Will We Rally Into The Weekend?

February 14, 2003
Daniel Beighley

Despite a strong rally attempt early in the session, the major
indexes are wavering in unchanged territory midday as the UN Security Council
updates its position on Iraq. Earnings news was on the bright side, with chip
makers Analog Devices and Nvidia coming in with positive postings, and helping
the semiconductor index to establish upside leadership. The markets have yet to
find a stimulus to reverse its strong downtrend, and traders are giving much
consideration to the possibility that war may breakout over the weekend.

In economic news, business inventories
came in at 0.6% vs. expectations of 0.2%, industrial production came in
at 0.7% vs. expectations of 0.3%, capacity utilization came in at 75.7%
vs. expectations of 75.6%, and Michigan Sentiment came in at 79.2 vs.
expectations of 81.9.

The 10-year U.S. Note
is -110 at 115 005.

The Dollar is +0.38 at
100.10.

Gold is -5.50 at 351.90.

Crude OilÂ +o.44 at
36.80.

Volume is at 660,502,000
on the NYSE, and at 698,207,000 on the Nasdaq.

Market breadth is positive,
with NYSE advancing issues over declining issues by a ratio of 1.06, and up
volume over down volume by a 1.16 ratio. Nasdaq advancing issues over declining
issues are at 1.13, and up volume over down volume is at a 2.49 ratio.

Leading the Dow to the downside are:

Stocks In The News:

Personal computer maker Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating),
+7.76% at 25.05, met its fourth-quarter estimates and was upgraded by First
Albany to “buy” from “neutral.” The company’s net profit is up 32% from a year
ago.

Chip maker Analog Devices
(
ADI |
Quote |
Chart |
News |
PowerRating), +7.71% at
25.72, beat its first-quarter earnings expectations by $0.01 with profits of
$0.17 per share. The company has also been upgraded by Bank of America to
“neutral” from “sell.”

Also in the chip biz, Nvidia
(
NVDA |
Quote |
Chart |
News |
PowerRating), +17.12% at
11.56, reported earnings ahead of Wall Street expectations, and was subsequently
upgraded by several brokerages.

Broker Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating), +1.04% at 33.10, has
had its price target raised by Prudential to $44 citing the stock’s tendency to
rebound when trading below 1.5x book.

Retailer Sears
(
S |
Quote |
Chart |
News |
PowerRating), -2.41% at 21.06, is the
subject of a negative Business Week report which claims the company’s
credit card business may pose big problems for the company.

Doughnut maker Krispy Kreme Doughnuts
(
KKD |
Quote |
Chart |
News |
PowerRating),
+8.20% at 30.73, has reaffirmed its 2003 guidance, and has raised its estimates
for 2004.

Software maker Intuit
(
INTU |
Quote |
Chart |
News |
PowerRating), +3.58% at 43.16,
beat its second-quarter earnings expectations by $0.04 with profits of $0.61 per
share.

Security systems company Invision
(
INVN |
Quote |
Chart |
News |
PowerRating),
+2.19% at 23.76, beat its fourth-quarter earnings expectations by $0.16 per
share with profits of $2.40 per share. The company also guided higher for the
first-quarter.

Tool maker Black & Decker
(
BDK |
Quote |
Chart |
News |
PowerRating), +0.35% at
34.86, has had coverage initiated on it by JP Morgan at “overweight.”

In the biotech sector, Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating), -1.56% at
36.98, has adjusted its 2002 results to reflect a legal settlement with Berlex
to whom it will pay $55 million. It is also being reported that the company’s
interferon drugs have been proven to have no effect beyond one year.

danielb@tradingmarkets.com

Will We Rally Into The Weekend?

BUY THE FEAR, SELL THE GREED

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