Will The Market Shrug?

March 19, 2002
Daniel Beighley

The major averages were off to
a positive start this morning, as price action trended higher for most of the
session, though the trend turned down when an FOMC announcement sent
prices lower into the close. The three major indexes made slight gains on the
day, as Japan issues, computer hardware, and broker/dealer stocks closed with
the biggest gains, and airline, networking, and biotechnology stocks were the
deepest in the red.

Today’s main economic event
came in the announcement that the Federal Reserve Board will not adjust interest
rates. The fed funds rate remains at 1.75%, which is a 40-year low. Also, the
U.S. trade number for January showed a $28.5 billion deficit, exceeding the
$26.9 expected.

Market breadth was slightly
positive, with NYSE advancing issues over declining issues by a ratio of 1.20,
and up-volume over down-volume by a 1.41 ratio. Nasdaq advancing issues over
declining issues came in at 1.06, and down-volume beat up-volume by a 1.04
ratio. The
VIX
was down 0.40 to 20.35. The TRIN
was up 0.84 to 0.26.

Average volume on the NYSE and
below average volume on the Nasdaq kept the Dow and the S&P 500 in their
tight consolidations, as the Nasdaq closed in "doji" formation just
under its 50-day moving average. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
up 0.69%, made an inside day. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up
1.88%, managed to close above its consolidation.

Media technology company Gemstar-TV Guide
International (GMST),
down 26.18 at 15.04, announced a fourth quarter loss and said it would take a
write-down for amortization of goodwill of up to $5 billion for the current
quarter.

Computer hardware company Hewlett-Packard
(HWP),
down 2.33% at 18.80, announced that based on a preliminary estimate of
shareowner proxies, it believes it has received sufficient votes to approve its
merger with Compaq Computer (CPQ),
up 7.52% at 11.14. The company acknowledged, however, that this is not an
official vote and finality may not be achieved for a few weeks.

Consumer product giant Procter & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating), up 2.60% at
89.94, gave the Dow a boost in early trading when it said that strong growth and
cost cutting will enable the company to beat current fiscal third quarter
earnings estimates.

Elsewhere in the household product industry, Colgate-Palmolive
(
CL |
Quote |
Chart |
News |
PowerRating),
up 0.79 at 56.88, said it expects to meet first quarter and full-year earnings
estimates. The company will present at Merrill Lynch’s Global Branded Products
Conference this Wednesday. Dial Corp
(
DL |
Quote |
Chart |
News |
PowerRating), up 3.87% at 17.69, said
that it expects to beat current first quarter expectations and reaffirmed
guidance for the year. Clorox [CLX|CLX[, up 0.04 at 44.44, said that
despite weakening in its Latin American market, it expects to meet fiscal third
quarter and profit guidance for the year.

Investment services company Goldman Sachs
(
GS |
Quote |
Chart |
News |
PowerRating), up 2.07% at 91.05,
announced first quarter earnings that exceeded expectations as Bank of America
initiated coverage of the stock with a Buy rating.

Bank of America also initiated coverage on other stocks in the financial
sector, claiming that the industry will grow and valuations will expand relative
to the market. These stocks include Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating), up 2.71% at
55.98, with a "Strong Buy", and Morgan Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating), up
1.86% at 57.88, with a Market Perform.

From TM’s Proprietary
Implosion List, electric utilities company First Energy Corp
(
FE |
Quote |
Chart |
News |
PowerRating)
fell 7.9% at 32.25. There is no news released on the stock.

Will The Market Shrug?

BUY THE FEAR, SELL THE GREED

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