Here’s The Story Behind The Huge Sell Off This Morning

July 3, 2003
Vincent Mao

Stocks
ended this pre Fourth of July trading day on a negative note and gave back much
of yesterday’s gains.Â This pre-holiday shortened trading day was
anything but quiet. The major indices had a rough time from the get-go after the
release of the latest job market data. Both jobless claims and the unemployment
rate came in worse than expected. Warnings from Siebel Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating),
WebMethods
(
WEBM |
Quote |
Chart |
News |
PowerRating), Adaptec
(
ADPT |
Quote |
Chart |
News |
PowerRating), and Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating)
also weighed on the market. In addition an erroneous order to sell 2,000 instead
of an intended 200 S&P futures contracts also added to today’s volatility.
Stocks did managed to stage a turnaround after the release of the ISM services
index. However the turnaround was short-lived as stocks ended the day near the
lows of the session. Bonds once again sold off and are at a six-week low.Â

In economic news, Average
Workweek in June came in at 33.7 vs. estimates of 33.8. Hourly Earnings
in June rose 0.2% as expected. Initial jobless claims for the week ended
6/28/2003 came in at 430K (an increase of 21K) compared to estimates of
412K. This was the 20th straight week that claims have been above the critical
400K level. On a positive note, the four-week moving average decreased by 4,500
to 425,000. Nonfarm payrolls fell by 30K compared to an expected flat
reading. The Unemployment Rate for June rose to a 9-year high of
6.4% compared to estimates of 6.2%. Lastly, the ISM Services Index for June
came in much better than expected at 60.6 vs. estimates of 55.0.Â Â

The 10-year U.S. Note
isÂ -230 at 116 225.

The dollar is +0.35 at
94.75.

Gold is – 0.30 at
351.30.

Crude Oil +0.27 at
30.42.

Volume is at 738,000,000
on the NYSE, and at 963,000,000 on the Nasdaq.

Market breadth is negative
on the NYSE and on the Nasdaq, with NYSE declining issues over advancing
issues by a ratio of 1.50, and up volume over down volume by a 3.15 ratio.
Nasdaq advancing issues over declining issues at 1.33, and up volume over down
volume is at a 1.74 ratio.

Top Dow stocks are:

Stocks in the news:

Knight Trading
(
NITE |
Quote |
Chart |
News |
PowerRating)
is trading higher by 22% on very heavy volume after the company raised its
second-quarter estimates. The market making firm now sees results of 10 to 15
cents a share compared to previous estimates of 2 to 5 cents a share. Knight
cited increased trading volume and company costs cutting helped its bottom
line.Â Â

Select Comfort
(
SCSS |
Quote |
Chart |
News |
PowerRating)
is higher by 16% after the company upped its second-quarter estimates. Thanks to
a 34% increase in same-store sales, the company now sees results coming in at 11
to 12 cents, up from its previous forecast of 7 or 8 cents a share. Consensus
estimates had been calling for 8 cents a share.Â Â

Adaptec
(
ADPT |
Quote |
Chart |
News |
PowerRating) is
lower by 10% on heavy volume after the company warned that first-quarter
revenues would be below previous forecasts. Due to weak economic conditions, the
data storage company the company now sees sales of $107 million compared to
previous estimates of $115 to $120 million. However the firm still expects
earnings between 3 and 4 cents a share.Â

Documentum
(
DCTM |
Quote |
Chart |
News |
PowerRating)
is lower by 18% after the company warned that second quarter sales would be
below its previous forecasts. The company now sees second-quarter revenues of
$68 million compared to its previous forecasts of $72 to $73 million. The
business software maker cited delays in government spending and weakness in Asia
for the shortfall.Â Â

Micrel
(
MCRL |
Quote |
Chart |
News |
PowerRating) is
trading lower by 5.6% on heavy volume after the company issued a second quarter
revenue warning. Due to a weak Asian cell phone market, the company now sees
revenues of $51 million compared to analysts’ estimates of $53.1 million.Â Â

Siebel Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating)
is trading higher by 2.5% despite announcing that second-quarter results would
be below previous estimates. Due to delays in customer’s purchasing decisions
and weak economic environment, the enterprise software maker now sees revenues
between $330 and $334 million compared to Street estimates of $347 million.
Siebel also sees earnings coming in at 2 cents a share or a penny below
analysts’ estimates. Â Â

Please feel free to email us your comments
or questions. Happy Fourth!

Vincent Mao

Here’s The Story Behind The Huge Sell Off This Morning

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources