Two Patterns To Watch

The major indexes remain in negative
territory,
as better-than-expected economic news failed to outweigh a series of
downgrades and earnings warnings. Price has established a trading range with a
double bottom and double top in place.


size=2>Dow Jones Industrial Average
(
$INDU.X |
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is -0.17% at
8,728.05 The S&P 500
(
$SPX.X |
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is
face=Arial size=2> -0.36%face=Arial size=2> at 917.48. The Nasdaq
(
$COMPQ |
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is
-1.72%style=”mso-bidi-font-size: 10.0pt”> at
1,424.02.


Current leaders are size=2>healthcare providers
(
$RXH.X |
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, +3.87%,
airlines
(
$XAL.X |
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, +1.03%, and gold and silver

(
$XAU.X |
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, +1.01%.


Driving the action down are
semiconductors
(
$SOX.X |
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, -6.45%, networking
(
$GIP.X |
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, -4.62%, and computer hardware
(
$GHA.X |
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,
-3.82%.


In economic news, ISM services
came in at 57.4 vs. an expected 54.0. Factory orders were up 1.5% vs.
an expected 1.7% increase, and productivity was up 5.1% vs. an expected
rise of 4.5%.


The 10-year U.S.
Note
is +195 at 112 295.


The Dollar is -0.34 at
106.10.


Volume is at 780,722,000 on
the NYSE, and 1,045,714,000 on the Nasdaq.


Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 1.26, and down
volume over up volume by a 1.88 ratio. Nasdaq declining issues over advancing
issues came in at 1.83, and down volume beat up volume by a 7.38 ratio.


Leading the Dow down are Walt Disney
(
DIS |
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PowerRating)
, -4.58% at 17.69, as it lowered its earnings expectations
for the first-quarter of 2003, and Hewlett Packard
(
HPQ |
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, -4.42% at
18.38, has reduced its sales growth estimates for the year ending in
October.


Also, Intel
(
INTC |
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PowerRating)
,
-3.99% at 19.50, Alcoa
(
AA |
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, -2.87% at 24.06, International
Business
Machines
(
IBM |
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, -1.95% at 83.55, and International
Paper

(
IP |
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, -1.83% at 37.49.


Stocks in the news:


Deutsche Bank has cut into the analog
semiconductor stocks with downgrades to “sell” from “hold” on Analog
Devices

(
ADI |
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, -7.78% at 27.27, Linear Tech 
(
LLTC |
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, -7.66%
at 29.42, Maxim Integrated
(
MXIM |
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, -5.78% at 38.65, National
Semiconductor

(
NSM |
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, -9.49% at 17.36, and SIPEX Corp.
(
SIPX |
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, -14.29% at 3.30. Downgraded to “hold” from “buy” are Agere
Systems

(
AGR.A |
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, -9.22% at 1.28, Fairchild Semi
(
FCS |
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,
-8.00% at 12.88, and Intersil
(
ISIL |
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, -7.07% at 17.61.


In the retail industry, Federated
Department Stores

(
FD |
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PowerRating)
, -0.88% at 31.70, announced that same store sales
for November were down 7.4 percent. Elsewhere in the sector, May Department
Stores

(
MAY |
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PowerRating)
, -1.76% at 23.46, and Sears
(
S |
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, +0.18% at 27.19.


Electric utilities company First
Energy

(
FE |
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, -0.80% at 30.88, lowered its earnings expectations
for the full year to the range of $3.35-3.55 per share vs. previous expectations
of $3.70-3.90 per share.


Healthcare facilities company
Tenet Healthcare

(
THC |
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, +4.82% at 18.70, lowered its earnings
guidance for the full year 2003 to the range of $2.38-2.78 per share vs. a
previous consensus of $2.86 per share.


Oil service company Schlumberger

(
SLB |
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PowerRating)
, -1.88% at 44.94, was upgraded by Lehman Brothers to “overweight”
from “equal weight”.