A Plan For News-Driven Markets

March 20, 2003
Daniel Beighley

The
major indexes posted slight gains for the day as market action in
Iraq dominated the news. Volume was light, indicating a lack of participation
from players as an outcome for the war is awaited. It is difficult to anticipate
just what will bring a decisive finish to the conflict, or how long it will
take. In news-driven markets like the one we’re in, perhaps the best plan for a
trader is to do nothing. Price action for the day opened lower, and pushed
higher throughout the session.

In economic news, initial
claims were at 421K vs. expectations of 415K, leading indicators came
in at an expected -0.4%, the Philadelphia Fed disappointed with a reading
of -0.80% vs. an expected -1.0%, and the treasury budget was -96.3
billion vs. expectations of -98.0 billion.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was -080 at 113 105.

The US dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was -0.48 at 101.63.

Volume was below
average, with the NYSE coming in at 1,408,575,000 and the Nasdaq at
1,569,598,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.39, and up
volume over down volume by a 1.54 ratio. Nasdaq advancing issues over declining
issues came in at 1.23, and up volume beat down volume by a 1.60 ratio.

The

VIX was -0.92 at 35.26. The

TRIN was +0.25 at 0.90.

Biggest Dow advancers were:

Stocks in the news:

Conglomerate Textron Inc.
(
TXT |
Quote |
Chart |
News |
PowerRating), -15.71% at 28.15, sold off after issuing an earnings warning due to a
slowdown in business jet deliveries from its Cessna Aircraft division.

Audio retailer Tweeter Home
Entertainment Group
(
TWTR |
Quote |
Chart |
News |
PowerRating), -9.545 at 4.93, declined after saying that
it expects to lose $0.06-0.10 per share for its fiscal second-quarter vs. a
consensus estimate for a profit of $0.02.

Natural gas utilities company
El Paso
(
EP |
Quote |
Chart |
News |
PowerRating), +16.36% at 6.40, rallied on news it will pay out $1.7
billion to the state of California to settle a lawsuit to end charges of
manipulation.

Electronic instrument and
control company Jabil Circuit
(
JBL |
Quote |
Chart |
News |
PowerRating), +7.00% at 18.48, rallied after
reporting earnings in line with expectations, with profits of $0.16 per share.

Shoe maker Nike
(
NKE |
Quote |
Chart |
News |
PowerRating),
+5.53% at 52.85, has beat its third-quarter earnings by $0.01 with profits of
$0.47 per share.

Grocery store operator
Supervalu
(
SVU |
Quote |
Chart |
News |
PowerRating), -3.55% at 14.10, has issued a profit warnings for its
fiscal fourth-quarter due to pressure on its distribution.

Oil and gas company
Occidental Petro
(
OXY |
Quote |
Chart |
News |
PowerRating), -1.49% at 30.24, has been downgraded by Deutsche
Securities to “hold” from “buy”.

Software and programming
company Manhattan Associates
(
MANH |
Quote |
Chart |
News |
PowerRating), -4.91% at 19.93, has been
downgraded by JP Morgan to “neutral” from “overweight”.

Internet infrastructure company
Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), -1.26% at 14.04, has announced that it will
buy The Linksys Group for $500 million in stock. The Linksys Group provides
networking products for the home and small office.

Financial services company came
in with upside earnings surprises this morning with Lehman Brothers
(
LEH |
Quote |
Chart |
News |
PowerRating),
-0.26% at 59.53, beating its first-quarter earnings expectations by $0.18 with
profits of $1.15 per share, Morgan Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating), +1.44% at 40.05,
beating its first-quarter earnings by $0.20 with profits of $0.82 per share, and
Goldman Sachs
(
GS |
Quote |
Chart |
News |
PowerRating), -0.27% at 70.08, beating its first-quarter
earnings expectations by $0.33 with profits of $1.29 per share.

In the biotechnology sector
Genetech
(
DNA |
Quote |
Chart |
News |
PowerRating), -3.40% at 35.15, has been downgraded by CSFB to “underperform”
from “neutral”.

Transportation company
Federal Express
(
FDX |
Quote |
Chart |
News |
PowerRating), +2.93% at 56.80, has been upgraded by Morgan
Stanley to “overweight’ from “equal-weight”.

Oil company Royal Dutch
(
RD |
Quote |
Chart |
News |
PowerRating), -0.24% at 40.54, has been upgraded by Lehman Brothers to “overweight”
from “equal-weight”.

Retailer Ross Stores
(
ROST |
Quote |
Chart |
News |
PowerRating),
+5.14 at 38.04, has been upgraded by CSFB to “outperform” from “neutral”.

Furniture maker Herman
Miller
(
MLHR |
Quote |
Chart |
News |
PowerRating), -0.61% at 16.06, has guided lower for the fourth-quarter
and now expects to earn $0.01-0.06 per share vs. previous estimates of $0.17 per
share.

danielb@tradingmarkets.com

A Plan For News-Driven Markets

BUY THE FEAR, SELL THE GREED

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