Market’s Reaction To Powell

February 5, 2003
Daniel Beighley

Today
was a roller-coaster ride for the markets as all ears were tuned into
Colin Powell’s testimony to the UN. Price action rallied on Powell’s words,
though sold off in the afternoon as Iraq gave its rebuttal. After hitting
multi-year lows off the open, the US dollar rallied to close positive on the
day, while gold was down for the session. The 10-year note was also lower ahead
of the release of the 3-year and 5-year bills to help government financing
needs.

In economic news, ISM
Services came in at 54.5 vs. expectations of 56.0.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was -165 at 113 295.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) wasÂ 0.61 at 99.90.

Volume was slightly
below average, with the NYSE coming in at 1,391,595,000
and the Nasdaq at 1,357,027,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.28, and down
volume over up volume by a 2.04 ratio. Nasdaq declining issues over advancing
issues came in at 1.23, and down volume beat up volume by a 1.41 ratio.

The

VIX was +0.11 at 36.70. The

TRIN was -0.72 at 1.57.

Big losers on the Dow were:

Stocks in the news:

Aluminum giant Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating),
+2.69% at 19.84, was upgraded by Prudential to “buy” from “hold.”

Internet infrastructure company Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating),
unch at 13.20, was one of the Nasdaq’s most active stocks as it reported
better-than-expected earnings for the second-quarter, though warned that sales
for the current quarter will likely be down 3%.

Communications services company
Sprint FON
(
FON |
Quote |
Chart |
News |
PowerRating), +1.29% at 12.52, missed its fourth-quarter earnings
expectations by $0.01 with profits of $0.37 per share.

Money center bank U.S.
Bancorp
(
USB |
Quote |
Chart |
News |
PowerRating), -2.38% at 20.50, announced that it is considering selling
its regional brokerage arm, Piper Jaffray, after acquiring it five years ago.

Tire maker Goodyear Tire &
Rubber
(
GT |
Quote |
Chart |
News |
PowerRating), -13.26% at 3.73, said that it will eliminate its quarterly
dividend, as it struggles with rising costs, and debt.

Specialty engineering company
Illinois Tool Works
(
ITW |
Quote |
Chart |
News |
PowerRating), -0.23% at 60.49, was upgraded by Salomon
Smith Barney to “outperform” from “underperform.”

Insurance company Fidelity
National
(
FNF |
Quote |
Chart |
News |
PowerRating), -6.41% at 31.50, was downgraded by Morgan Stanley to
“underweight” from “equal-weight.”

Credit rating agency Moody’s
(
MCO |
Quote |
Chart |
News |
PowerRating), +2.52% at 43.05, beat its fourth-quarter earnings expectations by
$0.03 with profits of $0.45 per share.

Broadcasting and cable TV
company Emmis Communications
(
EMMS |
Quote |
Chart |
News |
PowerRating), +1.64% at 21.61, has been
upgraded by UBS Warburg to “buy” from “neutral.”

Computer services company
Computer Sciences
(
CSC |
Quote |
Chart |
News |
PowerRating), +5.30% at 32.38, beat its third-quarter
earnings expectations by $0.01 with profits of $0.61 per share.

Online travel company
Hotels.com
(
ROOM |
Quote |
Chart |
News |
PowerRating), +11.65% at 43.10, missed its fourth-quarter earnings
expectations by $0.01 with profits of $0.37 per share.

Food processing company Hain
Celestial Group
(
HAIN |
Quote |
Chart |
News |
PowerRating), +22.11% at 15.13, beat its second-quarter
earnings expectations by $0.01 with profits of $0.25 per share.

In the biotech sector,
Myriad Genetics
(
MYGN |
Quote |
Chart |
News |
PowerRating), -6.04% at 11.04, was downgraded by Morgan
Stanley to “equal-weight” from “overweight.”

Natural gas company El Paso
Corp.
(
EP |
Quote |
Chart |
News |
PowerRating), -22.50% at 6.20, cut its quarterly dividend by 81%, and has
reduced its earnings outlook for 2003 to $1.00 per share vs. a consensus of
$1.32.

Casino and gaming company
Harrah’s Entertainment
(
HET |
Quote |
Chart |
News |
PowerRating), -4.11% at 33.75, missed its fourth-quarter
earnings expectations by $0.03 with profits of $0.54 per share.

Retailer Linens’ n Things
(
LIN |
Quote |
Chart |
News |
PowerRating), -0.68% at 23.36, beat its fourth-quarter earnings by $0.03 per share
with profits of $0.90 per share.

>From TM’s Implosion List, medical equipment
and supply company Henry Schein
(
HSIC |
Quote |
Chart |
News |
PowerRating), -7.77% at 36.18.

danielb@tradingmarkets.com

Market’s Reaction To Powell

BUY THE FEAR, SELL THE GREED

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