What’s Interesting, So Far, About This Rate Cut
Stocks
were higher Thursday. After some early morning weakness brought on by
the mixed economic reports, the major indices rallied back.The Dow made an
intraday double bottom below the psychological 9,000 level, but closed above it. Upgrades in AMR
(
AMR |
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PowerRating) and Morgan Stanley
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help inspire buying. Tech stocks outperformed the major averages today with
Internet, telecom, and semiconductors in the lead. The FOMC released its minutes
today, and the market interpreted the disinflation comments as being bad for
bonds, which sold off again. Interestingly, banks — with the exception of Bank
of America — which normally cut rates after the Fed cuts, have not cut this
time. The Dollar made a wide range bar up.
The Dow Jones Industrial
Average
(
$INDU.X |
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PowerRating) rose 67.51 at 9,079.04. The S&P 500
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$SPX.X |
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gained 10.49 at 985.81. The Nasdaq
(
$COMPQ |
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PowerRating) rallied 31.35 at
1634.01.
The day’s leading sectors are
Airlines
(
$XAL.X |
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(
$GIN.X |
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+4.00%, Telecom
(
$IXTC.X |
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PowerRating), +2.07%, Semiconductors
(
$SOX.X |
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+2.75%, and Healthcare
(
$HMO.X |
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PowerRating), +1.76%.
Weak today are Oil Services
(
$OSX.X |
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-1.76%, Gold & Silver
(
$XAU.X |
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PowerRating), -0.61%, Energy
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$DXE.X |
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PowerRating),
-1.08%, Natural Gas
(
$XNG.X |
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PowerRating), -0.58%, and Oil
(
$XOI.X |
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PowerRating),
-0.51%.
In economic news, Weekly
Initial Jobless Claims came in at 404K compared to estimates of 415K. This
was the lowest level since late-March. The four-week moving average fell by
5,250 to 428,250. First quarter GDP was downwardly revised from 1.9% to
1.4%.
The 10-year U.S. Note
was -108 at 117 06.
The dollar gained 0.85 at
95.40.
Gold fell -4.40 at 344.10.
Crude Oil -0.05 at
28.96.
Volume was
1,383,524,000 on the NYSE, and
1,550,494,000 on the Nasdaq.
Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.01, and up
volume over down volume by a 2.77 ratio. Nasdaq advancing issues over declining
issues at 1.71, and up volume over down volume is at a 2.98 ratio.
Top Dow stocks were:
Alcoa
(
AA |
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Intel
(
INTC |
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PowerRating), +0.59 at 20.63, Altria Group
(
MO |
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News |
PowerRating), +0.81 at
44.78, Eastman Kodak
(
EK |
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Chart |
News |
PowerRating), +0.60 at 27.85, and Hewlett Packard
(
HPQ |
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PowerRating), +0.50 at 21.30.
Stocks in the news:
AMR Corp.
(
AMR |
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PowerRating) rose
20% after CSFB upgraded the stock from “neutral” to “outperform”. CSFB
based the upgrade on the company’s positive cash flow which resulted from costs
reduction and improved sales. AMR closed at 10.90, up 1.82.
Biovail
(
BVF |
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PowerRating) gained
3.09 after announcing that the FDA approved its antidepressant drug Wellbutrin XL. The FDA is seeking further
clarification and Biovail expects the drug to be approved later in 2003. Wellbutrin XL is licensed by Biovail to Glaxosmithkline
(
GSK |
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PowerRating).
CNET
(
CNET |
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PowerRating) rose
17% after Smith Barney upgraded the stock from “under
perform” to “Outperform”. The firm based the upgrade on the belief that CNET
will produce better-than-expected revenue growth due to the company’s cost
control procedures. Smith Barney also set a 12-month target price of $8.
Esperion Therapeutics
(
ESPR |
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PowerRating)
rallied 2.81 on extremely heavy volume after the company reported positive
results of its phase II study of its ETC-216 cute coronary syndrome treatment. Esperion noted that the trial met its goal of showing “statistically significant
regression of atherosclerosis”.
Conagra Foods
(
CAG |
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PowerRating)
fell slightly after the company reported worse than expected fourth
quarter estimates. The food producer earned 29 cents a share compared to 34
cents a share during the same period a year ago. Analysts had expected the
company to earn 41 cents a share.
Snap On
(
SNA |
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PowerRating) was
off on heavy volume after the company warned that second quarter results
would come in below previous estimates. The tool maker now expects earnings
between 36 to 40 cents a share compared to consensus estimates of 49 cents a
share. The company cited weakness in its commercial and industrial businesses.