Bucking The Trend Today…
Stocks sold
off sharply on moderate volume a day after the Fed raised interest rates by 25
basis points. A mixed bag of economic
data showed weekly initial claims thart rose to 351,000 with the ISM employment
index falling to 59.7 from 61.9 in May. Construction spending edged up a
disappointing 0.3%. Oil prices rose after Saudi Arabia said prices had come down
far enough. OPEC is expected to meet July 21 to discuss production targets, with
Saudi Arabia currently producing 9.1 million barrels a day.
Cardinal Health
(
CAH |
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PowerRating)
slashed its earnings outlook on lower margins and a slower growth rate. It now
expects to earn 94 cents for next quarter and $3.54 for FY 2004. Three
brokerages downgraded the stock on the news. Time Warner
(
TWX |
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PowerRating) made a
$3 billion offer to acquire MGM Studio
(
MGM |
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PowerRating) according reports from
The Wall Street Journal and The New York Times. Terms of the deal include an
offer price of $13 a share with the assumption of $2 billion worth of debt. CIBC
reaffirmed their outperform rating on Time Warner and raised its price target on
the stock to $22. CIBC expects TWX earnings to improve by at least 10%.
Research in Motion
(
RIMM |
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PowerRating)
is bucking the trend, trading at 71.41, up 2.96, as is Taser
(
TASR |
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PowerRating)
which landed a $3.6 million contract with the Houston Police Department.
In IPO action, managed care company WellCare (WCG) came at $17 and is
trading at $20. Recent IPOs have done well, including yesterday’s Lifetime
Fitness (LTM), up $2.81 from its offering price.
The average equity mutual fund was -0.3% for Q2; the average bond fund lost
2.5%.
| Dow | -109.43 | 10326.27 |
| S&P 500 | -13.46 | 1127.38 |
| Nasdaq | -31.60 | 2016.17 |
Strong today is Energy
(
DXE.X |
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PowerRating)
+0.82%
Weak today are Semis
(
SOX.X |
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PowerRating)
-4.24%, Disk Drives
(
DDX.X |
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PowerRating) -3.93% Networking
(
NWX.X |
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Chart |
News |
PowerRating)
-3.60%
Economic news release today:
Initial claims that rose to 351,000, construction spending that slowed down to
0.3% and ISM index that was lower at 61.1
10-year Notes are +5 at
109 100
The dollar
is +0.20 at 89.20
Gold is +2.60 at 395.55
Crude Oil is +1.10 at
38.15
Volume is 688 million on
the NYSE, and 899 million on the Nasdaq.
Market breadth is negative.
| NYSE | Issues | |
| Advancing | 1175 | Up Vol 109 |
| Declining | 1967 | Down Vol 543 |
| Ratio | 1.67 | 4.98 |
| Nasdaq |
||
| Advancing | 827 | Up Vol 114 |
| Declining | 2090 | Down Vol 745 |
| Ratio | 2.52 | 6.53 |
Top Dow stocks are:
McDonalds
(
MCD |
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PowerRating),
+1.03%, Coca Cola
(
KO |
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News |
PowerRating), +0.32%, American International Group
(
AIG |
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News |
PowerRating),
+0.18%,
Stocks in the news:
DRS Technologies
is up sharply on rumors that it rejected the $42/share takeover
bid by L-3 Communications
(
LLL |
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News |
PowerRating).
Smith Barney downgraded
Yahoo!
(
YHOO |
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PowerRating) to Hold but raised its
price target to $36.50 a share.
Boeing
(
BA |
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PowerRating) fell after Merrill
Lynch downgraded their rating to Neutral on valuation concerns due to an
uncertain demand for airline and defense modernization.
Emulex
(
ELX |
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Chart |
News |
PowerRating) fell
after cutting fourth-quarter earnings targets to EPS of 18 cents a share with
revenue near $85 million. JP Morgan and Merrill Lynch downgraded the stock on
the news.
Brice Wightman
bricew@tradingmarkets.com