A Pivotal Point For Market Players
The
markets ended mixed on the day, as price action moved mostly sideways
for the session. The three major averages are all trading above their 50-day
moving averages, which may prove to be pivotal going forward. News-wise, Home
Depot grabbed the top headlines as it issued a
profit warning that also sent other stocks in the industry down in sympathy.
Overall volume for the markets came in short of yesterday’s showing, and remains
below average.
Standing out, the Gold and
Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) broke out to a 6-month high, in a shift towards
defensive assets. Price action for the index has been consolidating in a handle
for the past two weeks.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed -0.06% at 8,601.69. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed -0.04% at 908.60. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed +0.15% at
1,387.02.
The biggest gainers on the day
were airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating), +2.53%, gold and silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating),
+2.17%, and computer hardware
(
$GHA.X |
Quote |
Chart |
News |
PowerRating), +1.86%.
The biggest laggards on the day
were retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating), -4.06%, oil service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating),
-0.99%, and healthcare providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating), -0.79.
In economic news,
construction spending rose 0.3% vs. expectations of a 0.1% rise.
The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was +010 at 113 140.
The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was -0.61 at 102.86.
Volume was below
average, with the NYSE coming in at 1,105,955,000 and the Nasdaq at
1,140,315,000.
Market breadth was mixed,
with NYSE advancing issues over declining issues by a ratio of 1.18, and down
volume over up volume by a 1.10 ratio. Nasdaq declining issues over advancing
issues came in at 1.08, and up volume beat down volume by a 1.55 ratio.
The
VIX was -0.54 at 27.98. The
TRIN was +1.06 at 1.29.
Leading the Dow higher:
Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), +4.43% at 37.43, Johnson &
Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating), +2.67% at 56.81, AT&T Corp.
(
T |
Quote |
Chart |
News |
PowerRating), +2.44% at
27.66, Allied Capital Corp.
(
ALD |
Quote |
Chart |
News |
PowerRating), +2.18% at 22.92, Hewlett
Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating), +2.03% at 18.57, and JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), +1.96%
at 25.94.
Stocks in the news:
Home retailer Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), -14.06% at 21.38, 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), -6.17% at 36.92, was downgraded by Bank of
America to “market perform” from “buy.”
Tool companies traded in
sympathy as Black & Decker
(
BDK |
Quote |
Chart |
News |
PowerRating), -9.50% at 40.01, Stanley Works
(
SWK |
Quote |
Chart |
News |
PowerRating), -6.37% at 33.76, and Masco
(
MSCO |
Quote |
Chart |
News |
PowerRating), .
Software company Cadence
Design Systems
(
CDN |
Quote |
Chart |
News |
PowerRating), -20.75% at 9.24, reduced its fourth-quarter
estimates due to weak industry demand.
In the retail sector,
Walgreen’s
(
WAG |
Quote |
Chart |
News |
PowerRating), +6.84% at 32.16, 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), -5.09% at 29.99, 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), +2.67% at
56.81, and Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating), +1.88% at 43.80.
Also in the drug making biz,
Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating), +6.07% at 106.07, raised its earnings guidance for
the fiscal third-quarter by 15% due to strong sales volume, and Biovail
(
BVF |
Quote |
Chart |
News |
PowerRating),
+5.53% at 29.00, 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
13.33, and Starwood
(
HOT |
Quote |
Chart |
News |
PowerRating), +0.73% at 24.73.
Networking company Cisco
Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), +1.97% at 13.91, 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), , +4.43% at 37.43, was upgraded by Deutsche Bank to
“buy” from “hold.”
Airline company Southwest
Airlines
(
LUV |
Quote |
Chart |
News |
PowerRating), +1.05% at 14.35, 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), +8.20% at 36.28, 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..
*Correction:
Yesterday’s piece cited the Dow as trading below its 50-day moving average. Due
to bad data this was incorrect.