AMD Blowout Earnings; Plus, Apple’s Results


Stocks closed slightly lower Wednesday, but after a decent trading session.


A gap lower at the open and a double bottom later in the day provided traders
with good opportunity.

Consumer prices rose sharply as energy
and clothing costs soared. The CPI index rose 0.5% in March, with exports up 4% — the biggest monthly increase since 1996. Interest-rate-sensitive stocks such as
homebuilders and banks continue to be weak on continued fears of an interest
rate hike.

Bank of America
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reported earnings that grew 11% to $2.68 billion with revenue up 7% at $9.69 billion.
The stock sold off, though, as a flattening yield curve is a negative for banks.

Dow component DuPont
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raised its profit outlook on strength in its agriculture and nutrition business.
It now expects earnings to reach 95 cents for the quarter and $2.20 for the
year.
Harley Davidson

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posted earnings of $204.6 million on revenue that rose
4.7% to $1.17 billion. Profits jumped 10%. The company left its 2004 motorcycle production target of
317,000 unchanged and reiterated its long-range goal of 400,000 in 2007.

Equity fund flows were the
largest since the end of January.

The American Automobile
Association said that the price of a gallon of regular gas hit another high —
at $1.783.

After the close, Advanced
Micro Devices

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reported Q1 of $0.12 vs a $0.04 estimate, on
revenues of $1.24 billion vs $1.2 estimate. A year ago revenues were $714
million.  Net income was $45 million vs a loss a year ago. For Q2 the
company said sales would be lower in computational products but higher in the
memory group. Apple Computer
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reported $0.14 vs. $0.10 on
$1.19 billion revenue and $46 million net income. iPod shipments rose 900% to
807,000 units. The company raised Q3 revenue estimates to $1.9 and earnings to
$0.12 – $0.13 from 0.09. SanDisk
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  beat by0.02 and guided
Y04 higher. Lam Research
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beat by 0.03 on 73% higher revenues.
Redback Networks
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missed by a penny. Rambus
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was in-line after a one-time gain, and Texas Instruments
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was
also in-line and guided higher. Revenue rose 34%.

Dow -3.33
10377.95
S&P 500
-1.27
1128.17
Nasdaq -5.23
2024.85

The day’s leading sectors were
Pharmaceuticals

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+1.53%,
Disk Drives

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+1.41% Airlines
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+0.78%,
Chemicals

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+0.97%, and Biotechs
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+0.58%.

Weak today were Gold
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-2.08%, and Healthcare
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-1.84%
and Banks
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-1.33%.

Economic news releases today
included CPI rising +0.5% and the US trade deficit narrowing to $42.1 billion.

10-year Notes were -100 at
111 080

The dollar
was +0.33 at 90.16

Gold was -6.54 at 399.35

Crude oil was -0.30 at
36.42

Volume was
1,548,003,000 on
the NYSE, and
1,844,008,000 on the Nasdaq.

Market breadth was negative.

NYSE Issues
Advancing
749 Up Vol 470
Declining 2626 Down Vol 1039
Ratio 3.50 2.21
Nasdaq
Advancing
1252 Up Vol 750
Declining
1953 Down Vol 1034
Ratio 1.55 1.37

Stocks in the news:

Take-Two Interactive
Software

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will post a quarterly loss of 15 cents a share on
revenue of $170 million. News of CEO Jeffrey Lapin’s resignation and the company
cutting its earnings forecast sent TTWO down 11%.

Georgia-Pacific
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is expecting higher earnings of 60 cents on strong performance of its building
products.

McDonalds
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posted an 11.5%
increase in sales on strong domestic revenue. US same-store sales were +9.9%,
but European sales were +2.9%.

Brice Wightman

bricew@tradingmarkets.com