Setting The Tone For Tomorrow

March 20, 2002
Daniel Beighley

The markets never had a chance
today as the major averages sank on the open, consolidated for the early part of
the session, then sold off in the last three hours to rack up losses at the
close. Gold and silver represented the only decent gains of the sectors, with
Internet, airline, software, and the semiconductors logging the steepest
declines.

A pre-market downgrade by a
major brokerage over Intel’s earnings set the tone of the day, as another
"better than expected" economic report came onto the scene. February
housing starts were up 2.8% to 1.769 million, beating analysts’ expectations
of 1.63 million. This is the highest level of housing starts since 1998.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 2.12, and down-volume
over up-volume by a 2.58 ratio. Nasdaq declining issues over advancing issues
came in at 1.58, and down-volume beat up-volume by a 5.13 ratio. The
VIX
was down 0.38 to 20.73. The TRIN
was up 0.34 to 1.21.

Average volume on the NYSE and
below average volume on the Nasdaq sent the Dow and the S&P 500 to the
bottom of their current consolidations, while the Nasdaq gapped down and was
halted at its 20-day moving average. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
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PowerRating),
down 3.75%, gapped down and stayed at its near-term support line. The Broker/Dealer
Index
(
$XBD.X |
Quote |
Chart |
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PowerRating), down 2.26%, erased all of yesterday’s gains.

Chip giant Intel Corporation (INTC),
down 3.75% at 30.53, had its second quarter earnings estimates lowered by Salomon
Smith Barney due to a weaker seasonal outlook.

Global chemical company Eastman Chemical Co.
(EMN),
up 2.27% at 48.46, announced first quarter profits of 25 cents a share,
excluding one-time costs. Analysts were looking for 11 cents a share.

Electronics manufacturing company Jabil Circuit
(
JBL |
Quote |
Chart |
News |
PowerRating), up 6.35% at
22.08, rose after announcing that second quarter results would come in better
than expected, with earnings of 11 to 13 cents a share and revenue of $825 to
$855 million. The company expects earnings for the year to come in at 45 to 50
cents a share, compared to analysts’ expectations of 45 cents a share.

Computer hardware company Mercury Computer
Systems (MRCY),
down 14.27% at 30.03, said that it expects to earn 5 to 12 cents a share for its
third quarter. Analysts were looking for 24 cents a share.

Software maker VeriSign Inc. (VRSN),
down 9.30% at 26.42, announced a partnership with SkyGo Inc.
to serve as a platform for their digital marketing campaign.

From TM’s Proprietary
Implosion List, drug maker Abbot Laboratories
(
ABT |
Quote |
Chart |
News |
PowerRating) fell 2.95% at
51.80. It was announced today that the company’s obesity drug is being
questioned by a consumer advocacy group known as Public Citizen.

Setting The Tone For Tomorrow

BUY THE FEAR, SELL THE GREED

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