Big Earnings After The Close…
Stocks fell Wednesday after yesterday’s merger rally. The market
chopped around early on and the down move picked up steam later in the day.
Disappointing housing numbers — which fell 7.9%, the lowest
since August — set the tone early on. Bad weather was cited for the lower
number of housing starts.
The
largest specialist firm on the NYSE, LaBranche & Co
(
LAB |
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PowerRating), has
settled investigations into possible floor-trading abuses and will pay a fine of
$63.5 million for violations over the last 10 years. Five firms total have
agreed to pay $155 million in restitution for front running, plus $85 million in
fines.
Metro-Goldwyn-Mayer
(
MGM |
Quote |
Chart |
News |
PowerRating) reported higher fourth-quarter earnings of $60.3, with strong DVD
sales. Revenue fell to $543.1 million.
Broadcom
(
BRCM |
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News |
PowerRating)
rose after saying it would discuss a “stronger business outlook” this afternoon,
and some analysts said the company would raise its forecasts. Rambus
(
RMBS |
Quote |
Chart |
News |
PowerRating)
rose after a judge threw out charges that the company illegally monopolized key
computer chip technologies.
Warren Buffett has decided to
invest in Cadbury Schweppes
(
CSG |
Quote |
Chart |
News |
PowerRating) after the confectioner reported
lower earnings. Revenue rose to $12.3 billion with net profit at $699 million. Buffett
will invest $73.3 million for a 0.5% stake in the company, making him one of the
top 10 institutional investors in CSG.
United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating)
had a nice rally into the close; the company increased its weighting in the S&P
500 by 9.5% via conversion of some preferred stock to common stock.
After the close, Applied
Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) reported Q1 pro forma 0.12 vs 0.08 estimate, beating
estimates. Net income was $82 million or 0.05/share. New orders rose 32%; sales
rose 48% from last year’s levels to $1.56 billion.
| Dow | -42.89 |
10671.99 |
| S&P 500 |
-5.17 | 1151.82 |
| Nasdaq | -3.88 | 2076.47 |
The day’s leading sectors were
Hardware
(
HWI.X |
Quote |
Chart |
News |
PowerRating) +1.24%, Biotechs
(
BTK.X |
Quote |
Chart |
News |
PowerRating) +1.24%,
Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating) +0.97%, and Disk Drives
(
DDX.X |
Quote |
Chart |
News |
PowerRating) +0.77%.
Weak today were Amex Gold
Bugs
(
HUI.X |
Quote |
Chart |
News |
PowerRating) -4.74%, and Gold and Silver
(
XAU.X |
Quote |
Chart |
News |
PowerRating) -4.57%,
Economic news releases included
lower housing starts at 1.903 million and 1.899 million building permits.
10-year Notes were -005
at 114 250
The dollar
was +0.99 at 86.01
Gold was -3.57 at 411.73
Crude Oil was -0.46 at
34.48
Volume was
1,368,175,000 on
the NYSE, and 1,762,553,000 on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 1289 | Up Vol 450 |
| Declining | 2001 | Down Vol 905 |
| Ratio | 1.55 | 2.01 |
| Nasdaq | ||
| Advancing | 1325 | Up Vol 749 |
| Declining | 1873 | Dow Vol 983 |
| Ratio | 1.41 | 1.31 |
Stocks in the news:
Drug manufacturer Biogen Idec
(
BIIB |
Quote |
Chart |
News |
PowerRating)
and Elan
(
ELN |
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Chart |
News |
PowerRating) soared 16% and 24%, respectively, on plans to apply in
mid-2004 for US clearance to market Antegren, for the treatment of multiple
sclerosis. The companies’ initial clinical testing has enjoyed success.
CS First Boston downgraded BellSouth
(
BLS |
Quote |
Chart |
News |
PowerRating) and SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating), joint owners of wireless
provider Cingular, to “neutral.” Until it is completed, the investment company
expects the AT&T Wireless
(
AWE |
Quote |
Chart |
News |
PowerRating) deal to drag down share prices, with
no significant savings until 2006.
Covad Communications
(
COVD |
Quote |
Chart |
News |
PowerRating)
reported a fourth-quarter net loss of $12.8 million on revenue of $105
million. For the next quarter, the company expects a loss of $15 million on
revenue of $108 million.