A Solid Plan No Matter What Happens

February 20, 2003
Daniel Beighley

Bears
maintained their hold on market action, as the major indexes held
downtrends for the session. Bad news on Dow components SBC Communications and
Boeing did their part to tilt the selling bias, as well as disappointments in
key economic data. On a positive note, the semis put in a good session. Volume
was once again on the light side, as many feel the situation with Iraq controls
the market’s destiny. This is a trying time for traders, though having a solid
plan to execute no matter what the situation will go a long way. For those
interested, TM’s Ed
Allen has just laid out a blueprint.

In economic news, initial
claims came in at 402K vs. expectations of 385K, PPI came in at 1.6%
vs. expectations of 0.3%, core PPI came in at 0.9% vs. expectations of
0.1%, the trade balance showed a deficit of $44.2B vs. expectations of a
deficit of $38.6B, leading indicators came were down 0.1% vs. an expected
no change status, and the Philadelphia Fed disappointed with a reading of
2.3 vs. expectations of 11.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was +100 at 115 225.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was -0.53 at 99.65.

Volume was well below
average, with the NYSE coming in at 1,149,160,000
and the Nasdaq at 1,325,952,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.13, and down
volume over up volume by a 1.95 ratio. Nasdaq declining issues over advancing
issues came in at 1.01, and down volume beat up volume by a 1.06 ratio.

The
VIX
was +0.45 at 35.67. The TRIN
was +0.31 at 1.71.

Biggest Dow losers were:

Stocks in the news:

The Dow was weighed down by SBC
Communications
(
SBC |
Quote |
Chart |
News |
PowerRating), -7.51% at 21.30, after the FCC voted to to not
grant the Baby Bells the ability to give cheap network usage to its competitors.

Also in the Dow, Boeing
(
BA |
Quote |
Chart |
News |
PowerRating), -3.34% at 29.17, was under pressure after JP Morgan said earnings
estimates may come down given the potential liquidation of its UAL.Â

Discount retailer Target
(
TGT |
Quote |
Chart |
News |
PowerRating), -3.94% at 26.77, announced fourth-quarter earnings in-line with
expectations with profits of $0.75 per share. The company also reaffirmed its
forecast for 2003.

Auto maker DaimlerChrysler
(
DCX |
Quote |
Chart |
News |
PowerRating),
-0.90% at 29.63, guided higher for 2003 after posting solid profits for 2002.

Network company Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating), +-1.99% at 5.41,
beat its earnings estimates by $0.03 with a loss ofÂ $0.11 per share.

Restaurant company CBRL Group
(
CBRL |
Quote |
Chart |
News |
PowerRating), -8.66% at
25.10, guided lower for its third-quarter with expectations of $0.40-0.41 per
share vs. previous expectations of $0.44 per share.

In the biotech sector Cephalon
(
CEPH |
Quote |
Chart |
News |
PowerRating), -5.22%
at 49.00, guided lower for the first-quarter despite beating its fourth-quarter
estimates by $0.05 wit profits of $0.41 per share. The stock has also been
downgraded by Lehman to “equal-weight” from “overweight”.

Also in the biotech sector, Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating),
-8.38% at 34.96, sold off after it was announced European approval for its drug
Amevive has been delayed.

Retailer JC Penney
(
JCP |
Quote |
Chart |
News |
PowerRating), +7.27% at 19.77, beat
its fourth-quarter earnings estimates by $0.02 with profits of $0.68 per share.

Medical equipment maker Guidant
(
GDT |
Quote |
Chart |
News |
PowerRating), +3.77% at
35.75, was upgraded by Morgan Stanley to “overweight” from
“equal-weight”.

danielb@tradingmarkets.com

A Solid Plan No Matter What Happens

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources