Are The Markets Up To This Test?

December 18, 2002
Daniel Beighley

The
markets were streaming red today, as bad news out of
Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating) and
Blockbuster
(
BBI |
Quote |
Chart |
News |
PowerRating) sent the major averages
to test under their 50-day moving averages. Intraday price action saw most of
the downside in the first half of the session, with a modest bounce mid-day that
turned to chop in the afternoon.

All eyes and ears are on
Oracle‘s
(
ORCL |
Quote |
Chart |
News |
PowerRating) earnings announcement
after the close, which could be a market mover. Standing out today,
Crude Oil
(
CLF3 |
Quote |
Chart |
News |
PowerRating) +0.25 at 30.35, made a
two-year high above $31 a barrel, over fears of an outbreak of war with Iraq.
This Friday will be a triple witching day (quadruple
witching if you count the new single stock futures), so volatility could pick up
in here.

In economic news, the trade
balance for October came in at -$35.1 billion vs. an expected loss of 36.6
billion.

The 10-year U.S. Note
was +175 at 112 315.

The Dollar was +0.10 at
104.10.

Volume was average,
with the NYSE coming in at 1,350,137,000 and the Nasdaq at 1,507,540,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.93, and down
volume over up volume by a 3.70 ratio. Nasdaq declining issues over advancing
issues came in at 2.36, and down volume beat up volume by a 6.04 ratio.

The

VIX was +1.59 at 31.75. The

TRIN was +0.38 at 1.90.

Leading the Dow lower:

Stocks in
the news:

Money center bank Bank of
New York
(
BK |
Quote |
Chart |
News |
PowerRating), -15.50% at 22.39, announced it will take a $390 million
provision and a $240 million charge for its fourth-quarter doe to aircraft
leases to United Airlines.

Home builder Lennar
(
LEN |
Quote |
Chart |
News |
PowerRating),
+0.30% at 52.51, announced that it expects to top forecasts for the
fourth-quarter, and raised its outlook for the next year.

Video game company
Activision
(
ATVI |
Quote |
Chart |
News |
PowerRating), -19.70% at 12.63, reduced its sales and profit
forecasts for 2003 and into 2004 as the company loses ground to competitors. The
stock is a member ofÂ TM’s Implosion List.

Investment services company
Bear Stearns
(
BSC |
Quote |
Chart |
News |
PowerRating), +0.97% at 62.45, beat its fourth-quarter
earnings expectations by $0.12 with profits of $0.12 per share.

Education company Apollo
Group
(
APOL |
Quote |
Chart |
News |
PowerRating), +6.70% at 43.58, beat its first-quarter earnings by $0.07
with profits $0.30.

Shipping company Federal
Express
(
FDX |
Quote |
Chart |
News |
PowerRating), -1.28% at 52.91, beat its second-quarter earnings
expectations by $0.02 with profits of $0.81 per share.

Food processing company
General Mills
(
GIS |
Quote |
Chart |
News |
PowerRating), +2.42% at 45.98, came in with better-than-expected
earnings for its fiscal second-quarter, and increased its outlook for the full
fiscal year.

Biotech and drug stock
MedImmune
(
MEDI |
Quote |
Chart |
News |
PowerRating), +10.84% at 27.70, shot up after it said an FDA panel
recommended approval for a nasal spray flu vaccine.

Are The Markets Up To This Test?

BUY THE FEAR, SELL THE GREED

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