Why The Bear Case Is Hard To Argue…

November 15, 2002
Daniel Beighley

Despite downgrades on key Dow components, a mixed bag of economic
data, and a terrorist warning from the FBI, the markets showed some strength
today as the Dow and S&P 500 posted modest gains, and the Nasdaq a slight loss.
Price action drifted south in early action, consolidated mid-day, and rallied in
the afternoon. Semiconductors stood out, as downgrades in the sector by Merrill
inspired an early sell-off, though aggressive buyers countered with a strong
move into the close. As long as this market continues to shrug off bad news,
it’s hard to argue the bear case for this market, though short term technical
indications are suggesting a downturn could be in store. Be sure to refer to
TM’s

market bias for new daily VIX signals.

In economic news, the
University of Michigan’s consumer sentiment index advanced to 85.0 from a
reading of 80.6 in October. The producer price index increased 1.1% vs.
an expected -0.2%. The core PPI was up 0.5% vs. an expected 0.1%.
Capacity utilization came in at 75.2% vs. an expected 75.5%. And,
industrial production posted a -0.8% decrease vs. an expected -0.4%.

The 10-year U.S. Note
was +070 at 113 235.

The Dollar was +0.23 at
105.19.

Volume was slightly below
averageÂ at 1,359,237,000 on the
NYSE, and 1,671,724,000
on the Nasdaq.

Market breadth was mostly positive,
with NYSE advancing issues over declining issues by a ratio of 1.46, and up
volume over down volume by a 2.27 ratio. Nasdaq declining issues over advancing
issues came in at 1.11, and up volume beat down volume by a 1.50 ratio.

The

VIX was -1.77 at 30.83. The

TRIN was +0.17 at 0.63.

Leading the Dow were:

Stocks in the news:

Regional bank Fifth Third
Bancorp
(
FITB |
Quote |
Chart |
News |
PowerRating), -7.80% at 57.65, plunged after the company announced it
was being investigated by federal regulators. The investigation concerns a $54
million asset impairment charge recorded in the third quarter.

Computer hardware maker
Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating), -15.03% at 3.56, also sold off after it was announced it
is the target of a SEC investigation over the company’s finances.

Also in the computer box-making
biz, Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), -3.61% at 2.82, slid after posting
earnings results in line with estimates.

Chip maker Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
-2.75% at 18.68, received a downgrade from Merrill Lynch to “sell” from
“neutral”.

Conglomerate General
Electric
(
GE |
Quote |
Chart |
News |
PowerRating), -2.61% at 23.86, has been downgraded by JP Morgan to
“underweight” from “neutral” on expectations of a “very messy” fourth quarter.

Retailer Kohl’s Corp.
(
KSS |
Quote |
Chart |
News |
PowerRating),
+5.00% at 66.90, beat its third-quarter earnings by $0.02 with profits of $0.39
per share.

And shipping company Federal
Express
(
FDX |
Quote |
Chart |
News |
PowerRating), -4.75% at 53.45, was downgraded by CSFB to “neutral” from
“outperform”.

Investment services company
Lehman Brothers
(
LEH |
Quote |
Chart |
News |
PowerRating), +1.97% at 57.86, announced it will eliminate 4%
of its workforce.

Why The Bear Case Is Hard To Argue…

BUY THE FEAR, SELL THE GREED

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