Why Today’s Daily Bar Is Significant

August 22, 2003
Vincent Mao

Stocks fell
Friday. The high tick for the S&P and Dow
was at the opening bar, after
Intel’s higher third quarter revenue guidance caused a gap open. The $SOX made a
high at 10:00 AM and it was all downhill from there. Intel raised its third quarter sales forecast to between $7.3 to $7.8
billion from $6.9 to $7.5 billion. Better-than-expected quarterly results from
retail issues: Nordstorm
(
JWN |
Quote |
Chart |
News |
PowerRating), Gap
(
GPS |
Quote |
Chart |
News |
PowerRating), and Borders Group
(
BGP |
Quote |
Chart |
News |
PowerRating)
also lent support. The
9,500 level marked an important level of resistance for the Dow. The Diamonds
and SPDRs made an outside reversal day, and the QQQs closed in a bearish dark
cloud cover pattern. Intel and the SMHs also closed in bearish-looking bars.
Bonds rallied, with the ten-year gaining over point, and the dollar rose to a three-month high.

The 10-year U.S. Note
was +155 at 111 065.

The dollar was +0.23 at
98.84.

Gold was +1.40 at
363.30.

Crude Oil was -0.12 at
31.84.

Volume was
1,306,038,000on
the NYSE, and 1,684,501,000 on the Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by 2.12, and down over up
volume by 3.05. Nasdaq declining issues over advancing issues at 1.96, and down
volume over up volume at 1.23.

Top Dow stocks were:

Stocks in the news:

Drafting software maker
Autodesk
(
ADSK |
Quote |
Chart |
News |
PowerRating) gained 9% after the company reported its second
quarter earnings grew 190%. Late yesterday, the maker of the popular AutoCad,
reported earnings of 29 cents a share compared to 10 cents a share in the year
ago quarter. Revenues rose from $211.4 million to $211.7 million. Most of the
rise in earnings was due to a $19.7 million tax benefit. Without it, Autodesk
would have earned 11 cents a share. Looking ahead, the company sees third
quarter revenues between $216 to $221 million and earnings between 13 to 16
cents a share. Currently consensus estimates are calling for 15 cents a share.

Semiconductor giant Intel

(
INTC |
Quote |
Chart |
News |
PowerRating) rose $1.00 after the company lifted its third quarter
revenue guidance. The world’s largest chipmaker raised its sales outlook from
between $6.9 to $7.5 billion to $7.3 to $7.8 billion. Intel CFO raised revenue
its revenue target due to strength in its chips, chipsets, and motherboards
businesses. However, he added that demand for communications products remains
soft. Intel also lifted its gross margin forecast to 56 percent from 54
percent.

Retailer Nordstorms
(
JWN |
Quote |
Chart |
News |
PowerRating)
gained more than 4% after the company reported quarterly results that
topped analysts’ expectations. The clothing retailer reported second quarter
earnings of 48 cents a share compared to 27 cents a share in the year ago
quarter. Analysts had expected the company to earn 39 cents a share. The company
also upped its third quarter and full year results to between 16 to 20 cents a
share and $1.33 to $1.37 a share.

Drug maker Schering Plough

(
SGP |
Quote |
Chart |
News |
PowerRating) fell 9% after the company announced a number of cuts. Late
yesterday, the company warned that earnings for the rest of the year and
thorough 2004 would likely fall. The company also cut its quarterly dividend
from 17 cents a share to 5.5 cents a share. In addition the company is expected
to cut more than 1,000 jobs and has also launched a voluntary retirement
program.

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

Vincent Mao

vincentm@tradingmarkets.com

Why Today’s Daily Bar Is Significant

BUY THE FEAR, SELL THE GREED

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