Here’s What’s Needed To Keep The Rally Going

July 18, 2003
Vincent Mao

Stocks are
mixed this midday. After a three-day
pullback, both the Dow and S&P are slightly higher today while the Nasdaq is
fractionally lower. A mixed fourth quarter earnings report from Microsoft and a
better-than-expected consumer sentiment report are inspiring some buying today.
Dow component Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) missed its fourth quarter estimates by a
penny, but revenues were higher than expected. In addition, the company raised
its full year outlook. The University of Michigan Consumer Sentiment Index rose
for the third straight month and surpassed estimates. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) is
the top performing major index today as the Blue Chip index was boosted by an
upgrade in McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating) and continued strength in shares of Caterpillar.
Meanwhile the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) is the laggard today despite Microsoft’s
outlook and Ericsson’s
(
ERICY |
Quote |
Chart |
News |
PowerRating) narrower-than-expected loss. The Nasdaq
remains slightly below the 1,700 level. Past leading sectors such as Internet,
semiconductors, and healthcare are still lower today, we could see the rally
pick up steam once these sectors turn around. Bonds are again lower. The Dollar
is also lower, while gold is inching back up after hitting a two-month low on
Wednesday.Â

In economic news, the
University of Michigan Consumer Sentiment Index rose to 90.3 from 87.2 last
month. This topped estimates of a reading of 89.7. Â

The 10-year U.S. Note
is -045 at 114 170.

The dollar is -0.30 at
96.89.

Gold is +2.40 at 346.80.

Crude Oil +0.46 at
31.87.

Volume is 665,000,000 on
the NYSE, and 989,000,000 on the Nasdaq.

Market breadth is positive,
with NYSE advancing issues over declining issues by a 1.5, and up volume over
down volume by a 1.98. Nasdaq advancing issues over declining issues is at 1.03,
and up volume over down volume at 1.38.

Top Dow stock(s) are:

Stocks in the news:

Media and entertainment giant,
AOL Time Warner
(
AOL |
Quote |
Chart |
News |
PowerRating) is higher by 2.7% after the company announced
that it will sell it its CD and DVD manufacturing and distribution business to
Canada’s Cinram International for $1.05 billion in cash. The companies also have
entered an agreement in which Cinram would manufacture and distribute CDs and
DVDs for AOL.Â

Callaway Golf
(
ELY |
Quote |
Chart |
News |
PowerRating)
is higher by 6.8% after the company a decline in second quarter income, but
results did soar past estimates. The company reported earnings of 52 cents a
share, down from 55 cents last year. However Callaway easily topped consensus
estimates of 38 cents a share. The golf equipment maker also boosted third
quarter estimates to 95 cents a share from 88 cents a share.Â Â

Scientific Atlanta
(
SFA |
Quote |
Chart |
News |
PowerRating)
is trading higher by 12% after the company reported fourth quarter results that
easily topped estimates. The cable TV set top box maker reported earnings of 31
cents a share compared to a loss of 10 cents a share a year ago. The company
also beat estimates by a health 12 cents. However Deutsche Bank downgraded the
company from “hold” to “sell” due to valuation.Â

Zions Bancorp
(
ZION |
Quote |
Chart |
News |
PowerRating)
is higher by 3.68% on heavy volume after the company reported better than
expected second quarter earnings. Zions reported earnings of $1.02 a share
compared to 87 cents a year ago. The results also topped estimates by 4 cents.
Merrill Lynch also upgraded the company from “neutral” to “buy”.Â

Alcoholic beverage maker
Constellation Brands
(
STZ |
Quote |
Chart |
News |
PowerRating) is lower by 1% after the company said that
it expected second quarter results between 61 to 64 cents a share or below
consensus estimates of 65 cents a share.Â Â

Internet hardware equipment
maker Packeteer
(
PKTR |
Quote |
Chart |
News |
PowerRating) is lower by 17% on heavy volume despite
reporting second quarter results inline with estimates. The company earned 8
cents a share or up from just 2 cents a share a year ago.Â

Software giant Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) is fractionally higher today. Yesterday, the world’s largest
software maker reported earnings that missed estimates by a penny. The company’s
reported revenues of $8.07 billion did beat estimates of $7.88 billion. For its
full fiscal year, the company expects to earn between $1.09 to $1.11 (excluding
charges) compared to analysts’ estimates of $1.09.Â

If you have any comments or
questions, please feel free to email me.

Vincent Mao

vincentm@tradingmarkets.com

Here’s What’s Needed To Keep The Rally Going

BUY THE FEAR, SELL THE GREED

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