Can The Markets Shrug Off The Retail News?

May 14, 2003
Vincent Mao

Stocks
are lower once again this midday.Â Mixed retail sales results and a
cautious outlook from Applied Materials dragged down the major indices. Stocks
opened higher but soon sold off. However the major indices are off the lows of
the day. Most of the selling is in semiconductors, retail, and computer
hardware. However biotechs and networking issues are higher today. The FDA
approved Millennium Pharmaceutical’s anticancer drug, Velcade, and Juniper
benefited from an upgrade from Smith Barney. Bonds are once again higher on the
retail sales report.Â

In economic news, the Retail
Sales for April fell by 0.1% versus an expected rise of 0.4%. Excluding
autos sales were down 0.9% versus an expected gain of 0.2%. However stripping
out sales of gasoline, retail sales came in inline with expectations. Import
prices in April fell 2.7%.Â

The 10-year U.S. Note
is +105 at 117 125.

The dollar is -0.13 at
94.75

Gold is +4.30 at 354.60

Crude OilÂ -0.220 at
28.26

Volume is 679,000,000 on
the NYSE, and at 1,000,000,000 on the Nasdaq.

Market breadth is mixed,
with NYSE declining issues over advancing issues by a ratio of 1.01, and up
volume over down volume by a 1.08 ratio. Nasdaq declining issues over declining
issues is flat, and up volume over downÂ volume is at a 1.72 ratio.

Top Dow stocks are:

Stocks in the news:

Semiconductor equipment maker
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) reported second quarter results excluding
charges of 2 cents a share or a penny above estimates. Including charges, the
company lost 4 cents a share on revenues of $1.11 billion whereas Applied
Materials earned 3 cents a share on revenues of $1.16 billion. Going forward,
the company expects third quarter revenues to be flat or slightly above its
second quarter revenues of $1.11 billion.Â

Apparel retailer Abercrombie
& Fitch
(
ANF |
Quote |
Chart |
News |
PowerRating) is off more than 6.5% on heavy volume. The company
reported first quarter results of 26 cents a share or inline with estimates.
However the company said that second quarter results would come in between 30 to
34 cents a share or slightly below estimates of 35 cents a share.Â Â

Hovnanian
(
HOV |
Quote |
Chart |
News |
PowerRating) is
off almost 3% on heavy volume. The homebuilder was downgraded by CS First Boston
to “underperfrom” form “neutral” due to valuation concerns.Â

J2 Communications
(
JCOM |
Quote |
Chart |
News |
PowerRating)
is on fire today as the shares are up 19.5% on triple its average volume. The
company reported that its Internet faxing and other subscription service will be
integrated in the 2003 edition of Microsoft Office.

Payless Shoesource
(
PSS |
Quote |
Chart |
News |
PowerRating)
is down almost 4% on heavy volume. The company posted first quarter results of
21 cents a share or inline with estimates. During the same period a year ago,
the company earned 35 cents a share. Payless did warn that second quarter
results would likely come in between 40 to 50 cents a share or below estimates
of 62 cents a share.Â

Tiffany’s
(
TIF |
Quote |
Chart |
News |
PowerRating)
jumped 11% on heavy volume. The company posted first quarter results of 24 cents
a share or a penny better than estimates. Tiffany also reaffirmed full year
results between $1.34 to $1.38 a share or within estimates of $1.34 a share.

vincentm@tradingmarkets.com

Can The Markets Shrug Off The Retail News?

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