Greenspan Is Serious–Are You?

  • November 19, 2004
  • Brice Wightman

Stocks were broadly lower this
options expiration Friday on a spike in
oil and a weak dollar triggered by Greenspan’s comments. Greenspan said
that eventually foreign investors will stop financing the US current account
deficit, and that rates would have to rise.

Note the possible head and shoulders pattern in
bonds:

It was the weakest performance in a month–with
the Dow down triple digits–as interest rate sensitive stocks were hit hard, as
were technology stocks. For the week, Nasdaq winners were Hardware, +2% and
Semis, +2.5%; losers were Biotech, -4% and Internet, -4%.

Disney (DIS)
beat by a penny; profits rose 24%; revenue was $7.54 billion, up 8% from a
year ago. CFO Tom Staggs said the company expects double-digit growth for the
next few years.

Drug stocks were in focus after a US health
official said drugs manufactured by Pfizer
(
PFE |
Quote |
Chart |
News |
PowerRating) (Bextra) and Abbott
(
ABT |
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PowerRating)
(Meridia) needed closer scrutiny. Also, safety concerns were raised on Astrazeneca’s
(
AZN |
Quote |
Chart |
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PowerRating) Crestor and GlaxoSmithKline’s
(
GSK |
Quote |
Chart |
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PowerRating) Serevent.

Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating) and OSI
Pharmaceuticals
(
OSIP |
Quote |
Chart |
News |
PowerRating) said that its lung cancer drug Tarceva received
FDA approval–in only 3.5 months. Price: $2000 for a 1-month supply.
Patients taking Tarceva lived, on average, 4 months longer. The drug is a competitor to Astrazeneca’s Iressa.

Trader talk:  techs due for backing and filling

                   
indices remain near their highs   

                   
strong inflows into stock mutual funds   

                   
path of lest resistance is still up

                   
SOX near its 200-day moving average

This day in history:

1959  Ford cancelled the Edsel

1965  Pop Tarts
created

Dow -115.64 10456.91
S&P 500 -13.21 1170.34
Nasdaq -33.65 2070.63

Strong sectors were: Gold
(
XAU.X |
Quote |
Chart |
News |
PowerRating) +1.02%, Oil
Services
(
OSX.X |
Quote |
Chart |
News |
PowerRating) +1.81%, Natural Gas
(
XNG.X |
Quote |
Chart |
News |
PowerRating) +1.10%.

Weak sectors were: Airlines

(
XAL.X |
Quote |
Chart |
News |
PowerRating) -4.14%, Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating) -3.07%, Brokers
(
XDB.X |
Quote |
Chart |
News |
PowerRating)
-2.51%.

The dollar was -0.37 at 83.30

Gold was +4.10 to 446.60

Crude Oil was +2.42 at 48.80

ce=”Arial” size=”2″ face=”Arial”>Volume was 1.52 billion on the NYSE and
2 billion on the Nasdaq.

Market breadth was negative.

NYSE Issues
Advancing 940 Up Vol 334
Declining 2400 Down Vol 1048
Ratio 2.55 3.13
Nasdaq
Advancing 965 Up Vol 604
Declining 2151 Down Vol 1292
Ratio 2.22 2.13

Stocks in the News

Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating) will report tender
offer results for PeopleSoft after 1 am ET Saturday.

Sirius
(
SIRI |
Quote |
Chart |
News |
PowerRating) named former Viacom chief
Mel Karmazin, as CEO. Talk: will satellite radio kill broadcast radio?

Novell
(
NOVL |
Quote |
Chart |
News |
PowerRating) beat by a penny, and a
Q3 profit compared to a year earlier loss.

Marvel (MRVL)
beat by a penny; margins were in-line. UBS raised its 2005 revenue estimates but
lowered its earnings estimates.

Brice Wightman