What’s Giving Bulls Reason To Cheer

October 1, 2002
Daniel Beighley

Price
action was narrow and choppy in early trading, though a late-afternoon
rally launched the major indexes well into positive territory at the close.

The markets managed to shake
off a negative report from the ISM, giving the Bulls reason to cheer for a
change. A potential near-term low has also been highlighted by Carolyn
Boroden, though the duration of such a move remains unclear.

U.S. Treasury Bonds
closed down ’30 at 113 ’10.

In economic news, The Institute
of Supply Management dropped to 49.5% for September, from August’s reading
of 50.5%. Levels below 50% indicate contraction. Economists were looking for a
reading of 50.4%.

Volume was slightly above
average at 1,684,124,000
on the NYSE, and 1,681,452,000
on the Nasdaq.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.21, and up
volume over down volume by a 3.95 ratio. Nasdaq advancing issues over declining
issues came in at 1.25, and up volume beat down volume by a 3.06 ratio.

The
VIX
was -4.44 at 40.13. The TRIN
was -1.18 at 0.56.

Stocks in the news:

Computer hardware maker Dell
Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), +4.80% at 24.64, was upgraded by Bank of America to
“buy” from “market perform” with a 12-month price target of
$30.

Online retailer Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating), +6.40% at 16.95, had its third-quarter earnings expectations raised
by Bear Stearns by 1 cent per share, and a new price target of $19.

Financial services company Fannie
Mae
(
FNM |
Quote |
Chart |
News |
PowerRating), +9.53% at 89.85, shot up after the company announced that its
duration gap (a measure of the difference between the maturity of the company’s
assets and liabilities) had increased due to long-term rates, ignitingÂ
mortgage prepayments.

Biotech company Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating), +9.55% at 89.85, raised its earnings guidance, with profits expected
to exceed previous a previous estimate of $0.57 by 30%. The stock was also a
member of TM’s Â Momentum
List.

Electric utilities company
TXU Corp.
(
TXU |
Quote |
Chart |
News |
PowerRating), -4.72% at 39.74,Â was downgraded by Merrill Lynch
to “neutral” from “buy” with new guidance of $0.20 per
share.

Drug maker Wyeth
(
WYE |
Quote |
Chart |
News |
PowerRating),
+5.06% at 33.41, was upgraded by Raymond James to “strong buy” from
“market perform” due to a lack of patent expirations and sales growth.

Also in the drug making business,
Alcon
(
ACL |
Quote |
Chart |
News |
PowerRating), -3.48% at 37.40, was downgraded by Bank of America to
“buy” from “strong “buy” based on the belief that
additional multiple expansion will be difficult in the near-term.

One of the day’s big losers was
Aeropostale
(
ARO |
Quote |
Chart |
News |
PowerRating), -57.79% at 6.50, as the company reduced its fiscal
forecasts for the third and fourth quarters.

Oil services company Nabors
Industries
(
NBR |
Quote |
Chart |
News |
PowerRating), -1.83% at 32.15, warned that its third-quarter
earnings will fall short of expectations due to the fact that North American Gas
related activity has yet to materialize.

Retailer Target
(
TGT |
Quote |
Chart |
News |
PowerRating),
+1.62% at 30.00, was downgraded by Salomon Smith Barney to “in-line”
from “outperform.”

Data storage company EMC
Corp.
(
EMC |
Quote |
Chart |
News |
PowerRating), +6.78% at 4.88, rose after an upgrade from Lehman Brothers
to “overweight” from “equal weight” based on valuation.

What’s Giving Bulls Reason To Cheer

BUY THE FEAR, SELL THE GREED

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