Why Institutions Are Watching Closely Here

April 4, 2003
Daniel Beighley

The
markets ended the day mixed as mostly sideways price action held onto
modest gains for the week. From a news perspective, the market has been looking
good as we continued to shrug off negative economic data. This morning,
disappointing nonfarm payrolls was a non event as the markets opened higher. The
main issue for the markets remains Iraq. Volume was light on the session with
many reluctant to take positions into the weekend. Technology issues were
deepest in the red, weighed down by the market-leading semis. The Dow and S&P
closed the week just below their critical 200-day simple moving averages, which
is heavily watched by institutions and will be a critical barrier for this
market.

In economic news, nonfarm
payrolls were down 108K vs. expectations of a loss of 40K, the
unemployment rate came in at 5.8% vs. expectations of 5.9%, hourly
earnings were up 0.1% vs. expectations of a 0.2% rise, and the average
workweek came in at 34.3 vs. expectations of 34.2.

The Ten Year NoteÂ was
-050 at 114 040.

The US dollar was +0.10
at 100.88.

Volume was average,
with the NYSE coming in at 1,324,527,000 and the Nasdaq at 1,451,117,000.

Market breadth was mixed,
with NYSE advancing issues over declining issues by a ratio of 1.22, and up
volume over down volume by a 1.16 ratio. Nasdaq declining issues over advancing
issues came in at 1.19, and up volume beat down volume by a 2.00 ratio.

The

VIX was +0.46 at 32.80. The

TRIN was -0.23 at 1.05.

Strongest in the Dow were:

Stocks in the news:

Chip giant Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
-2.95% at 17.05, weighed the Dow down after UBS Warburg lowered its estimates on
the company for the quarter ending in June. the firm now expects the company to
pull in revenues of $6.54 billion vs. previous estimates of $6.65 billion.

Tobacco company Altria
(
MO |
Quote |
Chart |
News |
PowerRating),
-4.71% at 28.30, was the Dow’s worst-performing stock after the company
announced it may have to file for bankruptcy. The country’s largest cigarette
maker is having trouble coming up with the $12 billion for a bond ordered by a
court in Illinois.

Software company Network
Associates
(
NET |
Quote |
Chart |
News |
PowerRating), -5.74% at 13.46, fell after announcing it had agreed
to acquire Entercept Technologies for $120 million. The company also announced
this week that it will acquire IntruVert Networks for $100 million.

Electric utilities company
AES Corporation
(
AES |
Quote |
Chart |
News |
PowerRating), +17.50% at 4.70, rallied after announcing a
refinancing plan that will offer $1 billion in private notes.

Auto and truck part company
Aftermarket Technology Corp.
(
ATAC |
Quote |
Chart |
News |
PowerRating), -29.57% at 8.19, sold off after
saying it will no longer manage AT&T Wireless’ collateral printing.

Also in the chip sector,
Stmicroelectronics
(
STM |
Quote |
Chart |
News |
PowerRating), -4.91% at 18.76, guided lower for the first
quarter with new revenue estimates of $1.618 million vs. previous estimates of
$1,620million.

Restaurant company
Applebee’s
(
APPB |
Quote |
Chart |
News |
PowerRating), -2.05% at 27.63, was downgraded by Merrill Lynch to
“neutral” from “buy”.

Entertainment giant America
Online
(
AOL |
Quote |
Chart |
News |
PowerRating),+2.57% at 11.55, had its earnings estimates raised by
Merrill Lynch due to stronger operating results. in the company’s film, network
and online divisions.

In the biotech sector
Affymetrix
(
AFFX |
Quote |
Chart |
News |
PowerRating), -34.53% at 18.33, issued a profit warning, and now
sees revenues coming in between $60-62 million vs. a previous estimate of
between $71-73 million.

Software maker PeopleSoft

(
PSFT |
Quote |
Chart |
News |
PowerRating), -8.96% at 15.02, issued a first-quarter profit warning,
and now expects to earn $0.11-0.12 vs. a consensus of $0.14.

Also in the software business,
Mercury Interactive
(
MERQ |
Quote |
Chart |
News |
PowerRating), -2.39% at 31.42, had its estimates cut by
Goldman Sachs based on PeopleSoft’s profit warning.

Insurer Aetna
(
AET |
Quote |
Chart |
News |
PowerRating),
-2.08% at 48.35, was upgraded by Prudential to “buy” from “hold”.

Financial services company
New Century Financial
(
NCEN |
Quote |
Chart |
News |
PowerRating), -0.23% at 33.62, announced that it
expects to beat its first-quarter earnings consensus due to record loan
production volume.

Home builder Beazer Homes
(
BZH |
Quote |
Chart |
News |
PowerRating), -2.23% at 61.30, was downgraded by Deutsche Securities to “hold” from
“buy”.

In the pharmaceutical sector,
Pfizer
(
PFE |
Quote |
Chart |
News |
PowerRating), +1.54% at 32.80, announced favorable results for its
anti psychotic drug Ziprasidone.

Communications services company
Research In Motion
(
RIMM |
Quote |
Chart |
News |
PowerRating), +2.90% at 14.88, beat its fourth-quarter
earnings estimates by $0.05 with profits of $0.07 per share.

danielb@tradingmarkets.com

Why Institutions Are Watching Closely Here

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