Here Is What The Market Is Telling You

Buyers
didn’t let bad employment news stop them
this morning, as the major
indexes rallied sharply off a lower open. The nonfarm payrolls dropped 101K vs.
an expected increase of 20K, creating an emotional open that was instantly
faded. The markets speak very clearly when they reject news, though the day is
far from over, and the bulls will need to see a strong close to maintain the
momentum.

The Dow Jones Industrial
Average

(
$INDU.X |
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is –0.39% at 8,742.24 The S&P 500
(
$SPX.X |
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is -0.27% at 925.11. The Nasdaq
(
$COMPQ |
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is +0.17% at 1,440.97.

Leading to the upside are
networking

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$NWX.X |
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, +4.69%, gold and silver
(
$XAU.X |
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,
+1.89%, and semiconductors
(
$SOX.X |
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, +1.63%.

The day’s laggards are
semiconductors

(
$SOX.X |
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, -2.23%, computer hardware
(
$HWI.X |
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,
-1.91%, and computer hardware
(
$GHA.X |
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, -1.11%.

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. 

The 10-year U.S. Note
is +030 at 112 220.

The Dollar is -0.47 at
101.82.

Gold is +1.70 at 355.40.

Crude Oil is +0.60 at
32.05.

Volume is at 780,907,000
on the NYSE, and at 961,567,000 on the Nasdaq.

Market breadth is mostly
positive
, with NYSE advancing issues over declining issues by a ratio of
1.00, and up volume over down volume by a 1.19 ratio. Nasdaq declining issues
over advancing issues are at 1.02, and up volume over down volume is at a 1.90
ratio.

Top Dow gainers are:

Intel Corp.
(
INTC |
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,
+1.41% at 17.30, International Paper
(
IP |
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, +1.42% at 37.06, Hewlett
Packard

(
HPQ |
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, +1.32% at 20.75, Walt Disney
(
DIS |
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, +1.22% at
18.30, , Alcoa
(
AA |
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, +1.20% at 22.77, Coca-Cola
(
KO |
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, +1.15%
at 45.04 and Johnson and Johnson
(
JNJ |
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, +0.53% at 57.15.

Stocks in the news:

Computer printer maker
Lexmark International

(
LXK |
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, -6.14% at 62.19, 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 |
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,  -6.46% at 34.05, has lowered its fourth-quarter revenue guidance
to $174.4 million vs. a consensus of $179.3 million.

UBS Warburg has taken a swing
at healthcare stocks as it downgrades Community Health
(
CYH |
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, -6.76%
at 17.38, and LifePoint Hospitals
(
LPNT |
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, -9.85% at 23.89, to “buy”
from “strong buy,” and Triad Hospitals
(
TRI |
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, -8.85% at 26.25, to
“reduce” from “buy.”

In the chip business,
Advanced Micro

(
AMD |
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, +2.46% at 7.08, has been upgraded by UBS Warburg
to “hold” from “reduce.”

Drug maker Schering-Plough
(
SGP |
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PowerRating)
, -3.07% at 22.35, has lowered its fourth-quarter earnings guidance to
$0.27-0.29 vs. a consensus of $0.44.

Electric utilities company PPL Corp.

(
PPL |
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, +0.67% at 37.83, has been upgraded by Bank of America to
“buy” from “market perform.”

From the retail sector,
Abercrombie and Fitch

(
ANF |
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, +1.88% at 26.51, has been upgraded by CSFB
to “outperform” from “neutral.”

Also in the retail sector, JC Penney
(
JCP |
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, -5.17% at 23.31, said it will take a charge of 10 cents per share as
it eliminates 2,000 jobs.

Money center band FleetBoston
(
FBF |
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,
-1.35% at 27.13, sold off after the company lowered its earnings guidance. 

Conglomerate United Technologies
(
UTX |
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, -1.74% at 63.81, announced that it will contribute $500 million to
their pension fund.

From
TM’s Momentum List, communications equipment maker Safenet Inc.
(
SFNT |
Quote |
Chart |
News |
PowerRating)
,
+7.42% at 29.81.

danielb@tradingmarkets.com