One Green Sector…

October 4, 2002
Daniel Beighley

One sector closing green today was gold and silver
(
$XAU |
Quote |
Chart |
News |
PowerRating),
+0.94%, as the parade of earnings warnings continued. Unemployment data gave a
mixed diagnosis to the health of our economy. Price action on the major indexes
maintained a southern course for most of the session, with a late-afternoon
rally bringing the market off its lows. The Dow made a 5-year low. Buying power
remains weak in this market, and Wall Street’s mood is one of caution. Monday
President Bush will speak to the world on the topic of Iraq.

U.S. Treasury Bonds
closed + ‘6 at 113 ’20.

In economic news, nonfarm
payrolls fell 43,000 in September vs. an expected 6,000, while the
jobless rate fell to 5.6% vs. an expected 5.9%. The numbers aroused some
suspicion of inaccuracy among traders, as they are inconsistent with other
economic data that depict a weakening economy.

Volume was above average
at 1,771,353,000
on the NYSE, and 1,583,113,000
on the Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 2.92, and down
volume over up volume by a 5.85 ratio. Nasdaq declining issues over advancing
issues came in at 2.37, and down volume beat up volume by a 4.57 ratio.

The

VIX was +1.32 at 46.28. The

TRIN was +0.58 at 1.98.

Dow stocks were hit hard today,
with the following leading the index down:

Tobacco company Philip
Morris
(
MO |
Quote |
Chart |
News |
PowerRating), -7.36% at 36.59, received an unfavorable ruling in a lawsuit
that requires it to pay out $28 billion in punitive damages. Aerospace and
defense company Boeing Co.
(
BA |
Quote |
Chart |
News |
PowerRating), -6.70% at 32.01, announced that it
will take a $250 million charge for the third-quarter due to a lower value for
its aircraft, cutting profits by 30%. Entertainment giant Walt Disney Co.
(
DIS |
Quote |
Chart |
News |
PowerRating), -5.93% at 15.05, had its credit rating cut by Fitch based on the
belief that its cash flow won’t rise until 2004.

Also, aluminum giant Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), -4.92% at 19.11, announced that its third-quarter profit fell 43% due
to lower prices for its product and scaled-back production.

Stocks in
the news:

Energy services company TXU
Corp.
(
TXU |
Quote |
Chart |
News |
PowerRating), -17.81% at 27.04, lowered its earnings expectations for the
third-quarter, fourth-quarter, and 2003 due to lower prices for its product, and
foreign competition. The stock was also listed on TM’s

Implosion List.

Healthcare facilities company
Lifepoint Hospitals
(
LPNT |
Quote |
Chart |
News |
PowerRating), +6.58% at 33.04, was upgraded by Merrill
Lynch to “buy” from “neutral” based on valuation.

Drug maker Schering Plough
(
SGP |
Quote |
Chart |
News |
PowerRating), -1.92% at 17.30, reduced its earnings guidance for the third-quarter
to $0.28-$0.29 a share vs. the Multex consensus of $0.35. The company has also
cut estimates for the rest of 2002 and 2003.

Regional bank Northern Trust
(
NTRS |
Quote |
Chart |
News |
PowerRating),
-5.72% at 31.81, announced earnings short of expectations with profits of $0.43
vs. the Multex consensus of $0.55.

Also in the semiconductor
business, DuPont Photomask
(
DPMI |
Quote |
Chart |
News |
PowerRating), -17.19% at 18.35, cut its
first-quarter outlook to a loss of $0.30-$0.32 vs. the Multex consensus for a
loss of $0.06.

Insurance company Cigna
(
CI |
Quote |
Chart |
News |
PowerRating), -10.27% at 62.18, was downgraded to “underperform” from “in-line,”
based on the belief that lower growth rates will be achieved.

One Green Sector…

BUY THE FEAR, SELL THE GREED

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