What Traders Expect From The Fed

November 5, 2002
Daniel Beighley

The
markets were choppy going this mid-term election day, as the major
indexes moved mostly sideways on lower volume. Traders have been reluctant to
take positions ahead of tomorrow’s FOMC meeting, where Fed Funds trading have
factored in an 87% chance for a 25 basis point cut.

In economic news, ISM
Services came in at 53.1 vs. an expected 52.0.

The 10-year U.S. Note
was -060 at 113 200.

The Dollar was -0.25 at
106.03.

Volume was below average,
at 1,290,157,000 on the NYSE, and
1,692,049,000 on
the Nasdaq.

Market breadth was mixed,
with NYSE advancing issues over declining issues by a ratio of 1.11, and up
volume over down volume by a 1.33 ratio. Nasdaq declining issues over advancing
issues came in at 1.02, and down volume beat up volume by a 1.24 ratio.

The

VIX was -0.19 at 34.28. The

TRIN was -0.16 at 0.83.

Boeing Co.
(
BA |
Quote |
Chart |
News |
PowerRating),
+6.23% at 31.52, led the Dow higher today, as the company said it was closing a
deal to lease modified 767s to the US Air Force for $17 billion.

Stocks in the news:

in the chip business,
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), -3.89% at 15.81, fell after it announced
plans to cut 11 percent of its work force, pr 1,750 jobs, as it sees a continued
down turn in its business.

Also in the chip business,
Analog Devices
(
ADI |
Quote |
Chart |
News |
PowerRating), -5.24% at 29.10, sold off after SG Cowen lowered
its 2003 earnings and revenue estimates.Â

Pharmaceutical company
Vertex Pharmaceuticals
(
VRTX |
Quote |
Chart |
News |
PowerRating), -8.10% at 19.15, issued a profit warning
for the year due to a challenging market.Â

Financial services company
Â American Express
(
AXP |
Quote |
Chart |
News |
PowerRating), -2.47% at 36.60, has been downgraded by Merrill
Lynch to “hold” from “buy” based on valuation.

Biotech company Amerisource
Bergen
(
ABC |
Quote |
Chart |
News |
PowerRating), -4.36% at 68.81, beat its fourth-quarter earnings by $0.03
with profits of $0.88 per share.

Business services company
Automatic Data Processing
(
ADP |
Quote |
Chart |
News |
PowerRating) was downgraded by UBS Warburg to “hold”
from “buy”.

Software and programming
company Synopsis
(
SNPS |
Quote |
Chart |
News |
PowerRating), +15.96% at 48.25, raised its third-quarter
earnings outlook to $0.96-$0.98 vs. the Multex consensus of $0.87.

Healthcare facilities company
Unilab
(
ULAB |
Quote |
Chart |
News |
PowerRating), -1.50% at 21.65, beat its third-quarter earnings
estimates by $0.03 with profits of $0.31 per share.

Healthcare facilities company
Tenet Healthcare
(
THC |
Quote |
Chart |
News |
PowerRating), -2.88% at 26.22, was named in two shareholder
lawsuits as federal prosecutors continue to investigate one of its California
medical centers.Â

Communications equipment maker
Tellabs
(
TLAB |
Quote |
Chart |
News |
PowerRating), -8.83% at 7.84, was downgraded by Goldman Sachs to “underperform”
from “in-line.”

Software maker Adobe Systems
(
ADBE |
Quote |
Chart |
News |
PowerRating), -5.69% at 25.82, was downgraded by Deutsche Bank to “sell” from
“hold.”

What Traders Expect From The Fed

BUY THE FEAR, SELL THE GREED

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