Why Today’s Dow Close Was Significant

June 16, 2003
Vincent Mao

Stocks
were sharply higher across the board Monday. The major indices were all higher by better than
2%, with the Dow closing over 9300 for the first time since July 2002. The SPX closed over 1000. Bonds
were lower today after earlier session highs.Â Merrill Lynch downgraded the
hardware sector to “underweight” and upgraded the software sector to “equal
weight.” Gold was slightly higher.

Weak today was Oil Services

(
$OSX.X |
Quote |
Chart |
News |
PowerRating), -1.68%.

In economic news, the Empire
State Index for June came in at a reading of 26.8 far besting expectations
of a reading of 8.8. This much better than expected reading could also point to
a higher Philly Fed index which will be due out on Thursday.

The 10-year U.S. Note
was -175 at 120 010.

The dollar was -0.03 at
92.22.

Gold was +0.20 at
359.90.

Crude Oil was +0.48 at
31.13.

Volume was
1,307,028,000
on the NYSE, and 1,867,543,000 on the Nasdaq.

Market breadth was very positive, with NYSE advancing issues over declining issues by a ratio of 2.49,
and up volume over down volume by a 4.83 ratio. Nasdaq advancing issues over
declining issues at 1.64, and down volume over up volume is at a 2.07 ratio.

Top Dow stocks were:

Stocks in the news:

After the close, Tyco
(
TYC |
Quote |
Chart |
News |
PowerRating)
was halted, pending news.

American Express
(
AXP |
Quote |
Chart |
News |
PowerRating)
was higher after it announced that it agreed to purchase Threadneedle
Asset Management from Zurich Financial Services for $570 million. Threadneedle
is to continue management of some of Zurich’s British assets for up to eight
years.

Best Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) rose
after it announced the sale of it lagging MusicLand Group. In a cash free deal, an affiliate of Sun Capital will buy all
of Musicland Group’s capital stock. It will also take on all of MusicLand’s
liabilities and obligations.

CheckPoint Software
(
CHKP |
Quote |
Chart |
News |
PowerRating)
was higher after Lehman Brothers upgraded the stock from “equal weight” to “over
weight”. Lehman also upped its price target to $25 from $18.

E-loan
(
EELN |
Quote |
Chart |
News |
PowerRating)
gained after raising second quarter
and full year guidance. The company is now expecting second quarter results
between 8 to 11 cents a share on revenues of $42 million compared with earlier
estimates of 8 cents a share on revenues of $39.5 million. The company is
expecting full year result of 35 cents a share on revenues of $155 million up
from previous estimates of 27 cents a share on revenues of $144 million.

Priority Healthcare
(
PHCC |
Quote |
Chart |
News |
PowerRating)
fell on heavy volume after the company warned that full year results
will come in below expectations. The company expects between $1.16 to $1.22 a
share on revenues between $1.43 and $1.48 billion, consensus estimates were
looking from $1.29 a share. PHCC clsoed at 18.22, down 1.28.

Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating) was higher
on heavy volume after Soundview upgraded the company from
“Neutral” to “Outperform”. Soundview said that “Yahoo is in the sweet spot of
the Internet right now,” and that the streak of earnings upside will
continue into 2004.

vincentm@tradingmarkets.com

Why Today’s Dow Close Was Significant

BUY THE FEAR, SELL THE GREED

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