A Lot To Bite Into Today

February 28, 2002
Daniel Beighley

Price action was narrow today,
with the major averages gaining ground in early trading before submitting to the
will of the bears in the last hour, as all three indexes closed negative. Oil
service and broker/dealer stocks were the day’s top gainers, with the
semiconductors once again leading tech down.

Traders had a lot to bite into
today as a mixed bag of earnings announcements and a slew of positive economic
data hit the markets. The economic surprise of the day came with a
revision in the nation’s GDP for the fourth quarter, as it came in at a
growth rate of 1.4%, beating the previous estimate of 0.2%. Also, initial
jobless claims have risen 17,000 to 378,000, worse than the expected 374,000
claims expected. And finally, the Purchasing Management Association of
Chicago’s index of business activity rose to 53.1 for February, up from a
45.1 reading in January. A reading above 50 indicates expansion, and this was
the first time the number reached above that mark in 18 months.

Overall
NYSE volume was 1,348,919,000.
NYSE advancing issues were 1,655,
with up-volume at 615,947,000;
declining issues were 1,448,
with down-volume at 713,178,000.
Overall Nasdaq volume was 1,904,931,000.
Nasdaq advancing issues were
1,631,
with up-volume at 527,451,000;
declining issues were 1,900 with
down-volume at 1,362,008,000.
The VIX
was down 0.03 to 23.06. The TRIN
was up 0.32 to 1.32.

Slightly above-average volume
held the Dow above its 200-day moving average for another day as the price
action once again closed at the bottom of its range. In similar fashion, the
S&P 500 remained above its 20-day MA, and the Nasdaq took another step down,
well below its major MAs. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up
0.56%, had an inside day and remains below its major MAs.

Online auctioneer eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating), up 5.90% to 52.01, benefited from
an upgrade from Morgan Stanley to Strong Buy from Outperform, citing the stock’s
recent fall as an opportunity.

Computer maker Gateway (GTW),
down 10.39% to 4.60,
warned after the bell yesterday that it would record losses for this year
and predicts
earnings and revenue to come in less than expected. The company expects to reach
profitability
in 2003.

Drug maker ImClone Systems Incorporated (IMCL),
up 9.25% to 22.43, announced yesterday that the company’s new cancer drug,
Erbitux, will get a chance to be reviewed by U.S. regulators. Also, the Wall
Street Journal has reported that Bristol–Myers
Squibb (BRL)
has dropped its threat to end its marketing partnership with the company.

Entertainment monster Walt Disney Co.
(
DIS |
Quote |
Chart |
News |
PowerRating), down 5.11% to 23.01,
fell after from Goldman Sachs claimed the company’s second quarter would exceed
the first quarter’s 52% drop.

Natural gas and utilities outfit Williams Companies
(
WMB |
Quote |
Chart |
News |
PowerRating), down
4.03% to 15.45, had
its credit rating by Moody’s cut to “negative” from “stable,”
claiming weakness in the company’s earnings and cash flow as well as the
potential bankruptcy of its subsidiary Williams Communications Group.

Apparel retailer The Limited
(
LTD |
Quote |
Chart |
News |
PowerRating), down 1.09% to 18.09, announced
that its net income rose 37% as revenue fell 11% for the fourth quarter. The
company also said that expects to record no growth for its first quarter
earnings.

A Lot To Bite Into Today

BUY THE FEAR, SELL THE GREED

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