Where Roller Coaster Action Has Support
The
major indexes closed the session slightly down, as roller coaster
action had stocks open sharply lower on a series of downgrades and earnings
warnings, then bolt higher on bullish comments on the tech sector from
Microsoft. The 20-day moving averages provided support for the indexes as they
closed in the middle of their intraday ranges. Intermediate-term players will
note distribution on the NYSE and Nasdaq, with overall volume slightly above
average.
Dow
Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed -0.05%
at 8,737.78. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
-0.34%
at 917.34. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed -1.30%
at 1,430.09.
The day’s biggest gains were
found in healthcare
(
$HMO.X |
Quote |
Chart |
News |
PowerRating), +4.85%, gold
and silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), +1.35%, and airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
+0.78%.
The day’s biggest losses were
in semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), -5.73%, networking
(
$GIP.X |
Quote |
Chart |
News |
PowerRating),
-3.61%, Internet
(
$MOX.X |
Quote |
Chart |
News |
PowerRating), -3.48%, and software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating),
-3.30%.
In economic news, ISM
services came in at 57.4 vs. an expected 54.0. Factory orders were up
1.5% vs. an expected 1.7% increase, and productivity was up 5.1% vs. an
expected rise of 4.5%.
The 10-year U.S. Note
was + 145 at 112 245.
The Dollar was -0.20 at
106.24.
Volume was slightly
above average, with the NYSE coming in at 1,484,529,000, and the Nasdaq at
1,868,239,000.
Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.07, and down
volume over up volume by a 1.73 ratio. Nasdaq declining issues over advancing
issues came in at 1.47, and down volume beat up volume by a 5.82 ratio.
The
VIX
was +0.38 at 32.14. The TRIN
was -0.56 at 1.64.
Leading the Dow down, Walt
Disney
(
DIS |
Quote |
Chart |
News |
PowerRating), -4.63% at 17.68, as it lowered its earnings
expectations for the first-quarter of 2003, and Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating),
-4.47% at 18.37, has reduced its sales growth estimates for the year ending in
October.
Also, Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
-2.85% at 19.73, International Paper
(
IP |
Quote |
Chart |
News |
PowerRating), -1.83% at 37.49, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), -1.81% at 24.32, and SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating), -1.78% at
26.45.
Stocks in the news:
Deutsche Bank has cut into the
analog semiconductor stocks with downgrades to “sell” from
“hold” on Analog Devices
(
ADI |
Quote |
Chart |
News |
PowerRating), -6.52% at 27.64, Linear
TechÂ
(
LLTC |
Quote |
Chart |
News |
PowerRating), -6.47% at 29.71, Maxim Integrated
(
MXIM |
Quote |
Chart |
News |
PowerRating),-5.09%
at 38.93, National Semiconductor
(
NSM |
Quote |
Chart |
News |
PowerRating), -8.75% at 17.50, and SIPEX
Corp.
(
SIPX |
Quote |
Chart |
News |
PowerRating), -11.78% at 3.40. Downgraded to “hold” from
“buy” are Agere Systems
(
AGR.A |
Quote |
Chart |
News |
PowerRating), -5.67% at 1.33, Fairchild
Semi
(
FCS |
Quote |
Chart |
News |
PowerRating), -6.92% at 13.03, and Intersil
(
ISIL |
Quote |
Chart |
News |
PowerRating), -4.32% at
18.33.
Morgan Stanley also downgraded the sector to
“in-line” from “attractive”.
Elsewhere in the chip sector, Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating), -3.32% at 7.85, and Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), -5.38% at
15.11.
In the retail industry, Federated
Department Stores
(
FD |
Quote |
Chart |
News |
PowerRating), -2.28% at 31.25, announced that same store sales
for November were down 7.4 percent. Elsewhere in the sector, May Department
Stores
(
MAY |
Quote |
Chart |
News |
PowerRating), -1.67% at 23.48, and Sears
(
S |
Quote |
Chart |
News |
PowerRating), -0.77% at 26.93.
Electric utilities company
First Energy
(
FE |
Quote |
Chart |
News |
PowerRating), -3.62% at 30.00, lowered its earnings
expectations for the full year to the range of $3.35-3.55 per share vs. previous
expectations of $3.70-3.90 per share.
Healthcare facilities company
Tenet Healthcare
(
THC |
Quote |
Chart |
News |
PowerRating), +5.10% at 18.75, lowered its earnings
guidance for the full year 2003 to the range of $2.38-2.78 per share vs. a
previous consensus of $2.86 per share.
Biotech stock Cardinal Health
(
CAH |
Quote |
Chart |
News |
PowerRating), +2.81% at
64.00, announced that it reached an agreement with Syncor
(
SCOR |
Quote |
Chart |
News |
PowerRating),
+14.12% at 29.81, to reduce the exchange ratio of its stock for a merger.
Oil service company Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating), -1.37% at 45.17, was upgraded by Lehman Brothers to
“overweight” from “equal weight”.