Two Signs Of Strength

February 7, 2003
Daniel Beighley

Bears
ruled the markets for the fourth day in a row, as a gap up open on
better-than-expected employment numbers was met by eager sellers. Job growth was
shown to be the strongest since November of 2000, though many feel the number
was misleading given the retail sector’s fewer layoffs after the holiday from
less hiring going in. Fears and uncertainty of war with Iraq remained the top
news, as the Terror Threat Level was upped to “high” from “elevated.” Healthcare
and biotech were sectors showing strength on the day.

In economic news, nonfarm
payrolls came in at 143K vs. expectations of 69K, the unemployment
rate was 5.7% vs. an expected 6.0%, hourly earnings were at 0.0% vs.
an expected 0.3%, the average workweek came in at an expected 34.2,
wholesale inventories rose 0.8% vs. an expected 0.2%.Â

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was +075 at 114 185.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was +0.08 at 99.77.

Volume was on the
light side, with the NYSE coming in at 1,229,808,000
and the Nasdaq at 1,232,211,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 2.06, and down
volume over up volume by a 3.40 ratio. Nasdaq declining issues over advancing
issues came in at 1.96, and down volume beat up volume by a 3.97 ratio.

The

VIX was +0.28 at 38.80. The

TRIN was +0.23 at 1.67.

Biggest losses in the Dow were:

Stocks in the news:

Broker Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating), -2.45% at 32.93, announced that its
head of research will be leaving the company in March, one of a series of recent
departures including the chief technology officer and vice chairman.

Steel maker Nucor
(
NUE |
Quote |
Chart |
News |
PowerRating), +4.25% at 39.73, was upgraded by CSFB to
“outperform” from “neutral”.

Computer services company Electronic Data
Systems
(
EDS |
Quote |
Chart |
News |
PowerRating), +4.96% at 16.49, lowered its 2003 earnings guidance to
$1.80-$2.00 per share vs. previous expectations of $2.03 per share. CSFB has
also reduced its estimates on the company.

Healthcare facilities company HealthSouth
(
HRC |
Quote |
Chart |
News |
PowerRating), -2.47% at 3.55, announced it has received a subpoena from the U.S.
Attorney’s office for an investigation into the company’s stock.

Computer services company First Data
(
FDC |
Quote |
Chart |
News |
PowerRating),
-0.23% at 33.84, was the focus of negative comments in a Wall Street Journal
article that brings to question the stocks ability to rise.

Insurance company Cigna
(
CI |
Quote |
Chart |
News |
PowerRating), +9.68% at
43.02, beat its fourth-quarter earnings estimates by $0.07 with profits of $1.27
per share. The company has also raised its earnings guidance.

Cruise line company Carnival Corp.
(
CCL |
Quote |
Chart |
News |
PowerRating),
-0.86% at 22.98, had its 2003-04 estimates cut by Bank of America with a
new price target of $23.

Computer services company
Overture Services
(
OVER |
Quote |
Chart |
News |
PowerRating), -6.03% at 21.02, posted fourth-quarter
earnings $0.01 ahead of estimates with profits of $0.24 per share, though has
guided down for the first-quarter.

Biotech firm Applied
Biosystems
(
ABI |
Quote |
Chart |
News |
PowerRating), +0.30% at 16.36, was upgraded by UBS Warburg to “buy”
from “neutral.”

danielb@tradingmarkets.com

Two Signs Of Strength

BUY THE FEAR, SELL THE GREED

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