This Is What The Market Hinges On

January 27, 2003
Daniel Beighley

The markets are in negative
territory mid-day, as concerns of war with IraqÂ have escalated due to the UN
inspection team’s reporting of the situation. In his testimony today, Hans Blix
has cited various wrongdoings of the Iraqi government in its dealings with
chemical weapons. The situation has created much uncertainty as to how the
situation will be resolved, which continues to drag on the markets. Price action
opened lower off the bell, staged an early reversal, then sold off again to new
lows.

Standing out today, the 10-year
note is lower, which is out of synch with typical market selloffs.

There are no sectors in
positive territory mid-day.

In economic news, existing home sales beat
expectations with a rate of 5.86M, economists were looking for a 5.62 level.

The 10-year U.S. Note
is -165 at 114 055.

The Dollar is +0.02 at
99.47.

Gold is +3.40 at 371.80.

Crude Oil is -0.90 at
32.38.

Volume is at 713,332,000
on the NYSE, and at 801,508,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 3.29, and down
volume over up volume by a 8.03 ratio. Nasdaq declining issues over advancing
issues are at 2.41, and down volume is over up volume by a 2.62 ratio.

Leading the Dow lower are:

Stocks In The News:

Hotel company Hilton Hotels
(
HLN |
Quote |
Chart |
News |
PowerRating),
-0.59% at 25.25, announced that its earnings were up ten-fold for the quarter,
although the company is cautious over 2003 earnings due to a soft economy.

In the retail sector, JC Penny
(
JCP |
Quote |
Chart |
News |
PowerRating),
-2.94% at 18.82, said it expects same-store sales for stores open at least one
year to be less than expected, with flat to slightly higher growth.

Macy’s and Bloomingdale’s department store
operator Federated Department Stores
(
FD |
Quote |
Chart |
News |
PowerRating), +0.62% at 25.80, has raised
its estimates and now expects sales to be flat to down 2%.

Insurance company St. Paul Company
(
SPC |
Quote |
Chart |
News |
PowerRating), -1.14% at 11.72, missed its fourth-quarter earnings expectations by
$0.01 with profits of $0.81 per share.

Software maker Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating), -0.42% at 11.72, was the focus of a Barron’s article in
which the company’s CEO said revenue could get a boost at the end of the year
due to upgrade fees.

Financial services company
Freddie Mac
(
FRE |
Quote |
Chart |
News |
PowerRating), -2.88% at 57.41, has beat its fourth-quarter earnings
expectations by $0.07 with profits of $1.35 per share.

Investment services company
Lehman Brothers
(
LEH |
Quote |
Chart |
News |
PowerRating), -0.54% at 53.77, has been upgraded by Salomon
Smith Barney to “outperform” from “in-line.”

Healthcare facilities company
Quest Diagnostics
(
DGX |
Quote |
Chart |
News |
PowerRating), -3.94% at 52.16, has been downgraded by
Morgan Stanley to “underweight” from “equal-weight.”

danielb@tradingmarkets.com

This Is What The Market Hinges On

BUY THE FEAR, SELL THE GREED

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