Here’s What’s En Vogue

The markets underwent another
round of selling pressure, as a broad-based decline sent the Dow and S&P beneath
their three-month trading ranges. Price action for the session held a downtrend
from bell to bell. Defensive issues were en vogue today, as Gold
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hit
a five-year high, and bonds put in another session higher. World tensions now
dominate the headlines, with Iraq, North Korea and Venezuela all considered
potential flashpoints. Volume on the session came in slightly below average,
giving today’s move less conviction.

The Dow Jones Industrial
Average

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closed -2.48% at 8,131.01. The S&P 500
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closed -2.92% at 861.40. The Nasdaq
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closed -3.32% at 1,342.15.

The only positive sector on the
session was gold and silver
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, +2.32%.

Leading the action down was
insurance

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, -5.23%, semiconductors
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,
-4.96%, Internet
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, -4.25%, and software
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, -4.14%.

There were no economic releases
for the day.

The Ten Year Note
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was +105 at 114 220.

The U.S. Dollar
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was -0.71 at 99.45.

Volume was slightly
below average
, with the NYSE coming in at 1,500,459,000

and the Nasdaq at 1,569,021,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 2.89, and down
volume over up volume by a 4.97 ratio. Nasdaq declining issues over advancing
issues came in at 2.63, and down volume beat up volume by a 6.85 ratio.

The

VIX
was +4.80 at 35.77. The

TRIN
was +0.90 at 1.73.

Leading the Dow down were:

JP Morgan
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, -5.25% at 23.81, Intel Corp.
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, -4.91% at 15.85, Microsoft
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, -4.65% at 49.85,
Alcoa

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, -4.56% at 20.71, American Express
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,
-4.45% at 33.70, and Honeywell
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, -4.42% at 23.57.

Stocks in the news:

Communications equipment maker Nortel Networks
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, +7.50% at 2.58, beat its earnings estimates as it recorded a smaller
fourth-quarter loss than expected.

Electric utilities company CMS Energy
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, -28.92% at 6.07, announced that it plans to eliminate its dividend
payments as it posts bigger than expected losses for the quarter.

Insurance stocks were under pressure as Morgan
Stanley downgraded the sector to “in-line” from “attractive.” From the sector,
AIG
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, -8.02% at 56.04, and Marsh & McLennan
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,
-5.36% at 42.15.

Doughnut retailer Krispy Kreme
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,
-8.75% at 30.75, announced that it will buy bakery chain Montana Mills Bread for
$4.4 million.

Coffee retailer Starbucks
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,
+14.63% at 22.95, beat its first-quarter earnings expectations by $0.02 with
profits of $0.20 per share. The company was also upgraded by CIBC World Markets
to “sector outperform” from “sector perform.”

Medical equipment and supplies company Varian
Medical

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, +2.46% at 51.10, beat its first-quarter earnings
expectations by $0.06 with profits of $0.30 per share.

Electric utilities company American Electric
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, -4.61% at 25.65, missed its fourth-quarter earnings expectations by
$0.03 with profits of $0.52 per share.

Printer maker Lexmark
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, -0.88% at
60.30, has been upgraded by Merrill Lynch to “buy” from “neutral.”

Online retailer Amazon.com
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, +1.51% at 22.12, beat its fourth-quarter earnings expectations by
$0.05 with profits of $0.19 per share.

Despite reporting its first
quarterly loss in its history, restaurant company and Dow component McDonalds
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, -0.66% at 14.90, was upgraded by Goldman Sachs to “in-line” from
“underperform.”

In the defense contractor
business, Raytheon
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, +5.63% at 30.16, missed its earnings
expectations by $0.01 with profits of $0.64 per share. And Lockheed
Martin

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, -2.63% at 50.90, beat its expectations by $0.04 with
profits of $0.85 per share, though they guided the full-year 2003 lower.

In the chip business,
KLA-Tencor

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, -5.35% at 34.46, beat its second-quarter earnings
expectations by $0.01 with profits of $0.15 per share, but has been downgraded
to “hold” from “buy” by Prudential. Genesis Microchip
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, -5.01%
at 15.73, beat its third-quarter earnings by $0.02 with profits of $0.09.
Lattice Semiconductor

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, -6.36% at 8.38, reported earnings in line
with expectations with profits of $0.06 per share. And Flextronics
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, +0.12% at 8.18, beat its third-quarter earnings expectations by
$0.02 with profits of $0.13.

Also in the sector, Broadcom
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, -14.19% at 14.95, has been downgraded by Merrill Lynch to “sell.”
The company’s CEO also stepped down.

Homebuilder Beazer Homes
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, -2.48% at 60.80, beat its first-quarter earnings expectations by
$0.08 with profits of $2.75 per share.

Retailer Dollar Tree
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, -9.74% at 22.70, missed its fourth-quarter earnings
expectations by $0.01 with profits of $0.76 per share.

danielb@tradingmarkets.com