Why These Three Brokers Are Smiling…

July 1, 2003
Vincent Mao

Stocks
were higher Tuesday. Worse-than-expected economic data knocked down the major averages
early on, but a 1,2,3 setup just before 11 AM set the stage for a nice rally.
Both the ISM Manufacturing Index and the report on construction spending came in
much weaker than expected. This morning’s selloff caused the major averages to
briefly break below the neckline of their mini head & shoulders patterns. The
indices bounced off a trendline drawn from the March 12 lows. Bonds, gold and
the dollar were all lower today.

In economic news, the ISM
Manufacturing Index for June came in at a reading of 49.8 vs. estimates of
51.3. The index did rise from May’s 51.3 reading. This was the fourth
consecutive reading under 50. Construction Spending in May dropped by
1.7% vs. estimates of a rise of 0.3%. The Bank of Tokyo-Mitsubishi/UBS US Chain
Store Sales index fell by 0.5%.

The 10-year U.S. Note
was -08 at 117 03

The dollar was -0.46 at
94.65.

Gold was -5 at 351.20.

Crude Oil was -0.09 at
30.31.

Volume was
1,456,653,000
on the NYSE, and 1,707,307,000 on the Nasdaq.

Market breadth was positive, with NYSE
advancing issues over declining
issues by a ratio of 1.56, and up volume over down volume by a 1.70 ratio. Nasdaq
advancing issues over declining issues at 1.13, and down volume over up volume
is at a 2.26 ratio.

Top Dow stocks were:

Stocks in the news:

Aetna
(
AET |
Quote |
Chart |
News |
PowerRating) traded higher
on a Banc of America Securities upgrade from
“neutral” to “buy, ” basing the upgrade on the company’s strong growth prospects
and the belief that it will continue to build market share in 2004. B of
A also raised its fiscal 2003 and 2004 estimates to $5 from $4.20 and $6 from
$4.85, respectively.

LSI Logic
(
LSI |
Quote |
Chart |
News |
PowerRating) rose
on a Morgan Stanley upgrade from “underweight” to “equalweight”.
Morgan based the upgrade on the company’s “right sizing” efforts. Yesterday LSI
announced that revenues for the second quarter would be on the high end of
estimates but earnings would be negatively impacted due to the sale of a
Japanese manufacturing plant.

Starbucks
(
SBUX |
Quote |
Chart |
News |
PowerRating) was
higher after Smith Barney upgraded the stock from “inline” to
“outperform”. Smith Barney based the upgrade on the belief that the coffee
retailer could surpass Wall Street estimates by 5 to 6 percent and said that
Starbuck’s same-store sales trend “remain the best of any company we cover.”

Cheesecake Factory
(
CAKE |
Quote |
Chart |
News |
PowerRating)
was lower on heavy volume after Smith Barney downgraded the stock from
“inline” to “underperform”. Smith Barney also reduced the restaurant chain’s
second quarter by a penny to 29 cents a share.

Millennium Pharmaceuticals

(
MLNM |
Quote |
Chart |
News |
PowerRating) traded lower on heavy volume. Investors are
reacting negatively to the company’s partnership with a Johnson & Johnson unit
for its Velcade cancer therapy.

Please feel free to email me
with any comments or questions.

Vincent Mao

vincentm@tradingmarkets.com

Why These Three Brokers Are Smiling…

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources