These Levels Are Crucial For The Indices

January 17, 2003
Daniel Beighley

Sellers have taken control of today’s session, as disappointing
numbers from the University of Michigan’s sentiment report have brought down the
market’s sentiment. Despite tech heavyweights IBM and Microsoft beating their
earnings numbers, the companies remain cautious over the coming year, and have
also motivated sellers. The Dow, S&P 500, and Nasdaq are under their 50-day
moving averages for the first time in 12 sessions.

In economic news, the
University of Michigan’s preliminary sentiment number disappointed at 83.7
vs. an expected 87.0. Industrial production fell 0.2% vs. expectations of
a 0.2% increase, capacity utilization came in at 75.4% vs. an expected
75.7%, and the trade balance showed a deficit of $40.1 billion vs. an
expected $36.4 billion.

The 10-year U.S. Note
is +130 at 113 225.

The Dollar is -0.29 at
100.83.

Gold is -1.30 at 356.80.

Crude Oil is -0.01 at
33.65.

Volume is at 733,898,000
on the NYSE, and at 921,572,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 2.31, and down
volume over up volume by a 3.30 ratio. Nasdaq declining issues over advancing
issues came are at 2.37, and down volume is over up volume by a 9.81 ratio.

Leading the Dow down are:

Stocks in the news:

Software giant Microsoft
Corp.
(
MSFT |
Quote |
Chart |
News |
PowerRating), -4.97% at 52.60, is under water after reporting
lower-than-expected revenue targets and a decline in unearned income. The
company reported earnings of $0.47 per share vs. a consensus of $0.46, and also
announced that it will for the first time pay dividends as it undergoes a
2-for-1 stock split.

Computer hardware titan
International Business Machines
(
IBM |
Quote |
Chart |
News |
PowerRating), -4.93% at 81.05,Â has been
downgraded by Bear Stearns to “peer perform” from “outperform” due to valuation.
The company reported earnings $0.04 ahead of expectations with profits of $1.34
per share.

Conglomerate General
Electric
(
GE |
Quote |
Chart |
News |
PowerRating), -2.00% at 24.53, has reported earnings in line with
expectations at $0.31 per share.

Online auctioneer eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating),
+3.65% at 73.85, has beat its fourth-quarter earnings expectations by $0.04 with
profits of $0.28.

Home improvement retailer Home Depot

(
HD |
Quote |
Chart |
News |
PowerRating), +0.45% at 22.27, said that it expects its revenue to grow 9-12% for
the fiscal year 2003, with per share earnings rising 9-14%. The company also
announced a $250 million store-remodeling plan.

Chemical company DuPont
(
DD |
Quote |
Chart |
News |
PowerRating), -0.45% at 22.27, has had its earnings estimates cut by Bank of America
to $1.95 per share, vs. previous expectations of $2.25.

In the retail sector,
Federated Department Stores
(
FD |
Quote |
Chart |
News |
PowerRating), -1.90% at 27.81, has been downgraded by
CSFB to “neutral” from “outperform.”

Oil company Marathon Oil
(
MRO |
Quote |
Chart |
News |
PowerRating),
-0.69% at 21.70, has had coverage initiated by JP Morgan at “underweight.”

In the semiconductor business, Cree
(
CREE |
Quote |
Chart |
News |
PowerRating), +1.47 at 18.66, has beaten its second-quarter earnings by $0.04
with profits of $0.12.Â

Software company Veritas
Software
(
VRTS |
Quote |
Chart |
News |
PowerRating), -4.21% at 17.50, sold off after it said it will
restate its 2000 and 2001 earnings statements, and for the quarters ending
December 2000 and September 2002.

danielb@tradingmarkets.com

These Levels Are Crucial For The Indices

BUY THE FEAR, SELL THE GREED

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