Why You Should Watch The Biotechs

April 8, 2003
Daniel Beighley

The
major indexes ended the session slightly down, as price action held
narrow ranges with a short-lived boost on news Saddam Hussein had been killed.
It is not clear at this time whether or not the Iraqi leader is alive. Lagging
today were the semiconductors on a string of bad news from Microchip, Marvell,
and RF Microdevices. On a positive note, banks were some ofÂ the big
winners, as well as biotech, which was highlighted by TM’s Kevin
Haggerty this morning. Issues that go against the grain of the overall
market are showing strength, and are the ones to watch when everything moves up.
Yesterday’s action shows the Dow and S&P stalling out at their 200-day
moving averages, which has been a major barrier for this market.

In economic news, wholesale
inventories rose 0.3%, slightly ahead of estimates of 0.2%.

The Ten Year NoteÂ
was +180 at 114 080.

The US dollar was -0.58
at 100.90.

Volume was average,
with the NYSE coming in at 1,197,589,000 and the Nasdaq at 1,286,374,000.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.24, and down
volume over up volume by a 1.79 ratio. Nasdaq declining issues over advancing
issues came in at 1.25, and down volume beat up volume by a 2.37 ratio.

The
VIX
was -2.14 at 29.59. The TRIN
was +0.53 at 1.44.

Weakest in the Dow were:

Stocks in the news:

Restaurant company and Dow stock McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating), +0.25% at 15.84, was upgraded by CSFB to “outperform” from
“neutral”.

Tobacco company Altria Group
(
MO |
Quote |
Chart |
News |
PowerRating),
+3.37% at 30.00, was higher after it was announced a court put a temporary block
on Illinois collecting $3billion in a legal case.

Chip maker Microchip
(
MCHP |
Quote |
Chart |
News |
PowerRating),
-9.10% at 18.66, lowered its fourth-quarter earnings estimates to $0.16 per
share vs. consensus estimates of $0.17.

Restaurant company Ruby Tuesday
(
RI |
Quote |
Chart |
News |
PowerRating),
+4.85% at 18.80, posted earnings $0.01 ahead of expectations with profits of
$0.39 per share. The company said it expects fourth-quarter earnings to be
$0.37, a penny short of expectations.Â

Software
company Manhattan Associates
(
MANH |
Quote |
Chart |
News |
PowerRating), +3.09% at 20.63, issued profits
guidance for the first-quarter below the Multex consensus estimate. The company
expects to earn between $0.16-0.18 vs. the consensus of $0.22.

Also in the
software biz, Group 1 Software
(
GSOF |
Quote |
Chart |
News |
PowerRating), -14.62% at 15.06, sold off
after the company guided in line with expectations to earn $0.17-0.18 per share.

Discount retailer 99 Cents Only
(
NDN |
Quote |
Chart |
News |
PowerRating),
+5.48% at 28.25, raised its estimates for the first quarter with revenue
expected to be $196.4 million vs. previous estimates of $187 million.

Exercise equipment maker Nautilus Group
(
NLS |
Quote |
Chart |
News |
PowerRating), -24.89% at 11.11, lowered its first-quarter earnings expectations to
$0.39-0.42 per share vs. a consensus of $0.65 per share.

Waste management services
company Stericycle
(
SRCL |
Quote |
Chart |
News |
PowerRating), -5.33% at 37.08, was downgraded by
Merrill Lynch to “neutral” from “buy”.

Broadcasting and cable TV company
Cablevision
(
CVC |
Quote |
Chart |
News |
PowerRating), -3.02% at 19.88, was downgraded by JP Morgan to
“neutral” from “overweight”.

Healthcare facilities company Accredo
Health
(
ACDO |
Quote |
Chart |
News |
PowerRating), -43.74% at 14.29, lowered its 2003 earnings estimates to
between $1.20-1.25 per share vs. a consensus of $1.37per share.

Medical equipment and supplies company Varian
Medical
(
VAR |
Quote |
Chart |
News |
PowerRating), +10.25% at 52.37, raised its second-quarter earnings
guidance to $0.46-0.48 per share vs. previous estimates of $0.42.

danielb@tradingmarkets.com

Why You Should Watch The Biotechs

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