Will This Do It For The Semis?

February 20, 2003
Daniel Beighley

Stocks
are under water midday, as the market digests a host of economic data
which has been mostly disappointing. The chip sector is looking strong after
Merrill Lynch upgraded select stocks. Yesterday Morgan Stanley made a similar
move. We always look to the chips for new leadership in a trend, and the bulls
are now looking for the this as inspiration for a bigger move up. Volume is once
again on the light side.

In economic news, initial claims came in
at 402K vs. expectations of 385K; PPI came in at 1.6% vs. expectations of
0.3%; core PPI came in at 0.9% vs. expectations of 0.1%; the trade
balance showed a deficit of $44.2B vs. expectations of a deficit of $38.6B;
leading indicators were down 0.1% vs. an expected no change status; and
the Philadelphia Fed disappointed with a reading of 2.3 vs. expectations
of 11.

The 10-year U.S. Note
is +085 at 115 210.

The Dollar is -0.53 at
66.65.

Gold is +5.10 at 355.00.

Crude OilÂ -0.46 at
36.70.

Volume is at 604,340,000
on the NYSE, and at 755,752,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 1.22, and down
volume over up volume by a 1.69 ratio. Nasdaq declining issues over advancing
issues are at 1.07, and down volume is over up volume by a 1.46 ratio.

Big Dow losers are:

Stocks In The News:

Network company Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating), +2.75% at 5.672,
beat its earnings estimates by $0.03 with a loss ofÂ $0.11 per share.

Restaurant company CBRL Group
(
CBRL |
Quote |
Chart |
News |
PowerRating), -7.72% at
25.35, has guided lower for its third-quarter with expectations of $0.40-0.41
per share vs. previous expectations of $0.44 per share.

In the biotech sector Cephalon
(
CEPH |
Quote |
Chart |
News |
PowerRating), -6.37%
at 48.40, has guided lower for the first-quarter despite beating its
fourth-quarter estimates by $0.05 wit profits of $0.41 per share. The stock has
also been downgraded by Lehman to “equal-weight” from “overweight.”

Also in the biotech sector, Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating),
-7.81% at 35.18, announced European approval for its drug Amevive has been
delayed.

Retailer JC Penney
(
JCP |
Quote |
Chart |
News |
PowerRating), +4.07% at 19.18, beat
its fourth-quarter earnings estimates by $0.02 with profits of $0.68 per share.

Medical equipment maker Guidant
(
GDT |
Quote |
Chart |
News |
PowerRating), +3.02% at
35.49, has been upgraded by Morgan Stanley to “overweight” from “equal-weight.”

danielb@tradingmarkets.com

Will This Do It For The Semis?

BUY THE FEAR, SELL THE GREED

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