And Now For A Real Test Of Strength

January 10, 2003
Daniel Beighley

The
markets closed slightly higher on the session, after disappointing
employment data had stocks opening lower, then immediately rebounding. Price
action hit its intraday high around 11:00 am ET, then slowly worked its way
south with an afternoon rally attempt. It’s aÂ good sign for the bulls when bad
news is shaken off, though it would have been a stronger indication with a
better close. The major indexes are once again up against their daily trend
lines, with the Dow and S&P under their 200-day averages, and the Nasdaq just
above this mark.

In economic news, nonfarm
payrolls fell 101K vs. expectations of a 20K increase, the unemployment
rate came in at an expected 6% rate, hourly earnings were at an
expected 0.3% rate, and the average workweek was at 34.1 vs. an expected
34.2.Â

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was -010 at 112 180.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) wasÂ -0.73 at 101.56.

Volume was slightly
above average, with the NYSE coming in at 1,455,255,000 and the Nasdaq at
1,652,283,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.06, and up
volume over down volume by a 1.36 ratio. Nasdaq advancing issues over declining
issues came in at 1.20, and up volume beat down volume by a 3.00 ratio.

The

VIX was +0.07 at 26.95. The

TRIN was +0.33 at 0.76.

Leading the Dow higher were:

Stocks in the news:

Computer printer maker
Lexmark International
(
LXK |
Quote |
Chart |
News |
PowerRating), -6.03% at 62.26, has raised its
fourth-quarter earnings guidance to $0.85-0.87 per share vs. previous guidance
of $0.70-0.80 per share.

Restaurant company Cheesecake Factory
(
CAKE |
Quote |
Chart |
News |
PowerRating),Â -6.97% at 33.86, has lowered its fourth-quarter revenue guidance
to $174.4 million vs. a consensus of $179.3 million.

In the chip business,
Advanced Micro
(
AMD |
Quote |
Chart |
News |
PowerRating), +7.23% at 7.41, has been upgraded by UBS Warburg
to “hold” from “reduce.”

Drug maker Schering-Plough
(
SGP |
Quote |
Chart |
News |
PowerRating), -0.43% at 22.96, has lowered its fourth-quarter earnings guidance to
$0.27-0.29 vs. a consensus of $0.44.

Electric utilities company PPL Corp.

(
PPL |
Quote |
Chart |
News |
PowerRating), +0.31% at 37.70, has been upgraded by Bank of
America to “buy” from “market perform.”

From the retail sector,
Abercrombie and Fitch
(
ANF |
Quote |
Chart |
News |
PowerRating), +1.38% at 26.39, has been upgraded by CSFB
to “outperform” from “neutral.”

Also in the retail sector, JC Penney
(
JCP |
Quote |
Chart |
News |
PowerRating), -3.98% at 23.60, said it will take a charge of 10 cents per share as
it eliminates 2,000 jobs.

Money center band FleetBoston
(
FBF |
Quote |
Chart |
News |
PowerRating),
-0.36% at 27.40, sold off after the company lowered its earnings guidance.Â

Conglomerate United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), -0.95% at 64.32, announced that it will contribute $500 million to
their pension fund.

Auto maker Ford Motor
(
F |
Quote |
Chart |
News |
PowerRating),
+2.63% at 10.50, said that it will post a small profit for 2002 vs. a large loss
made the previous year.

From
TM’s Momentum List, communications equipment maker Safenet Inc.
(
SFNT |
Quote |
Chart |
News |
PowerRating),
+9.90% at 30.50.

danielb@tradingmarkets.com

And Now For A Real Test Of Strength

BUY THE FEAR, SELL THE GREED

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