nasdaq at 1,244,062,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.01, and up
volume over down volume by a 1.82 ratio. Nasdaq advancing issues over declining
issues came in at 1.28, and up volume beat down volume by a 3.74 ratio.

The
VIX
was -0.06 at 34.09. The TRIN
was +0.96 at 1.81.

Leading the Dow down were:

Stocks in the news:

Handheld computer maker Palm
(
PALM |
Quote |
Chart |
News |
PowerRating), -1.28 at 10.32, sold off after it announced that its fiscal
third-quarter sales will come below expectations due to weak demand.

Household and personal product maker
Procter and Gamble
(
PG |
Quote |
Chart |
News |
PowerRating), -1.27% at 80.82, is reported to be in talks with
German healthcare company Wella for $6 billion.

Credit card company Capital One
(
COF |
Quote |
Chart |
News |
PowerRating),
-8.78% at 28.25, announced that its chief financial officer had quit after the
SEC said it might charge him with insider trading.

Furniture maker Furniture
Brands
(
FBN |
Quote |
Chart |
News |
PowerRating), +3.23% at 18.80, issued an earnings
warning for the first-quarter to $0.50-0.55 vs. a consensus of $0.56.Â

Business services company Equifax
(
EFX |
Quote |
Chart |
News |
PowerRating), +2.65% at 19.69, was downgraded by Morgan Stanley to
“equal-weight” from “overweight”.

Software maker Symantec
(
SYMC |
Quote |
Chart |
News |
PowerRating), +3.78% at 42.00, has been upgraded by UBS Warburg to
“buy” from “neutral”.

Shipping company Federal
Express
(
FDX |
Quote |
Chart |
News |
PowerRating), +1.84% at 52.35, was upgraded by JP Morgan to
“overweight” from “neutral”.

Gold mining company Royal
Gold
(
RGLD |
Quote |
Chart |
News |
PowerRating), -32.64% at 13.10, was cited in Barron’s as being
“wildly overvalued.”

Drug maker Shire
Pharmaceuticals
(
SHPGY |
Quote |
Chart |
News |
PowerRating), +3.49 at 16.28, received an approvable letter
from the FDA for its kidney disease treatment.

danielb@tradingmarkets.com

This Could Get Volatility Going

BUY THE FEAR, SELL THE GREED

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