Will We See Another Late-Day Recovery?

  • June 13, 2003
  • Vincent Mao

Stocks
are lower across the board this midday. After the Dow cracked above
the 9,200 level and made further headway into 11-month highs yesterday, stocks
are having a rough time today. An unexpected drop in consumer sentiment is
weighing heavily on the major indices. Better-than-expected earnings from Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating) failed to inspire buying interest. Oracle did hint that “things are
starting to turn around.” Separately J.D. Edwards
(
JDEC |
Quote |
Chart |
News |
PowerRating)  is suing Oracle
for $1.7 billion in compensatory damages over its takeover attempt of Peoplesoft
(
PSFT |
Quote |
Chart |
News |
PowerRating). Nearly every sector with the exception of gold is in the red.
Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), which have been in the spotlight the last couple of days, are
among the biggest losers of the day. Deutsche Bank downgraded chip giant Intel
(
INTC |
Quote |
Chart |
News |
PowerRating)
from “buy” to “hold” on valuation basis. Bonds are again higher after the sour
economic news. The Dollar is lower. 

The Dow Jones Industrial
Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) is -0.99% at 9,104.81. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
is -1.09% at 987.57. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is -1.46% at 1629.37.

The day’s leading sectors are
Gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), +2.09%.

Weak today are Paper
(
$FPP.X |
Quote |
Chart |
News |
PowerRating),
-7.26%, Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), -3.39%, Oil Services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating),
-2.88%, Networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), -2.71% and Internets 
(
$DOT.X |
Quote |
Chart |
News |
PowerRating),
-2.51%.

In economic news, the
University of Michigan Consumer Sentiment Index for June came in at 87.2 vs.
an expected 92.1. Producer prices for May came in -0.3% vs. expectations
of -0.2%. The core PPI was inline at +0.1%. The Trade Balance in April
came in at -$42 billion inline with estimates.  

The 10-year U.S. Note
is  +155 at 120 085.

The dollar is -0.48 at
92.82.

Gold is +3.30 at 357.20.

Crude Oil -1.26 at
30.25.

Volume is at 669,000,000
on the NYSE, and at 1,000,000,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 2.01, and down
volume over up volume by a 3.43 ratio. Nasdaq declining issues over advancing
issues at 2.22, and down volume over up volume is at a 4.26 ratio.

Top Dow stocks are:

Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), +1.36% at 33.38,
Procter & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating) +0.38% at 23.64.

Stocks in the news:

Ameritrade Holdings
(
AMTD |
Quote |
Chart |
News |
PowerRating)
is higher by 3.81% on more than double its average volume after raising
third-quarter guidance. The company raised their third-quarter targets to 9 to
11 cents a share on revenues between $173 to $197 million. Wall Street had
expected 8 cents a share. Ameritrade also reported an 25% pickup in customer
trading volume over the last two months. 

Adobe Systems
(
ADBE |
Quote |
Chart |
News |
PowerRating)
is lower by 10% on triple its average volume after giving a cautious outlook.
Late yesterday, the company reported second-quarter results of 28 cents a share
and beat estimates by 2 cents. Looking ahead, the company is forecasting
third-quarter results between 22 to 25 cents a share or below Street estimates
of 26 cents a share.  

Andrx
(
ADRX |
Quote |
Chart |
News |
PowerRating) is
higher by 7% on heavy volume. The shares are higher today after the company’s
launched its generic over-the-counter version of the popular allergy drug,
Claritin.  

Mandalay Resorts
(
MBG |
Quote |
Chart |
News |
PowerRating)
is higher by 10.88% on double its average volume. The shares are higher after
the company announced its first-ever dividend of 23 cents a share. Mandalay’s
dividend will be payable on August 1, 2003 to shareholders of record on June 26,
2003.

Enterprise software maker
Oracle Systems
(
ORCL |
Quote |
Chart |
News |
PowerRating) is higher by 2.5% on heavy volume. The company
reported fourth-quarter results of 16 cents a share, up 33% from the same period
a year ago. Oracle also beat estimates by 2 cents. 

General Dynamics
(
GD |
Quote |
Chart |
News |
PowerRating)
is off by 2.82% after Merrill Lynch downgraded the stock from “buy” to
“neutral.” Merrill based the downgrade solely on valuation. 

SafeNet
(
SFNT |
Quote |
Chart |
News |
PowerRating) is
lower by 4% after it announced that it has filed with the SEC for the sale of
2.5 million common shares. The company plans to use the proceeds for R&D and
acquisition purposes.  

Vincent Mao

Â