Is This Safe Haven Losing Its Luster?
The
bears followed through on yesterday’s selling, as the major indexes
were driven further below their 50-day moving averages. Price actionÂ
rallied in the first hour, though succumbed to a downtrend that lasted for the
rest of the session. Despite upside earnings surprises in the broker/dealers,
the sector sold off as the market failed to attract buyers.
Fears over conflict with Iraq
and tension in Venezuela dominated headlines, sending money to safety in the
form of Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating), +245 at 113 240, and Oil
(
CLH3 |
Quote |
Chart |
News |
PowerRating), +0.12 at 30.56. Gold
(
GCH3 |
Quote |
Chart |
News |
PowerRating), -0.50 at 346.00, showed
strength for most of the day, though sold off into the close. The US Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was -0.12 at 103.98. Tomorrow we data for the final GDP
number on the third-quarter.
Dow
Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed -0.97%
at 8,364.80. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
-0.76%
at 884.27. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed -0.53%
at 1,354.23.
The biggest gainers on the day
were transportation
(
$TRAN.X |
Quote |
Chart |
News |
PowerRating), +0.63%, and oil service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating),
+0.38%.
Leading to the downside were airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating), -3.79%, gold and silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), -3.41%, networking
(
$GIP.X |
Quote |
Chart |
News |
PowerRating), -2.66%, and computer hardware
(
$HWI.X |
Quote |
Chart |
News |
PowerRating), -2.13%.
In economic news, initial
claims came in at 433,000 vs. an expected 401,000, leading indicators
rose 0.7% vs. expectations of 0.6%, and the Philadelphia Fed was at 7.2
vs. an expected 5.0.
Volume was average,
with the NYSE coming in at 1,337,920,000 and the Nasdaq at 1,643,455,000.
Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.17, and down
volume over up volume by a 2.37 ratio. Nasdaq declining issues over advancing
issues came in at 1.20, and down volume beat up volume by a 1.63 ratio.
The
VIX
was +2.80 at 34.55. The TRIN
was +0.05 at 2.02.
Leading the Dow lower:
AT&T Corp.
(
T |
Quote |
Chart |
News |
PowerRating), -4.56% at 25.11, Eastman
Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), -3.28% at 35.95, JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), -2.79% at 23.33,
Du Pont
(
DD |
Quote |
Chart |
News |
PowerRating), -2.25% at 42.53, Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), -2.08% at
24.94, and Allied Capital
(
ALD |
Quote |
Chart |
News |
PowerRating), -2.01% at 21.40.
Stocks in the news:
Brokers have chimed in with
fourth-quarter earnings announcements, with Lehman Brothers
(
LEH |
Quote |
Chart |
News |
PowerRating),
-1.57% at 55.08, beating by $0.12 with profits of $1.00 per share, Morgan
Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating), -1.94% at 40.30, beating by $0.07 with profits of $0.81
per share, and Goldman Sachs
(
GS |
Quote |
Chart |
News |
PowerRating), -4.61% at 70.30, beating by $0.02
with profits of $0.98 per share.
Also in the broker business, Prudential
(
PRU |
Quote |
Chart |
News |
PowerRating), +0.06% at 32.02, has been upgraded by Lehman Brothers to
“overweight” from “underweight.”
Personal services company Cintas
Corporation
(
CTAS |
Quote |
Chart |
News |
PowerRating), +0.08% at 46.04, missed its second-quarter earnings
by $0.01 with profits of $0.37 per share.
Retailer Bed Bath &
Beyond
(
BBBY |
Quote |
Chart |
News |
PowerRating), -3.54% at 23.70, beat its third-quarter earnings
expectations by $0.02 with profits of $0.25 per share.
Tobacco company Phillip
Morris
(
MO |
Quote |
Chart |
News |
PowerRating), +0.12% at 40.74 received a favorable ruling from a
California Supreme Court judge who reduced a $28 billion jury award to a lung-cancer
victim to $28 million.
Defense stock General
Dynamics
(
GD |
Quote |
Chart |
News |
PowerRating), +2.20% at 79.85, announced that it will buy General
Motor’s
(
GM |
Quote |
Chart |
News |
PowerRating), -0.71% at 36.11, defense-related business for $1.1 billion
in cash.Â
In the software business, Veritas
Software
(
VRTS |
Quote |
Chart |
News |
PowerRating), -4.97% at 16.43, announced that it has agreed to buy Precise
Software
(
PRSE |
Quote |
Chart |
News |
PowerRating), +36.76% at 16.48, for $537 million.
Discount store operator Right
Aid
(
RAD |
Quote |
Chart |
News |
PowerRating), +21.10% at 2.64, beat earnings expectations when it reported
a smaller-than-expected loss due to an increase in its pharmacy same-store
sales.
Conglomerate Honeywell
(
HON |
Quote |
Chart |
News |
PowerRating),
+0.88% at 23.91, said that expects to take a charge of $1.9 billion in the
fourth-quarter due to asbestos claims.
From TM’s Implosion List, entertainment
software companies Electronic Arts
(
ERTS |
Quote |
Chart |
News |
PowerRating), -8.68% at 51.64, and THQ
Incorporated
(
THQI |
Quote |
Chart |
News |
PowerRating), -6.68% at 12.85.
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