Debt Ratings Cut. That’s 2 Dow Components This Month!

Stocks were higher–the best day of the month on the
Dow–buoyed by lower oil and a report that showed the economy grew at
a steady pace in the fourth quarter.  The Nasdaq and SOX both closed above
their 200-day moving average after venturing below it briefly last week. 
Q4 final GDP was 3.8%, just off the 4.0% consensus. After-tax corporate profits
rose 12.5% in the fourth quarter, the largest increase in three years. This
compared with a decline of 4.2% in Q3.

Energy and materials stocks are well off their highs after a large run-up.

Fund flows for Q1 2005 were $32 billion; this compares with $69 billion for
the first quarter of 2004.

AIG said it will delay its annual filing for a second time, citing an
“extensive review” of its records. S&P cut AIG’s debt ratings to AA+ from AAA
and said they may cut them again, saying accounting errors raise questions about
the management’s integrity. This is the second Dow component to have its debt
rating reduced this month; GM’s debt was reduced last week.

According to Pfizer
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against Teva Pharmaceuticals
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generic version of Accupril–a Pfizer drug.

Airlines were strong today on lower oil. Merrill Lynch raised AMR and
FRNT to a ‘buy.’

Traders are looking toward the jobs number on Friday morning.

Strong sectors were:    Airlines
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Internet
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+2.31%   

Stocks in the News

Tetra Tech
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is trading down pre-open.

Micron Technology
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million profit. Shares are up pre-open.

Bristol Myers
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experimental coronary bypass product, E2F Decoy, did not meet goals in late
stage clinical trials. BMY is terminating its collaboration with CGTK.
Separately, BMY won approval for its hepatitis B drug, Baraclude.

Best Buy will delay its Q4 earnings report.

Michael’s Stores
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