When The Number Came Out, This Was The Trade To Take

August 26, 2003
Vincent Mao

Stocks are
again lower this midday.Â The major
indices are modestly lower today with the Nasdaq taking the biggest hit due to
selling in semiconductors, biotechs, and Internet issues. Even a trio of
positive economic reports could not help as both the Dow and Nasdaq could be
headed for their third straight day of losses. In a sign that manufacturing
activity continues to pick up, orders for durable goods rose for the second
month. Boosted by near historic low interest rates, sales of new homes sold at
the second-fastest pace ever. And the selling in stocks accelerated after the
consumer confidence came in better than expected. The 10:00 a.m. reversal bar would have provided a nice short entry. The Dow took out its 20-day
moving average. Its next potential support level could be its 50-day moving
average at 9188. Meanwhile, the Nasdaq is approaching support from its former
line of resistance at 1727. Bonds are slightly positive despite the economic
data.Â

In economic news, New Home
Sales in July fell to an annual rate of 6.12 M compared to economists’
expectations of a drop to 5.90 M. Durable Orders in July came in as
expected at a gain of 1%. Excluding transportation, durables orders rose 1.7%
which represents the biggest gain in six months. Lastly Consumer Confidence
for August came in at 81.3 or better than the 79.6 predicted by economists..

The 10-year U.S. Note
is +010 at 110 240.

The dollar is -0.15 at
98.78.

Gold is +3.40 at 365.80.

Crude Oil +0.25 at
30.95.

Volume is 549,000,000 on
the NYSE, and 685,000,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by 2.33, and down over up
volume by 2.52; Nasdaq declining issues over advancing issues at 3.22, and down
volume over up volume at 2.47.

Top Dow stocks are:

Stocks in the news:

Automobile financing provider
Americredit
(
ACF |
Quote |
Chart |
News |
PowerRating) is higher by 12% despite reporting a loss in its
latest quarter. Including a $57.7 million non-cash charge, the company reported
a fourth-quarter loss of 11 cents a share compared to restated earnings of $1 a
share in the year-ago quarter. Revenues fell 36% to $197.3 million.Â

Networking and
telecommunications solutions provider Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating) is higher by 4.5%
after the company was selected by Cox Communications
(
COX |
Quote |
Chart |
News |
PowerRating) to provide data
support services for Cox’s broadband communications network. UBS also upgraded
the stock from “Reduce” to “Neutral” on the belief that the company is in
contention for contracts from MCI and the US government.Â

Telecom equipment provider
Comtech
(
CMTL |
Quote |
Chart |
News |
PowerRating) is higher by 20% after the company raised fourth-quarter
guidance. Due to stronger-than-expected demand for its wireless communications
services, the company now sees revenues of $51 million and earnings between 24
and 26 cents a share. Consensus estimates are calling for revenues of $43.3
million and earnings of 19 cents a share.Â Â

Engineered Support Systems

(
EASI |
Quote |
Chart |
News |
PowerRating) is higher by 12.5% after the company reported third-quarter
results that topped analysts’ estimates. The supplier of military equipment
earned 72 cents a share compared to 41 cents a share in the year-ago quarter.
Revenues jumped 46% to $155.7 million. Looking ahead, the company sees full-year
results of $2.40 to $2.45 a share on revenues of at least $550 million. Current
consensus estimates are calling for earnings of $2.24 a share and revenues of
$543 million.Â

Medical diagnostic equipment
maker Digene
(
DIGE |
Quote |
Chart |
News |
PowerRating) is lower by more than 6% despite reporting
better-than-expected results. For its fourth quarter, the company reported
earnings of a penny a share compared to a loss of 25 cents a share in the
year-ago quarter. Analysts had expected the company to break even. However, the
company revenue forecast for fiscal 2004 of $90 to $95 million is slightly below
consensus estimates of $95.8 million.

Drug maker Myriad Genetics

(
MYGN |
Quote |
Chart |
News |
PowerRating) is off by more than 15% after the company reported a
wider-than-expected loss. The company reported a fourth-quarter loss of 26 cents
a share compared to a loss of 29 cents a share in the year-ago quarter. Revenues
jumped 11% to $15.71 million. Analysts were looking for a loss of 22 cents a
share and revenues of $17.2 million.

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

Vincent Mao

vincentm@tradingmarkets.com

When The Number Came Out, This Was The Trade To Take

BUY THE FEAR, SELL THE GREED

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