DELL Trading Down In After Market — Here’s Why

August 14, 2003
Brice Wightman

Stocks were
higher Thursday. The major indices
reversed early morning losses after the latest economic reports continued to
show stabilization in the job market and cooled off fears of deflation. For the
fourth consecutive week, initial jobless claims came in under the critical 400K
level. Meanwhile, its four-week moving average remained under 400K for the
second week. Producer prices at the core rate came in higher than expected, its
biggest rise since March. The Dow closed near the top of its two-month trading range
and was within 27 points from its July 31 high.

In economic news, Weekly
Jobless Claims rose by 2000 to 398K. Economist had expected a drop to 393K.
The less volatile four-week moving average fell to 394,250 from 398,500.
This was the lowest reading since mid-February. Producer prices in July
rose 0.1% as expected. However, the core rate rose by 0.2% vs. estimates of a
rise of 0.1%. The Trade Balance in June came in at -$39.5B vs. estimates
of -$42B.

The 10-year U.S. Note
was -065 at 110 100.

The dollar was +0.51 at
96.69.

Gold was +4.50 at
366.20.

Crude Oil was +0.25 at
31.03

Volume was
1,186,696,000 on
the NYSE, and 1,287,346,000 on the Nasdaq.

Market breadth was positive,
with NYSE advancing issues over declining issues by 1.49, and up over down
volume by 1.90. Nasdaq advancing issues over declining issues at 1.38, and up
volume over down volume at 1.56.

Top Dow stocks were:

Stocks in the news:

After the bell, Dell
Computer
(
DELL |
Quote |
Chart |
News |
PowerRating) reported fiscal second quarter profits of .24, inline,
and up from .19 a year ago, its fifth consecutive quarter of year over year
profit. The company also raised their 3Q guidance. DELL closed at 31.39, up
0.08, but at press time had traded slightly lower in aftermarket trading.

In other news, a major power
outage hit the East, affecting New York, New Jersey, Detroit, Cleveland, Toledo,
Toronto, and Ottawa. The Department of Homeland Security knows of no terror link
at press time. A fire was also reported at a Con Ed plant.

Women’s apparel retailer Ann
Taylor
(
ANN |
Quote |
Chart |
News |
PowerRating) was higher after the company reported second-quarter
results, in line with analysts’ estimates. In its latest quarter, the company
earned 45 cents a share, compared to 39 cents a share in the year-ago period.
Ann Taylor also raised its third-quarter forecast from between 39 to 41 cents a
share to 44 or 45 cents a share. ANN closed up 0.65 at 33.65.

Graphics chip maker ATI
Technologies
(
ATYT |
Quote |
Chart |
News |
PowerRating) rose after the company disclosed an
agreement with Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) to develop custom, leading edge graphics
technologies for next-generation XBOX consoles. According to Robbie Bach, senior
vice president of Microsoft’s Home and Entertainment Division Microsoft selected
ATI after determining that “ATI’s technical vision fits perfectly with the
future direction of XBOX.” Previously, NVIDIA
(
NVDA |
Quote |
Chart |
News |
PowerRating) supplied Microsoft
with XBOX’s graphic technologies.

Chip maker Texas Instruments

(
TXN |
Quote |
Chart |
News |
PowerRating) gained after Soundview upgraded the stock from
“neutral” to “outperform”. Soundview upped its rating on the world’s biggest
maker of chips in mobile phones as they believe that the industry is in a mild
to gradual recovery and that TI would be the best “proxy” for the industry. TXN
closed at 20.05, up 0.73.

The world’s largest fastfood
chain McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating) fell after Wachovia Securities
downgraded the stock from “outperform” to “market perform”. Wachovia based the
downgrade on valuation. The firm also believes that sales will begin to slow as
McDonalds is winding down its Big Mac and French fries promotions.

Retailer Target
(
TGT |
Quote |
Chart |
News |
PowerRating)
fell by 5% after the company reported second-quarter results that missed
analysts’ estimates by a penny. Target earned 39 cents a share compared to 38
cents in the year-ago quarter. Looking ahead, the company’s third-quarter
forecast is “more conservative” than analysts’ estimates of 34 cents a share.

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

Vincent Mao

vincentm@tradingmarkets.com

DELL Trading Down In After Market — Here’s Why

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