Homebuilders Weak — Here’s Why
Stocks are flat today. The
Fed met yesterday on economic issues and decided to leave interest rates
unchanged at 1% but changing its stance on inflation to neutral. Autozone
(
AZO |
Quote |
Chart |
News |
PowerRating) dropped 10% after reporting lower-than-expected same-store sales. Net
income came in at $121.7 million on revenue of $1.28 billion. Shares of
homebuilders fell after Washington Mutual
(
WM |
Quote |
Chart |
News |
PowerRating) cut its earnings
outlook due to a drop in the mortgage lending business. Mortgage applications
are at an 18-month low. Gold continued its remarkable up-trend, climbing to
$413 an ounce. Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating) is meeting with analysts today and
tomorrow to announce new product developments and strategic alliances; no
earnings updates are expected.
| Dow | +21.22 |
9944.41 |
| S&P 500 | +1.21 | 1061.45 |
| Nasdaq | +2.05 | 1910.25 |
The day’s leading sectors are
Semis [SOX.X|SOX.X] +1.20%, Tech
(
TXX.X |
Quote |
Chart |
News |
PowerRating) +1.00%, Internet
(
GIN.X |
Quote |
Chart |
News |
PowerRating) +0.86%, Disk Drive
(
DDX.X |
Quote |
Chart |
News |
PowerRating)
+0.62%.
Weak today are Amex Gold
Bugs [HUI.X|HUI.X] -2.70% and Gold and
Silver
(
XAU.X |
Quote |
Chart |
News |
PowerRating) -1.26%, .
No Economic news releases
today.
10-year Notes are +60
at 112 250
The dollar
is +0.37 at 89.01
Gold is +2.10 at 410.30
Crude Oil is -0.60 at
31.70
Volume is 578,000,000 on
the NYSE, and 914,000,000 on the Nasdaq.
Market breadth is Negative
| NYSE | Issues | |
| Advancing | 1345 | Up Vol 249 |
| Declining | 1735 | Down Vol 333 |
| Ratio | 1.31 | 1.32 |
| Nasdaq | ||
| Advancing | 1139 | Up Vol 272 |
| Declining | 1832 | Down Vol 453 |
| Ratio | 1.63 | 1.67 |
Top Dow stocks are:
Disney [DIS|DIS],
+2.53%, IBM
(
IBM |
Quote |
Chart |
News |
PowerRating), +2.04% at 92.51, SBC Communications [SBC|SBC],
+1.84% at 24.47, and Altria
(
MO |
Quote |
Chart |
News |
PowerRating), +1.50% at 52.50.
Stocks in the news:
Freddie Mac
(
FRE |
Quote |
Chart |
News |
PowerRating)
agreed to pay a penalty of $125 million for manipulating its earnings. Freddie
Mac had underreported earnings by $4.4 billion for the period 2000 to 2002.
Verizon
(
VZ |
Quote |
Chart |
News |
PowerRating) announced plans to take a
$2.8 billion hit for severance payments and an additional $900 million charge
for pension settlements. Most of the charges will be taken in the first quarter
of 2004.
Electronic software maker Digital Driver
(
DRIV |
Quote |
Chart |
News |
PowerRating)
was upgraded to outperform by Steve Jue of RBC Capital Markets. Mr. Jue expects
DRIV to post modest upside fourth-quarter numbers due to a healthy business
environment. Shares are up 9%.
Glass disc maker Photronics
(
PLAB |
Quote |
Chart |
News |
PowerRating)
posted net income of $3.1 million on sales of $91.5 million. It lost $10.3
million the previous year.
bricew@tradingmarkets.com