Stocks Turning Around — Here’s Why
Stocks are
higher this midday after a mixed morning.
The Dow was weak early in the session from continued weakness in shares of Merck
(
MRK |
Quote |
Chart |
News |
PowerRating), a credit downgrade on Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), and Merrill Lynch’s
reduction of General Electric’s
(
GE |
Quote |
Chart |
News |
PowerRating) fiscal 2003 results. Meanwhile tech
issues, led by semiconductor stocks, were strong all session long after Lehman
Brother upgraded the semiconductor capital equipment group from “neutral” to
“positive”. The major indices also got a boost from the continuing healthy
corporate profits reports. A number of companies including Corning
(
GLW |
Quote |
Chart |
News |
PowerRating),
Centex
(
CTX |
Quote |
Chart |
News |
PowerRating), United Parcel Service
(
UPS |
Quote |
Chart |
News |
PowerRating), and Radio Shack
(
RSH |
Quote |
Chart |
News |
PowerRating)
guided higher. Stocks were boosted by rumors that both Uday and Qusay Hussein
were killed in a fierce shoot-out in Northern Iraq. Bonds are again lower. The
dollar is higher after a recent pullback and gold is pulling back today after a
$4 jump yesterday.Â
The Dow Jones Industrial
Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) is +0.55% at 9,147.88. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
is +0.83% at 987.14. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is +1.33% at 1703.82.
The day’s leading sectors are
Networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), +3.6%, Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
+0.52%, Telecoms
(
$XTC.X |
Quote |
Chart |
News |
PowerRating), +2.52%, Airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
+2.08%, and Internet Commerce
(
$ECM.X |
Quote |
Chart |
News |
PowerRating), +1.98%.
Weak today are Oil Services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), -1.58%, Healthcare
(
$HMO.X |
Quote |
Chart |
News |
PowerRating), -2.67%,
Health Providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating), -0.63%, Gold & Silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating),
-0.11%, and Drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), -0.06%.
No economic news today or
tomorrow. We do have weekly jobless claims on Thursday. Â
The 10-year U.S. Note
is -035 at 113 000.
The dollar is +0.13 at
96.55.
Gold is -0.70 at
350.300.
Crude Oil -1.18 at
30.60.
Volume is 745,000,000 on
the NYSE, and 973,000,000 on the Nasdaq.
Market breadth is positive,
with NYSE advancing issues over declining issues by a 1.21, and up volume over
down volume by 2.85. Nasdaq advancing issues over declining issues at 1.64, and
up volume over down volume at 3.37.
Top Dow stock(s) are:
AT&T
(
T |
Quote |
Chart |
News |
PowerRating), +2.92% at 19.73,
United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), +2.76% at 75.79, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), +2.72%
at 24.85, SBC
(
SBC |
Quote |
Chart |
News |
PowerRating), +2.55% at 23.72 and Walt Disney
(
DIS |
Quote |
Chart |
News |
PowerRating),
+2.40% at 20.90.
Stocks in the news:
Programmable chip maker,
Altera Corp.
(
ALTR |
Quote |
Chart |
News |
PowerRating) is higher by 1.2% after the company reported a 50%
increase in quarterly profits. The company earned 9 cents a share compared to 6
cents a share a during the year ago period. Altera’s results were in line with
analysts’ estimates. Â
Ashland
(
ASH |
Quote |
Chart |
News |
PowerRating) is
higher by 1.8% despite reporting third-quarter results below expectations. The
company earned $1.01 a share compared to $0.93 a share during the year-ago
period. Ashland’s results were 7 cents shy of analysts’ estimates. The
diversified construction and chemical company cited higher energy costs,
unfavorable weather conditions, and a weak economy.
Travel and real estate services
provider Cendant
(
CD |
Quote |
Chart |
News |
PowerRating) is lower by 3.4% despite reporting
second-quarter results that topped expectations. The company reported earnings
including charges of 37 cents a share compared to just a penny in the year-ago
period. Analysts had expected the company to earn 35 cents a share. Â
Dow component Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating) is lower by 4.6% and hit a 52-week low after Standard & Poor’s
lowered the imaging company’s long-term credit rating from BBB+ to BBB. S&P
based the lowered credit rating on the belief that Kodak’s recent purchase of
PracticeWorks
(
PRWK |
Quote |
Chart |
News |
PowerRating) will hurt their own business.
Novellus Systems
(
NVLS |
Quote |
Chart |
News |
PowerRating)
is higher by 2.7% after the company reported second-quarter results in line with
analysts’ estimates. The company reported income of 5 cents a share compared to
8 cents a share during the year-ago period. Looking ahead, Novellus Chaiman and
CEO Richard S. Hill said, “We are cautiously optimistic that bookings will
increase in the third quarter as we are seeing a rebound in the PC industry and
parts of the telecommunications industry.” Lehman Brothers also upgraded the
stock from “equal weight” to “over weight”.Â
Tool maker Stanley Works
(
SWK |
Quote |
Chart |
News |
PowerRating) is lower by 1.5% after the company reported second-quarter results
that missed analysts’ estimates. The company reported results of 14 cents a
share compared to 72 cents during the year-ago period. This was well below
consensus estimates of 51 cents a share. Looking ahead, the company is expecting
third-quarter results to be between 39 to 51 cents a share or below estimates of
60 to 60 cents a share.Â
If you have any comments or questions, please
feel free to email me.
vincentm@tradingmarkets.com