What Happens After The Earnings Parade

October 25, 2002
Daniel Beighley

Buyers
eventually took control Friday, after mixed economic data had the
indexes chopping sideways for much of the session. As the parade of earnings
announcements tapers off, traders will be looking to economic and political
factors for their influences on price action. Be sure to read
Mark Boucher’s column this week for his take on the markets.

In economic news, durable
goods fell 5.9% vs. expectations of 1.8%. The University of Michigan’s
consumer sentiment report came in at 80.6 vs. an expected 80.4 reading. And
from the housing market new home sales rose 0.4% to a 1.02 million rate
vs. an expected 986,000 level. Existing home sales rose 1.9% to a 5.40
million annual rate, better than the 5.37 million rate expected by analysts.

The 10-year U.S. Note
was +130 at 11 045.

The dollar was +0.6 at
108.17.

Volume was below average,
at 1,312,443,000 on the NYSE, and
1,458,728,000 on
the Nasdaq.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.14, and up
volume over down volume by a 2.61 ratio. Nasdaq advancing issues over declining
issues came in at 1.83, and up volume beat down volume by a 3.65 ratio.

The

VIX was -3.63 at 36.27. The

TRIN was -0.38 at 0.82.

Leading the Dow were:

Stocks in the news:

Online book seller
Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating), -2.76% at 19.31, was downgraded by Prudential to
“sell” from “hold.” The company topped its earnings expectations by $0.04 for
the third quarter.

Insurance company Cigna
Corp.
(
CI |
Quote |
Chart |
News |
PowerRating), -41.82% at 37.00, issued an earnings warning, and has been
downgraded by Merrill Lynch, Bank of America, and CIBC.

Also in the insurance business,
Aetna
(
AET |
Quote |
Chart |
News |
PowerRating), +1.09% at 41.45, was upgraded by CIBC World Markets to a
“sector performer” from a “sector outperform.”

Defense contractor
Lockheed-Martin
(
LMT |
Quote |
Chart |
News |
PowerRating), -4.17% at 56.63, announced that its earnings rose
36% for the third quarter due to increased spending from the government.

Computer gaming company
Electronic Arts
(
ERTS |
Quote |
Chart |
News |
PowerRating), +2.67% at 67.61, beat its second-quarter
earnings targets by $0.17 with profits of $0.34 per share.

Medical equipment and supply
company Varian Medical
(
VAR |
Quote |
Chart |
News |
PowerRating), +4.87% at 47.98, beat its
fourth-quarter earnings estimates by $0.03 with profits of $0.48 per share.

Financial services company
T. Rowe Price
(
TROW |
Quote |
Chart |
News |
PowerRating), +4.17% at 27.96, missed its third-quarter
earnings target by $0.03 with profits of $0.34 per share.

Conglomerate Tyco
(
TYC |
Quote |
Chart |
News |
PowerRating),
-0.58% at 15.40, posted a hefty loss for its fourth-quarter due to a multi
billion dollar charge. The company also lowered its guidance for the current
quarter.

Communications company
Verizon Communications
(
VZ |
Quote |
Chart |
News |
PowerRating), -0.86% at 36.57, said that their
third-quarter earnings more than doubled from a year ago, though revenue was
flat due to increased completion.

Auto maker Ford Motor
(
F |
Quote |
Chart |
News |
PowerRating),
-1.58% at 8.72, had its long-term debt ratings lowered by Standard and Poor’s
based on concerns over the effectiveness of the company’s restructuring
measures.

Coffee retailer Starbuck’s
(
SBUX |
Quote |
Chart |
News |
PowerRating), +6.32% at 23.87, raised its earnings guidance for the fourth
quarter, as it expects to report in the high end of its goals for 2003.

From TM’s proprietary

Momentum List, audio and video company Imation Corp.
(
IMN |
Quote |
Chart |
News |
PowerRating),
+7.11% at 41.53.

From TM’s proprietary

Implosion List, oil and gas company Amerada Hess Corp.
(
AHC |
Quote |
Chart |
News |
PowerRating),
-9.74% at 52.14.

What Happens After The Earnings Parade

BUY THE FEAR, SELL THE GREED

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