The New Phase Of Speculation

The
markets are once again in the red midday,
with the indexes marking
new lows for the year. Retail data released pre-market failed to motivate any
buyers, as price action opened flat and has maintained a downtrend. Geopolitical
concerns continue to dominate market perspective, with speculation for traders
now dominated by when war with Iraq may breakout, not if.

The Dow Jones Industrial
Average

(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
is -1.46% at 7,645.07. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)

is -1.33% at 807.81. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
is -1.16% at 1,264.18.

Winners today are gold and
silver

(
$XAU.X |
Quote |
Chart |
News |
PowerRating)
, +3.57%, insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating)
, +0.66%,
and chemicals
(
$CEX.X |
Quote |
Chart |
News |
PowerRating)
, +0.01%.

Biggest losers are airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating)
, -6.61%, Internet
(
$ECM.X |
Quote |
Chart |
News |
PowerRating)
, -3.08%, telecoms
(
$IXTC.X |
Quote |
Chart |
News |
PowerRating)
, -2.42%, and biotechnology
(
$BTK.X |
Quote |
Chart |
News |
PowerRating)
, -2.25%.

In economic news, retail sales were down
0.09% vs. expectations of a 0.6% loss, retail sales ex-auto were up 1.3%
vs. expectations of a 0.5% rise.

The 10-year U.S. Note
is +215 at 115 155.

The Dollar is -1.09 at
99.64.

Gold is +5.40 at 358.00.

Crude Oil  +0.28 at
36.05.

Volume is at 700,586,000
on the NYSE, and at 682,289,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 1.54, and down
volume over up volume by a 5.43 ratio. Nasdaq declining issues over advancing
issues are at 2.22, and down volume is over up volume by a 6.18 ratio.

Biggest Dow losers are:

Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating)
, -2.42% at 20.58, General
Motors

(
GM |
Quote |
Chart |
News |
PowerRating)
, -2.62% at 33.13, United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating)
,
-2.58% at 58.94, Honeywell
(
HON |
Quote |
Chart |
News |
PowerRating)
, -2.50% at 22.26, SBC
Communications

(
SBC |
Quote |
Chart |
News |
PowerRating)
, -2.47% at 22.50, and Merck
(
MRK |
Quote |
Chart |
News |
PowerRating)
,
-2.19% at 52.18.

Stocks In The News:

Computer hardware company Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating)
, +2.11% at 16.97, is seeing some buying pressure as Merrill Lynch says
it believes the company will exceed its quarterly expectations.

Media company Fox Entertainment
(
FOX |
Quote |
Chart |
News |
PowerRating)
,
-3.28% at 25.65, has been upgraded by UBS Warburg to “buy” from “neutral” after
beating its second-quarter earnings by $0.04 with profits of $0.32 per share.

Grocery retailer Whole Foods Market Inc.
(
WFMI |
Quote |
Chart |
News |
PowerRating)
,
+7.64% at 49.31, beat its first-quarter estimates by $0.01 with profits of $0.41
per share.

Insurance company Lincoln National
(
LNC |
Quote |
Chart |
News |
PowerRating)
,
-3.76% at 27.64, has been downgraded by Salomon Smith Barney to “in-line” from
“outperform”.

Gold miner Barrick Gold
(
ABX |
Quote |
Chart |
News |
PowerRating)
, +2.55% at 16.10 beat its fourth-quarter estimates by $0.04 with
profits of $0.13 per share. 

In the retail sector, May
Department Stores

(
MAY |
Quote |
Chart |
News |
PowerRating)
, +1.52% at 19.35, has beat its fourth-quarter
earnings expectations by $0.08 with profits of $1.28 per share.

Also in the retail sector, UBS
Warburg has downgraded to “neutral” from “buy” the following: Pacific SunWear
(
PSUN |
Quote |
Chart |
News |
PowerRating)
, -3.79% at 16.76, Gap
(
GPS |
Quote |
Chart |
News |
PowerRating)
, -2.96% at 14.73, and The
Limited

(
LTD |
Quote |
Chart |
News |
PowerRating)
, -3.30% at 11.12.

In the insurance sector,
American International Group

(
AIG |
Quote |
Chart |
News |
PowerRating)
, +3.12% at 47.95, has posted earnings
$0.01 below expectations, though has guided higher for the full year 2003.

Medical equipment maker
Medtronic

(
MDT |
Quote |
Chart |
News |
PowerRating)
, -4.57% at 42.99,  has been downgraded by Morgan Stanley
to “equal-weight” from “overweight” after the company reported third-quarter
earnings in-line with estimates.

Healthcare facilities company
Express Scripts
(
ESRX |
Quote |
Chart |
News |
PowerRating)
, -3.87% at 47.41, is down in the pre-market
after receiving a letter from the SEC concerning previous filings. The company
has also beat its fourth-quarter earnings by $0.01  with profits of $0.72 per
share.

Chemical giant and Dow
component DuPont
(
DD |
Quote |
Chart |
News |
PowerRating)
, +1.75% at 36.68, has been upgraded by UBS
Warburg to “buy” from “neutral.”

danielb@tradingmarkets.com