How Will This Indecision Play Out?

The
major averages are mixed midday,
as geopolitical tension is once
again the dominant theme. In economic news, the productivity number disappointed
with its worst number since the first-quarter of 2001. The Dow and S&P have
dropped below ranges established in the last couple of weeks, while the Nasdaq
attempts to show some resilience as it trades slightly positive. The bellwether
Semiconductor Index is extending its tight range in a sign of indecision.

The Dow Jones Industrial
Average

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$INDU.X |
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is -0.50% at 7,945.07. The S&P 500
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$SPX.X |
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is -0.45% at 839.77. The Nasdaq
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is +0.24% at 1,304.66.

Leading are airlines
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$XAL.X |
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,
+2.02%, Internet
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$GIN.X |
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, +1.98%, and telecoms
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$IXTC.X |
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,
+1.33%.

Big losers are insurance
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$IUX.X |
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, -2.00%, oil
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$OIX |
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, -1.74%, and broker/dealers
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$XBD.X |
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, -1.22%.

In economic news, initial jobless claims
came in at 391K vs. expectations of 380K and the productivity preliminary
number
came in at -0.2% at 0.7%.

The 10-year U.S. Note
is +130 at 114 105.

The Dollar is -0.25 at
99.65.

Gold is -3.40 at 373.00.

Crude Oil  +0.35 at
34.28.

Volume is at 683,123,000
on the NYSE, and at 645,715,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 1.52, and down
volume over up volume by a 2.69 ratio. Nasdaq declining issues over advancing
issues are at 1.27, and down volume is over up volume by a 6.99 ratio.

Biggest Dow losers are:

AT&T
(
T |
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, -2.89% at 17.83, Alcoa
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AA |
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,
-2.37% at 19.37, American Express
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AXP |
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, -2.45% at 33.80, JP
Morgan

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, -1.87% at 22.51, Exxon Mobil
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XOM |
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, -1.82% at
33.51, Eastman Kodak
(
EK |
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, -1.76% at 30.71.

Stocks In The News:

Telecom gear maker Ericsson
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ERICY |
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,
+8.33% at 7.28, announced an new CEO in what hopes to be a new start for the
struggling company.

Retail stocks turned in same store sales today,
with Gap
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, +5.01% at 15.73, easily toping analysts predictions
with a 16% increase from a year ago, Wal-Mart
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, +1.01% at 47.21,
posted a 2.3% rise from a year ago, and Kohl’s
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, +2.34% at
52.96, reported a 5.5% boost.

Fuel cell stocks are fired up ahead of President
Bush’s 1:40 pm ET speech on energy independence, with Ballard Power
(
BLDP |
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,
+6.89% at 10.55, and Plug Power
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PLUG |
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, +18.12% at 5.67.

Oil company ConocoPhillips
(
COP |
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,
-1.13% at 48.85, has been upgraded by JP Morgan to “overweight” from “neutral.”

Electric utilities company TXU Corp.
(
TXU |
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,
-4.52% at 17.13, has been downgraded by Morgan Stanley to “equal-weight” from
“overweight.”

Communications services company j2 Global
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JCOM |
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, +5.31% at 22.59, has beat its fourth-quarter earnings expectations
by $0.03 with profits of $0.38 per share.

Online travel company
Expedia

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EXPE |
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, +5.76% at 62.45, has beat its fourth-quarter earnings
expectations by $0.07 with profits of $0.48 per share. The company has also
raised its guidance for the year.

Testing equipment maker
Agilent

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A |
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, -2.37% at 19.37, has said it will likely take a first-quarter
loss for twice as much as initially anticipated, as customers are buying less.

Beverage giant PepsiCo’s
(
PEP |
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, -0.80% at 40.75, posted profits inline with expectations at $0.50 per
share

Retailer Michaels Stores
(
MIK |
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, -18.18% at 26.87, has warned that it expects to earn less for the
full year due to unusually cold weather. The company now estimates earnings per
share to come in between $2.05-$2.10 vs. previous expectations of $2.11.

Insurance company Allstate
(
ALL |
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, -6.46% at 32.17, has beat its fourth-quarter earnings estimates by
$0.12 with profits of $0.89 per share.

Also in the insurance sector,
Unumprovident
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UNM |
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, -8.16% at 15.64, has been downgraded by CSFB to
“underperform” from “neutral.”

Biotechnology company
Cephalon

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CEPH |
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, +4.74% at 50.39, has been upgraded by JP Morgan to
“overweight” from “neutral.”

Healthcare facilities company
Coventry Health Care
(
CVH |
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, +4.49% at 26.53, has been upgraded by
Salomon Smith Barney to “outperform” from “in-line.”

danielb@tradingmarkets.com