These Are The Technicals Traders Are Watching

February 24, 2004
Brice Wightman

Stocks
fell Tuesday as investors continue to rotate out of tech and into more defensive
issues, although
the Semiconductor Index
(
SOX.X |
Quote |
Chart |
News |
PowerRating) managed to eke out a
small gain at +1.41.The day began on a negative note as the consumer confidence number
was much lower than
expected, at 87.3 vs the 92.5 expectation. This was the lowest level since the
Iraq War.

The consumer index has been outperforming the SPX, with stocks like Anheuser
Busch, Pepsi, McDonald’s and Gillette showing relative strength for the week.
Traders are concerned about the negative divergence between the Dow and Nasdaq
on the daily charts and are focusing on the important 50-day moving average.
This is the third day in a row the Nasdaq has closed below its 50-day moving
average. The new high list is shrinking and the A-D line is weaker. UBS said
that restaurant stocks might be a safe haven in the event of market weakness.

The number of consumers who said they had problems finding jobs
rose by 0.6% to 32.1%. In February so far, there have been $1.7
billion in new offerings. Daily money outflow by insiders was $600 million and inflows from
investors exceeded $1 billion.

The State of Pennsylvania is suing
Time Warner
(
TWX |
Quote |
Chart |
News |
PowerRating), saying the company mislead investors about its
financial health and caused public investment funds to lose over $100 million.

Dow	-43.25	10566.37
S&P 500	-1.90	1139.09
Nasdaq	-2.08	2005.44

Economic news releases included
lower consumer confidence numbers at 87.3.

10-year Notes were +015
at 115 050

The dollar
was -0.87 at 86.17.

Gold was +3.89 at
403.89.

Crude Oil was +0.21 at
34.58.

Volume was
1,525,559,000 on
the NYSE, and 2,051,802,000 on the Nasdaq.

Market breadth was negative.

NYSE	Issues
Advancing	1661	Up Vol 608
Declining	1639	Down Vol 826
Ratio	1.01	1.35
Nasdaq
Advancing	1425	Up Vol 883
Declining	1765	Dow Vol 1129
Ratio	1.23	1.28

Stocks in the news:

New issue Kinetic Concepts (KCI)KCI) was priced at
$30 and the first trade was $38. The company makes medical devices and the stock
closed at 40.25.

Kimberly-Clark
(
KMB |
Quote |
Chart |
News |
PowerRating) raised its dividend to
0.40/share from 0.34/share, a 17.6% increase.

Synopsys
(
SNPS |
Quote |
Chart |
News |
PowerRating) reported lower
net income of $32.2 million on sales of $1.2 billion. Its shares fell due to
disappointing earnings numbers and a downgrade by banker SG Cowen. SNPS is down
18% for the day.

HJ Heinz
(
HNZ |
Quote |
Chart |
News |
PowerRating)
reported earnings of $202.2 million on revenue of $2.1 billion. European sales
rose 7.6% to $827.5 million while Asia-Pacific sales rose by 10% to $301.9
million. A favorable foreign-exchange rate was the main reason for the higher
sales although volume-wise, average sales were about 3.8% lower.

Retailer Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating) reported
earnings up 39% on revenue of $15.1 billion. Same-store sales rose 7.6% with net
income reaching $951 million.

IBM announced an additional $ billion stock buyback.

bricew@tradingmarkets.com

These Are The Technicals Traders Are Watching

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