Have The Markets Priced In Greenspan’s Comments?

May 21, 2003
Vincent Mao

Stocks
are slightly lower this midday. The major indices have been in a
seesaw battle for most of the day. News of the heightened terror alert, mad cow
disease, and electronics giant Philips’
(
PHG |
Quote |
Chart |
News |
PowerRating) warning all weighed down the
market. Hewlett-Packard’s
(
HPQ |
Quote |
Chart |
News |
PowerRating) better than expected results failed to
inspire tech buyers. Meanwhile tobacco stocks, including
(
RJR |
Quote |
Chart |
News |
PowerRating),
(
CG |
Quote |
Chart |
News |
PowerRating),
(
MO |
Quote |
Chart |
News |
PowerRating) and Loews
(
LTR |
Quote |
Chart |
News |
PowerRating) are all up between 6% and 8% after a Florida court
reversed a $145 million judgment against the major tobacco companies. However,
most of today’s focus has been on Fed Chairman Alan Greenspan’s testimony to the
Joint Economic Committee. Overall, Greenspan’s remarks were cautiously
optimistic as he commented that “the consensus expectation for a pick up in
economic activity is not unreasonable, though the timing and extent of that
improvement continues to be uncertain.” The dollar is again weaker, while bonds
continue to make way in their three-week rally.

The 10-year U.S. Note
is +35 at 118 270.

The dollar is +0.30 at
93.43.

Gold is +2.90 at 369.40.

Crude OilÂ +1.10 at
29.51.

Volume is at 681,000,000
on the NYSE, and at 846,000,000 on the Nasdaq.

Market breadth is mixed,
with NYSE declining issues over advancing issues by a ratio of 1.03, and up
volume over down volume by a 1.18 ratio. Nasdaq declining issues over advancing
issues at 1.02, and down volume over up volume is at a 1.66 ratio.

Top Dow stocks are:

Stocks in the news:

Deutsche Bank downgraded
networking giantÂ Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) to “hold” from “buy” based on
valuation concerns. Deutsche Bank commented that Cisco’s growth is limited by a
lack of IT spending and the general economic environment.Â

General Electric Systems, a
unit of General Electric
(
GE |
Quote |
Chart |
News |
PowerRating), won a $50 million contract for a
Brazilian electric power transmission project.Â

Hewlett-Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating) is trading higher by 6.9% on heavy volume. Late yesterday, the company
reported second quarter results that beat estimates by 2 cents on a pro forma
basis. Revenues which came in at almost $18 billion also topped estimates of
$17.7 billion. However, the company also announced job cuts as CEO Carly Fiorina
said that she does not see an improvement in IT spending.Â

Polo Ralph Lauren
(
RL |
Quote |
Chart |
News |
PowerRating) reported fourth quarter results, excluding restricting charges, in line
with estimates. The company also announced a quarterly dividend of $0.05 a share
and reaffirmed full-year results between $1.95 to $2.05 a share.Â

Talbots
(
TLB |
Quote |
Chart |
News |
PowerRating)
reported first quarter results down 10.5% from year ago levels, but a penny
better than estimates. The company reported earnings of 51 cents a share in the
latest quarter as same stores sales fell 4.3%.Â Â

vincentm@tradingmarkets.com

Have The Markets Priced In Greenspan’s Comments?

BUY THE FEAR, SELL THE GREED

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