Will These Earnings Turn Us Around?

January 16, 2003
Daniel Beighley

The
major indexes turned in negative performances today, as price action
held downtrends from bell to bell. Bearish words from the Philly Fed seemedÂ
to keep buyers at bay, as the earnings parade failed to inspire despite Dow
component UTX Corp. coming in with an upside surprise. The Nasdaq closed just
below its 200-day moving average, joining the Dow and S&P 500, as they are
all now sandwiched between their major averages.Â

In economic news, initial
claims came in at 360K vs. an expected 395K, core CPI came in at
-0.3% vs. expectations of 0.1%. CPI came in at 0.1% vs. an expected 0.2%.
And the Philadelphia Fed came in at 11.2 vs. an expected 9.0.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was -010 at 113 095.

The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) wasÂ -0.57 at 101.12.

Volume was average,
with the NYSE coming in at 1,428,556,000 and the Nasdaq at 1,546,689,000.

Market breadth was mostly
negative, with NYSE advancing issues over declining issues by a ratio of
1.15, and down volume over up volume by a 1.29 ratio. Nasdaq declining issues
over advancing issues came in at 1.21, and down volume beat up volume by a 3.32
ratio.

The
VIX
was -0.19 at 27.67. The TRIN
was -0.31 at 1.47.

Leading the Dow lower were:

Stocks in the news:

In the semiconductor sector, QLogic
(
QLGC |
Quote |
Chart |
News |
PowerRating),
-8.86& at 38.12, said that earnings were up 62% from a year ago, though was
downgraded by U.S. Bancorp to “underperform” from “market perform.”

Restaurant company and Dow component McDonald’s
(
MCD |
Quote |
Chart |
News |
PowerRating),
-5.03% at 15.85, new CEO announced he would limit growth worldwide, and fix
marketing plans in an effort to turn the company around.

Conglomerate United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), +2.81%
at 66.21, said that fourth-quarter earnings grew 54% from a year ago, due in
part from new accounting rules that eliminate goodwill as amortization.

Internet portal Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating),
-4.23% at 18.75, has beat its fourth-quarter earnings expectations by $0.02 with
profits of $0.08. The company has guided in-line for the full year 2003, though
has been downgraded by CSFB to “underperform” from “neutral”
due to valuation.

Biotech firm Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating),
+11.36% at 39.21, has met its fourth-quarter earnings estimates, and has
reported stronger sales. The company has been upgraded by Thomas Weisel to
“buy” from “attractive”, and is up over 4% in the
pre-market.

In the drug making business, Abbott
Labs
(
ABT |
Quote |
Chart |
News |
PowerRating), +3.29% at 39.20, has missed its fourth-quarter earnings
expectations by $0.01 with profits of $0.55 per share. The company has also
lowered guidance for the full year 2003, IDEC Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating),
+7.98% at 36.09, has pre-announced its fourth-quarter earnings $0.04 above
expectations with profits of $0.26 per share, and Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating),
-2.23% at 53.43, has beat its third-quarter earnings expectations by $0.02with
profits of $0.47 per share.

In the software sector, Symantec
(
SYMC |
Quote |
Chart |
News |
PowerRating), +3.36% at 47.60, has beat its third-quarter earnings expectations
by $0.08 with profits of $0.47 per share.

Also in the retail sector, Federated
Department Stores
(
FD |
Quote |
Chart |
News |
PowerRating), +0.96% at 30.19, announced that it does not
expect business to pick up in 2003.

Money center bank Bank One Corporation
(
ONE |
Quote |
Chart |
News |
PowerRating),
+1.34% at 38.40, reported that its earnings rose 55% due to credit losses as net
charges falling 13%, and non-performing loans falling 7.6%. And, FleetBoston
Financial
(
FBF |
Quote |
Chart |
News |
PowerRating), +0.32% at 27.46, rose after it reported that it made a
profit for the year, recovering from last years losses brought on by Argentina’s
crisis.

Air carrier Delta Airlines
(
DAL |
Quote |
Chart |
News |
PowerRating), unchanged at
12.75, reported a smaller than expected loss for the fourth-quarter, as revenues
rose 16%.

Aerospace and defense company Boeing
(
BA |
Quote |
Chart |
News |
PowerRating),
+0.32% at 33.46, rallied on news that it won a $3 billion contract from Virgin
Blue, beating out rival Airbus.

Computer hardware maker Apple
(
AAPL |
Quote |
Chart |
News |
PowerRating), +1.17%
at 14.60, sold off after reporting its second quarterly loss in a row.

danielb@tradingmarkets.com

Will These Earnings Turn Us Around?

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources