Here’s What’s More Important Than The Rate Cut

June 24, 2003
Vincent Mao

Stocks
are mixed this midday.Â After a volatile morning, blue chips are
outperforming tech issues. The Dow and S&P are slightly higher while the Nasdaq
in the red. A better-than-expected reading in consumer confidence failed to
inspire buyers as investors are waiting for the results of the two-day FOMC
meeting which will begin today. Though many expect the Fed to ease, the debate
continues on whether it will be a 1/4 or 1/2 point. However what’s more
important will be the Fed’s view of the economy and its possible actions. Tech
stocks are the biggest losers today after chip maker Advanced Micro Devices
lowered its second-quarter revenue targets due to SARS. Soundview’s downgrade of
Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) also dragged down tech stocks. Bonds are higher today
and are continuing to come out of its recent pullback. Gold fell to a six-week
low

In economic news, the Bank of
Tokyo-Mitsubishi/UBS retail chain store sales gained 0.6% last week. This was
the biggest gain in seven weeks. Consumer confidence in June slipped to 83.5
from last month’s revised 83.6. Economists were looking for a reading of 82.4.
Â Â

The 10-year U.S. Note
isÂ +080 at 119 045.

The dollar is +0.53 at
95.00.

Gold is -5.90 at 347.50.

Crude OilÂ -0.39 at
28.79.

Volume is light this
midday at 672,000,000 on the NYSE, and at 836,000,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 1.05, and down
volume over up volume by a 1.08 ratio. Nasdaq declining issues over advancing
issues at 1.15, and down volume over up volume is at a 1.77 ratio.

Top Dow stocks are:

Stocks in the news:

American Greetings
(
AM |
Quote |
Chart |
News |
PowerRating)
is higher by 3.5% after reporting better-than-expected first-quarter results.
The greeting card maker reported earnings of 27 cents a share or 2 cents better
than analysts estimates. However the results were down from 60 cents a share for
the same period a year ago. The company is projecting a loss of 13 to 18 cents
next quarter.Â Â

Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating)
is fractionally higher after Merrill Lynch upgraded the stock from “sell” to
“neutral”. Late yesterday Apple unveiled its new G5 PowerMacs which Merrill
feels will help Apple’s sales when it ships in August.

Kroger
(
KR |
Quote |
Chart |
News |
PowerRating) is higher
by 2.60 after the company reported first-quarter results of 46 cents a share
compared to 40 cents a share during the same period a year ago. Results topped
estimates by a penny. Looking ahead, the company sees full year results between
$1.55 and $1.63 compared to estimates of $1.62 a share.Â Â

Netflix
(
NFLX |
Quote |
Chart |
News |
PowerRating) is
higher by 5.3% on very heavy volume. The shares jumped after the U.S. Patent &
Trademark Office granted the company a patent for its online DVD rental
service.Â

Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating)
is lower by 2.3% after Soundview downgraded the stock from “outperform” to
“neutral”. Soundview based the downgrade on valuation and the lack of evidence
that business has improved. Â Â

Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating)
is offÂ 6% after the company warned that second-quarter revenues will fall short
of estimates. The company now expects revenues of $615 million down from
previous estimates of $715 million. Advanced Micro said that weak sale in China
due to the SARS epidemic negatively impacted sales.Â Â

Pediatrix Med Group
(
PDX |
Quote |
Chart |
News |
PowerRating)
is off 23% on very heavy volume. The company announced that the US Attorney’s
Office is investigating its billing practices.Â Â

vincentm@tradingmarkets.com

Here’s What’s More Important Than The Rate Cut

BUY THE FEAR, SELL THE GREED

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