A Test For The Bulls

February 13, 2003
Daniel Beighley

After
spending most of the session in deep negative territory, the major
indexes staged powerful afternoon rallies that brought them to close with slight
losses. The bellwether semiconductors and broker/dealers posted slight gains on
the session. The buying at this juncture has been attributed to short covering
as market conditions were at oversold conditions. The sentiment situation
remains unchanged, with pressing geopolitical concerns over Iraq and Korea. In
pre-market action slightly better than expected retail inspired no one. Price
action closed in a bullish hammer that will be tested with a Michigan sentiment
report among other key economic releases tomorrow.

In economic news, retail
sales were down 0.09% vs. expectations of a 0.6% loss, retail sales
ex-auto were up 1.3% vs. expectations of a 0.5% rise.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was +175 at 115 115.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was -1.01 at 99.72.

Volume was average,
with the NYSE coming in at 1,434,315,000 and
the Nasdaq at 1,312,237,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.44, and down
volume over up volume by a 1.83 ratio. Nasdaq declining issues over advancing
issues came in at 1.45, and down volume beat up volume by a 1.53 ratio.

The
VIX
was -0.65 at 38.45. The TRIN
was -0.63 at 1.27.

Top Dow gainers were:

Stocks in the news:

Standing out in the Dow’s action today, McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating),
-1.87% at 13.57, hit lows not seen since 1994. Yesterday the company reported
disappointing same store sales.

Computer hardware company Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating),
+1.98% at 16.95, is seeing some buying pressure as Merrill Lynch says it
believes the company will exceed its quarterly expectations.

Media company Fox Entertainment
(
FOX |
Quote |
Chart |
News |
PowerRating),
-2.71% at 25.80, has been upgraded by UBS Warburg to “buy” from
“neutral” after beating its second-quarter earnings by $0.04with
profits of $0.32 per share.

Grocery retailer Whole Foods Market Inc.
(
WFMI |
Quote |
Chart |
News |
PowerRating),
+8.31% at 49.62, has beat its first-quarter estimates by $0.01 with profits of
$0.41 per share.

Insurance company Lincoln National
(
LNC |
Quote |
Chart |
News |
PowerRating),
-3.58% at 27.69, has been downgraded by Salomon Smith Barney to
“in-line” from “outperform”.

Gold miner Barrick Gold
(
ABX |
Quote |
Chart |
News |
PowerRating), +4.01% at 16.33 has beat its fourth-quarter estimates by $0.04 with
profits of $0.13 per share.Â

In the retail sector, May
Department Stores
(
MAY |
Quote |
Chart |
News |
PowerRating), +0.47% at 19.15, has beat its fourth-quarter
earnings expectations by $0.08 with profits of $1.28 per share.

In the insurance sector, American
International Group
(
AIG |
Quote |
Chart |
News |
PowerRating), +3.16% at 47.97, has posted earnings $0.01
below expectations, though has guided higher for the full year 2003.

Medical equipment maker
Medtronic
(
MDT |
Quote |
Chart |
News |
PowerRating), -4.21% at 43.15,Â has been downgraded by Morgan
Stanley to “equal-weight” from “overweight” after the
company reported third-quarter earnings in-line with estimates.

Healthcare facilities company Express
Scripts
(
ESRX |
Quote |
Chart |
News |
PowerRating), -3.81% at 47.44, is down in the pre-market after
receiving a letter from the SEC concerning previous filings. The company has
also beat its fourth-quarter earnings by $0.01Â with profits of $0.72 per
share.

Chemical giant and Dow
component DuPont
(
DD |
Quote |
Chart |
News |
PowerRating), +3.13% at 37.18, has been upgraded by UBS
Warburg to “buy” from “neutral.”

danielb@tradingmarkets.com

A Test For The Bulls

BUY THE FEAR, SELL THE GREED

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