There’s Good News About Chips

October 2, 2002
Daniel Beighley

Today’s selling nearly erased all of yesterday’s gains, as the
possibility of a war with Iraq was deemed a near-certainty by President Bush.
Buyers appear to be absent in this market, due to the unstable condition of
world affairs. The major indexes sold off on the open, reversed in the first
hour to march to the day’s high just before 1 pm ET, where the bears took over
for the rest of the session, driving prices down for losses on the day. However,
chip stocks were up for most of
the session as the Semiconductor industry announced that chip sales increased
14% in August from a year earlier.

U.S. Treasury Bonds
closed up ‘7 at 113 ’17.

There were no economic releases
today.

Volume was slightly above
average at 1,607,126,000
on the NYSE, and 1,745,789,000
on the Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 4.37, and down
volume over up volume by a 2.12 ratio. Nasdaq declining issues over advancing
issues came in at 2.75, and down volume beat up volume by a 1.79 ratio.

The

VIX was +3.18 at 43.31. The

TRIN was+1.52 at 2.07.

Stocks in
the news:

Computer maker Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), +2.57% at 25.32, raised its earnings guidance to $0.21 per share on
revenues of $9.1 billion.

Chemical giant Dow Chemical
(
DOW |
Quote |
Chart |
News |
PowerRating), -8/55% at 27.25, warned that its third-quarter earnings will be
around $0.16 per share vs. analysts’ expectations of $0.29.

Healthcare company Tenet
Healthcare
(
THC |
Quote |
Chart |
News |
PowerRating), +2.89% at 51.55, increased its profit outlook for
2003 with growth expected to be around 25% from previous forecasts in the
high-teens.

In response to the news over
the Guidant ruling, UBS Warburg said it increases the odds of Johnson &
Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating) (+3.55% at 58.30) and Boston Scientific being the only US
companies in the drug-coated stent market next year.

Also in the medical equipment
and supply business, Henry Schein
(
HSIC |
Quote |
Chart |
News |
PowerRating), -2.30% at 51.69, was
downgraded by UBS Warburg to “hold” from “buy” based on valuation.

Media giant AOL Time Warner
(
AOL |
Quote |
Chart |
News |
PowerRating), +3.26% at 12.32, was reported by the New York Post to be in
merger talks with Disney.

Railroad company Burlington
Northern Santa Fe
(
BNI |
Quote |
Chart |
News |
PowerRating), -6.19% at 23.78, warned that it will not meet
profit estimates due to higher operating costs and and work stoppage on West
Coast ports.

Data storage company
Electronic Data Systems
(
EDS |
Quote |
Chart |
News |
PowerRating), -11.53% at 13.35, announced after the
bell yesterday that the Securities and Exchange Commission had requested its
cooperation in an informal inquiry regarding the company’s purchase and
settlement of forward contracts related to its recent pre-announcement.

Fast food company Wendy’s
(
WEN |
Quote |
Chart |
News |
PowerRating), +3.20% at 35.76, rose after it reiterated its 2002 earnings and
growth projections due to strong same-store sales trends.

Hitting a fresh 52-week low
today, Internet infrastructure company Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), -8.13%
at 10.05, crossed below its psychological $10 mark.

There’s Good News About Chips

BUY THE FEAR, SELL THE GREED

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