A Billion-Dollar Judgment, Plus A 70% Dividend Increase

September 24, 2003
Brice Wightman

Stocks fell
Wednesday, in the biggest one-day drop since August 5,
as rising oil prices and worries over earnings
triggered broad-based selling. OPEC announced an oil production cut of 900K
barrels a day starting November 1st, citing concerns over Iraqi production. This
move was unexpected, as analysts widely anticipated no change after today’s
meeting. Oil service issues gained 2.2%. Crude oil for November delivery rose
1.18 to 28.31. Rising energy costs for companies and potentially slow the rate
of growth. Dow component Boeing
(
BA |
Quote |
Chart |
News |
PowerRating) fell 2.7% after the world’s largest
airplane maker said that they expect next year’s orders to be about the same as
this year’s levels. Medical device maker Biosite
(
BSTE |
Quote |
Chart |
News |
PowerRating) dropped 13% after
they lowered their fiscal 2003 forecast. Deutsche Bank also downgraded the stock
from “Buy” to “Hold”. Both the Dow and S&P took out their 20-day moving
averages at 9499 and 1020 respectively. Bonds rallied, the dollar fell, and gold
rose.

No economic reports today.

The 10-year U.S. Note
was +205 at 112 295.

The dollar was -0.35 at
93.64.

Gold was +4.70 at
389.50.

Crude Oil was +1.09 at
28.22.

Volume is
1,560,532,000
on the NYSE, and 2,212,944,000
on the Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by 1.95 and down over up volume
by 4.46. Nasdaq declining issues over advancing issues at 2.35, and down volume
over up volume at 4.60.

Top Dow stocks were:

Stocks in the news:

McDonald’s
(
MCD |
Quote |
Chart |
News |
PowerRating) will raise its
dividend by 70%, to .40/share. This brings it in-line with some other large
consumer products companies like Proctor and Gamble and Coca-Cola. In May,
Congress lowered the maximum tax on dividends, and since then, several companies
have raised their dividend rates.

Drug maker American
Pharmaceutical Partners
(
APPX |
Quote |
Chart |
News |
PowerRating) fell % after the company and its
privately held partner, American Biosciences’ experimental cancer drug, Abraxane
was found to be more effective and less toxic than Taxol. Taxol is widely used
to treat breast and ovarian cancer.

Biopharmaceutical company
Cell Therapeutics
(
HB |
Quote |
Chart |
News |
PowerRating) was lower after announcing positive results in
clinical trials of its Xyotax drug for ovarian cancer. The company said that
Xyotax with platinates showed a tumor response rate of 68%. The results support
the company’s current phase III trial of which the results will be released
later this year.

Chip maker ESS Technology
[ESST|ESST|] rose 3% after the company raised its third quarter outlook. Due
to stronger than expected demand, the maker of chips used in DVD, VCD, and other
digital media players now expects a smaller than expected loss. The company now
sees revenues between $44 to $48 million compared to its prior forecasts of $37
to $41 million. They now are expecting a loss between 8 to 13 cents a share
compare to its previous forecast of 13 to 18 cents a share.

Medical diagnostic device maker
Biosite
(
BSTE |
Quote |
Chart |
News |
PowerRating) is lower by 11% after the company warned the full
year 2003 results would come in below prior forecast. Due to weak sales of its
heart failure detection devices, the company now sees earnings between 38 to 41
cents a share compared to current consensus estimates of 44 cents a share.

If you have any comments or questions, please feel free to email me.

Brice
Wightman

bricew@tradingmarkets.com

A Billion-Dollar Judgment, Plus A 70% Dividend Increase

BUY THE FEAR, SELL THE GREED

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