If You’re Trading The Fed Today, Remember This…

August 12, 2003
Vincent Mao

Stocks are
slightly higher this midday.Â The major
indices are relatively flat to slightly higher ahead of the Fed’s decision on
interest rates. Economists are expecting the Fed to leave the Fed Funds rates
unchanged at the 45-year low of 1%. More importantly, traders are looking for
the Fed to comment positively on the accelerating economic growth. The Nasdaq is
rebounding for the second straight session. Strong performance by biotech,
Internet, and networking issues are helping to boost the index. The next
resistance for the Nasdaq is just up ahead at its 50-day moving average at
1676.54. Meanwhile, both the Dow and S&P are under-performing today with both
indices still contained by yesterday’s range. We should get a better indication
after 2:15 pm ET. However, wait for the second reaction to get a better read on
the market’s likely direction. Bonds are slightly higher ahead of the
announcement.Â

In economic news, the Bank of
Tokyo-Mitsubishi and UBS Index climbed 0.1% last week thanks to back to school
sales.

The 10-year U.S. Note
is +055 at 112 080.

The dollar is +0.30 at
96.28.

Gold is -1.30 at 362.

Crude Oil +0.23 at
32.23.

Volume is 527,000,000 on
the NYSE, and 649,000,000 on the Nasdaq.

Market breadth is positive,
with NYSE advancing issues over declining issues by 1.51, and up volume over
down volume by 1.49. Nasdaq advancing issues over declining issues at 1.23, and
up volume over down volume at 1.38.

Top Dow stocks are:

Stocks in the news:

Consumer products maker
Clorox
(
CLX |
Quote |
Chart |
News |
PowerRating) is higher by 1.5% after the company reported fourth-quarter
results in line with estimates. In its latest quarter, Clorox earned 68 cents a
share compared to 63 cents a share in the year-ago quarter. Looking ahead, the
company sees first-quarter results between 57 to 62 cents a share and full-year
results between $2.47 to $2.57 a share. Analysts are forecasting first-quarter
results of $0.60 and full-year results of $2.50.Â

Watch and accessories maker
Fossil
(
FOSL |
Quote |
Chart |
News |
PowerRating) is higher by 5% after the company reported
better-than-expected second-quarter results. The company reported earnings of 21
cents a share compared to 20 cents in the year-ago period. Fossil’s results were
a penny better than consensus estimates. Revenues jumped 15.1% to $329.4. Going
forward, the company sees Q3 results between 32 to 34 cents a share or in range
of estimates of 33 cents a share.Â

Application software maker
Hyperion Solutions
(
HYSL |
Quote |
Chart |
News |
PowerRating) is higher by 3.5% after being upgraded from
“neutral” to “buy”. UBS upgraded the stock due to valuation basis and feels that
long-term growth prospects for the company remain healthy.

Maker of explosives detection
systems Invision Technologies
(
INVN |
Quote |
Chart |
News |
PowerRating) is higher by almost 11% after
the company received a $54.8 million order from the Transportation Security
Administration (TSA). The order calls for an unspecified number of Invision’s
CTX 900 DSi detection systems. It also grants the TSA rights to purchase up to
550 CTX units.

Retailer J.C. Penney
(
JCP |
Quote |
Chart |
News |
PowerRating)
is lower by 2% despite reporting a narrower-than-expected second-quarter loss.
In its latest quarter, the company lost 2 cents a share compared to a loss of 5
cents a share in the year-ago quarter. Analysts had predicted a loss of 5 centsÂ
a share. Looking ahead, the company sees Q3 and full-year results between 25 to
30 cents a share and $1.25 to $1.35 a share, respectively.

Zoran
(
ZRAN |
Quote |
Chart |
News |
PowerRating) is
lower by 5.5% after the lowered third- and fourth-quarter guidance. The maker of
integrated circuits now sees Q3 results between 19 to 23 cents a share and Q4
results between 16 to 22 cents a share. Analysts had expected Q3 and Q4 results
of 32 cents and 27 cents, respectively. The updated forecast now reflects
Zoran’s purchase of Oak Technology.Â

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

Vincent Mao

vincentm@tradingmarkets.com

If You’re Trading The Fed Today, Remember This…

BUY THE FEAR, SELL THE GREED

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