New Tobacco Ruling, Plus, New Twist In The Martha Case

May 21, 2004
Brice Wightman

Stocks were
higher on this option expiration Friday
after oil prices took a break, closing below $40.
Saudi Arabia said
they will increase output to 9 million barrels a day next month
and will propose a higher quota.
OPEC, who said they have lost control of prices,
meets informally at an energy forum tomorrow in Amsterdam. The next official
OPEC meeting is June 3 in Beirut. Even if OPEC agreed to significantly increase
production, lower prices would take some time to work through the system.

Many traders sat on the
sidelines in today’s market, as the Dow closed at 9971, the first close below
10,000 since December 2003. The index made a high of 10036.57, just under the
10041 200-day moving average. The Semis got a lift on a better-than-expected
book-to-bill ratio. The dollar hit a two-week low against the Euro and the yen
after comments from the Fed hinted at a gradual pace in the increase of interest
rates.

The average price for a gallon of regular gas hit another record at $2.03, 53
cents over a year ago. The highest price — inflation adjusted in 2004 dollars
— was $2.99 in March 1981.

Marvel Technology
(
MRVL |
Quote |
Chart |
News |
PowerRating)
rose after reporting first-quarter earnings of $14.5 million, with revenue up
60% to $169.6 million. Retailer Nordstrom
(
JWN |
Quote |
Chart |
News |
PowerRating) reported earnings
that rose 153% on strong sales and better inventory management technology.
Same-store sales was up 13.2%, well ahead of the company’s own 5% forecast.

A government witness who
testified against Martha Stewart has been charged with lying on the stand.
Secret Service ink expert Larry Stewart (no relation) is charged with lying
about tests that were conducted during the investigation. The prosecution said
that the false testimony will not affect Stewart’s conviction. Stewart was found
guilty 2 months ago and awaits sentencing.

A New Orleans jury in the Scott
case ordered tobacco companies to pay $590 million for a smoking cessation
program in Louisiana. Philip Morris USA said it would appeal.

Dow	+29.10	9966.74
S&P 500	+4.40	1093.59
Nasdaq	+15.50	1912.09

10-year Notes were -100
at 108 305

The dollar
was -0.57 at 90.55

Gold was +4.14 at 384.59

Crude Oil was -0.95 at
39.93

Volume was 1.26 billion
on the NYSE, and 1.53 billion on the Nasdaq.

Market breadth was positive.

NYSE	Issues
Advancing	2187	Up Vol 840
Declining	1086	Down Vol 402
Ratio	2.01	2.08
Nasdaq
Advancing	1980	Up Vol 986
Declining	1120	Down Vol 327
Ratio	1.76	3.01

Stocks in the news:

Union workers at SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating) launched
a 4-day strike across thirteen states for better healthcare and job security.

Serena Software
(
SRNA |
Quote |
Chart |
News |
PowerRating) reported a
profit of 24 cents before one-time charges, 4 cents ahead of Wall Street
consensus. Revenue rose 38% to $33.7 million with software license sales up 46%
from a year ago.

Retailer Wet Seal
(
WTSLA |
Quote |
Chart |
News |
PowerRating) was lower after
reporting a net-loss of $20.3 million on sales from continuing operations of
$99.8 million with same store sales that fell 17%

Brice Wightman

bricew@tradingmarkets.com

New Tobacco Ruling, Plus, New Twist In The Martha Case

BUY THE FEAR, SELL THE GREED

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