This Breakout Could Be Sending The Market A Message
The
markets have been flat-lining in slightly negative territory for most
of the morning, as price action takes a rest from yesterday’s trend day. The
three major averages are trading right at their 50-day moving averages.
Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating) takes the top story today,
as the company issued an earnings warning for 2003. Meanwhile the
Gold & Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) has broken
out to a new 6-month high, a sign of money moving towards a defensive area.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) is -0.31% at 8,580.91 The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) is
-0.51% at 904.41. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is -0.50% at 1,377.87.
Leading to the upside are
gold and silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), +3.26%, airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
+2.43%, and pharmaceuticals
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), +0.90%.
The day’s laggards are
retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating), -3.86%, biotechnology
(
$BTK.X |
Quote |
Chart |
News |
PowerRating),
-1.17%, and telecom
(
IXTC.X |
Quote |
Chart |
News |
PowerRating), -1.10%.
In economic news,
construction spending rose 0.3% vs. expectations of a 0.1% rise.
The 10-year U.S. Note
is -015 at 113 115.
The Dollar is +0.67 at
102.80.
Gold is +0.56 at 352.10.
Crude Oil is +0.83 atÂ
32.68.
Volume is at 538,779,000
on the NYSE, and 597,387,000 on the Nasdaq.
Market breadth is mostly
negative, with NYSE declining issues over advancing issues by a ratio of
1.11, and down volume over up volume by a 1.61 ratio. Nasdaq advancing issues
over declining issues came in at 1.31, and down volume is over up volume by a
1.06 ratio.
Leading the Dow lower are:
Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating),
-13.14 at 21.61, Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), -2.59% at 50.26, General Electric
(
GE |
Quote |
Chart |
News |
PowerRating), -1.68% at 25.05, Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating), -1.48% at 52.92,
Microsoft Corp.
(
MSFT |
Quote |
Chart |
News |
PowerRating), -1.45% at 52.94, and McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating),
-1.38% at 16.32.
Stocks in the news:
Home retailer Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), -13.22% at 21.59, issued an earnings warning for 2003 with EPS
expected to be $1.53-$1.55 vs. previous estimates of $1.57. Also in the sector,
Lowe’s Co.
(
LOW |
Quote |
Chart |
News |
PowerRating), -7.27% at 36.49, was downgraded by Bank of America
to “market perform” from “buy.”
In the retail sector,
Walgreen’s
(
WAG |
Quote |
Chart |
News |
PowerRating), , beat its first-quarter earnings expectations by
$0.02 with profits of $0.22 per share.
Medical equipment maker
Guidant
(
GDT |
Quote |
Chart |
News |
PowerRating), +3.82% at 31.25, sold off after it announced it is
unlikely it will purchase Cook Group due to poor results of a drug coated stent.
The news was good for competitors Johnson & Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating), +2.22% at
56.56, and Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating), +2.05% at 43.87.
Also in the drug making biz,
Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating), +4.98% at 104.98, raised its earnings guidance for
the fiscal third-quarter by 15% due to strong sales volume, and Biovail
(
BVF |
Quote |
Chart |
News |
PowerRating),
+4.62% at 28.75, received FDA approval for its herpes labials drug Zovirax.
Merrill Lynch reduced its 2003
estimates for the hotel companies Hilton Hotels
(
HLT |
Quote |
Chart |
News |
PowerRating), +0.22% at
13.39, and Starwood
(
HOT |
Quote |
Chart |
News |
PowerRating), +0.65% at 24.71.
Networking company Cisco
Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), +0.81% at 13.75, had its estimates cut by Piper Jaffray
with a price target of $11 with the belief that the company will face a
challenging environment going into 2003. Dow component and photo giant
Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), , +4.35% at 37.40, was upgraded by Deutsche Bank to
“buy” from “hold.”
Airline company Southwest
Airlines
(
LUV |
Quote |
Chart |
News |
PowerRating), +0.70% at 14.30, announced that its December sales
increased 9.7% as the percentage of seats filled reached 66% vs. 64.5% from a
year earlier.
Communications equipment maker
ADTRAN
(
ADTN |
Quote |
Chart |
News |
PowerRating), +7.61% at 36.08, raised its earnings outlook for the
fourth-quarter to $0.30-$0.32 per share from a consensus of $0.21. The company
was also downgraded by Needham, though is up in the pre-market.