Is This The Tip Of The Iceberg?

January 8, 2003
Daniel Beighley

The
markets received a shakedown from the bears today, as the major
indexes opened lower, and held downtrends for the entire session. An earnings
warning from Dow component Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating) helped bring down sentiment, as well as
another warning from Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating). Alcoa is the first of the Dow stocks to
report its earnings, and is feared to be a precursor for the rest of the group.

In economic news, consumer
credit fell $2.2 billion vs. expectations of a $3.9 billion rise.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was +095 at 113 265.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) wasÂ -0.68 at 102.24.

Volume was average,
with the NYSE coming in at 1,408,233,000 and the Nasdaq at 1,448,910,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.66, and down
volume over up volume by a 2.71 ratio. Nasdaq declining issues over advancing
issues came in at 1.73, and down volume beat up volume by a 5.29 ratio.

The

VIX was +0.94 at 28.42. The

TRIN was +0.73 at 1.62.

Leading the Dow down were:

Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), -10.37% at 21.85, after it announced
its earnings came in $0.09 below expectations with a loss of $0.27.

Stocks in the news:

Aluminum maker Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating),
-10.37% at 21.85, dropped off after its earnings came in $0.09 below
expectations with a loss of $0.27.

In the gold mining sector, CIBC
World Markets has downgraded AngloGold
(
AU |
Quote |
Chart |
News |
PowerRating), +2.63% at 35.50, and
Gold Fields
(
GFI |
Quote |
Chart |
News |
PowerRating), +6.66% at 14.40, to “sector underperform” from
“sector perform” due to an 18% decline in the Rand over the past three months.
The firm maintains a 2003 target for the price of gold at $350/oz, and has a
2004 target at $375/oz.

Bank of New York
(
BK |
Quote |
Chart |
News |
PowerRating),
-3.91% at 25.50, announced that it will buy Credit Suisse First Boston’s
clearing house, Pershing, for $2 billion. Also in the banking sector,
SunTrust Banks
(
STI |
Quote |
Chart |
News |
PowerRating), -1.28% at 58.29, said that its fourth-quarter
profit dropped 4.6% due to a decrease in revenue and higher credit quality costs
from a weak economy.

Oil and gas company Conoco
(
COP |
Quote |
Chart |
News |
PowerRating), -1.75% at 47.59, announced that it may take a fourth-quarter charge
for as much as $1.3 billion to cover the cost of selling off a number of its
service stations.

Health insurer Cigna
(
CI |
Quote |
Chart |
News |
PowerRating),
+3.09% at 42.58, said it will take a charge of $98 million as it reduces its
workforce by 7.7%.

Bomb detection company
Invision
(
INVN |
Quote |
Chart |
News |
PowerRating), +2.68% at 27.93, has raised its fourth-quarter revenue
forecast to at least $210 million vs. previous estimates of $160 million.

Investment bank JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), -3.84% at 26.77, has been downgraded by UBS Warburg to “hold” from
“buy.”

Electronics Instruments &
Controls company Solectron
(
SLR |
Quote |
Chart |
News |
PowerRating), -6.20% at 4.08, was downgraded by
Credit Suisse First Boston to “underperform” from “neutral.”.

Also from TM’s
Implosion List, software maker Take-Two Interactive
(
TTWO |
Quote |
Chart |
News |
PowerRating), -5.66%
at 21.99.

Is This The Tip Of The Iceberg?

BUY THE FEAR, SELL THE GREED

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