When The Fed Announces, Here’s What To Focus On

September 16, 2003
Vincent Mao

Stocks are
higher this midday. After yesterday’s
lack of action, the major indices are turning it around as stocks are staging a
modest rally ahead of today’s Fed meeting. Benign inflation data is helping to
boost the major averages as consumer prices showed the smallest gain since 1966.
Tech issues are leading the charge once again as
Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating) is projecting fourth-quarter results to be in
the high end of its 27 to 29 cents a share estimates. Also, Frank Dunn of
troubled telecom firm Nortel Networks
(
NT |
Quote |
Chart |
News |
PowerRating)
commented that he expected “somewhat of a strengthening” in its wireless
business. Insurance issues are erasing yesterday’s losses as hurricane Isabel’s
wind speed has slowed from yesterday’s 125 mph to about 105 mph today. In other
news, New York Attorney General Eliot Spitzer charged former
Bank of America‘s
(
BAC |
Quote |
Chart |
News |
PowerRating) Theodore Siphol
with securities fraud and larceny. Bonds are lower today ahead of the decision
on interest rates. Many economists are expecting the Fed to leave rates at 1%,
however the key thing to focus on will be the Fed’s view on the economy.

In economic news, Consumer
Price Index in August fell by an expected 0.3%. The core CPI rose by
0.1% versus estimates of a rise of 0.2%.

The 10-year U.S. Note
is -120 at 111 250.

The dollar is +0.73 at
97.12.

Gold is -0.20 at 373.60.

Crude Oil -0.42 at
27.72.

Volume is 673,000,000 on
the NYSE, and 909,000,000 on the Nasdaq.

Market breadth is positive,
with NYSE advancing issues over declining issues by 2.02, and up over down
volume by 2.74; Nasdaq advancing issues over declining issues at 1.90, and up
volume over down volume at 4.57.

Top Dow stocks are:

Stocks in the news:

International Paper
(
IP |
Quote |
Chart |
News |
PowerRating)
is higher by 2.5% after Merrill Lynch added the stock to their “Focus 1” list.
Merrill believes that the company is poised to benefit from a recovery in the
paper industry.

Drug maker Isis
Pharmaceuticals
(
ISIS |
Quote |
Chart |
News |
PowerRating) is higher by more than 7% after the company’s
experimental diabetes treatment showed promising results in a Phase I clinical
trial. Despite early promise, the drug still has to undergo further testing for
safety and efficacy before it can receive regulatory approval.

Computer peripheral supplier
Standard Microsystems
(
SMSC |
Quote |
Chart |
News |
PowerRating) is higher by 11.50% after the company
reported better-than-expected quarterly results and raised fiscal 2004 guidance.
In its second quarter, the company earned 8 cents a share, compared to 2 cents
in the year-ago quarter. This was 3 cents ahead of consensus estimates. Looking
ahead, the company sees full-year 2004 results between 30 to 35 cents a share,
compared to its previous forecast of 24 to 28 cents a share.

Propane products and services
provider Blue Rhino
(
RINO |
Quote |
Chart |
News |
PowerRating) is lower by 8% after the company reported
quarterly results that fell below expectations. The company reported
fourth-quarter results before charges of 70 cents a share or 2 cents below
expectations. Revenues jumped 20% but was still below estimates.

Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating)
is lower by 5% after a Wall Street Journal article said that the sales at
the doughnut maker’s newer stores are coming in below estimates. The article
reported that sales at about 40 stores which opened between last September to
April 2003 were about $35,000 a week or below company norm.

If you have any comments or
questions, please feel free to email me.

Vincent Mao

vincentm@tradingmarkets.com

When The Fed Announces, Here’s What To Focus On

BUY THE FEAR, SELL THE GREED

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