Oil Prices Are High, But Who Gets Hurt The Most?

Stocks fell
Thursday, but not before a mid-day rally based on a report that Bin Laden’s #2
man,

Ayman al-Zawahiri, was cornered in Pakistan. At
press time, the US military had not confirmed the report. Trading was choppy but
the averages gained briefly beginning at 12:30 PM when the news came out, only
to pull back later in the day.

Weekly unemployment claims fell by 6,000 to 336,000 — bringing the
four-week average to 344,000 — but US producer prices in January rose
0.6%. Analysts forecasted a 0.4% increase. Energy prices caused the largest
spike with gasoline prices jumping 14% in January and home heating oil costs up
16.8% after a 6% increase in December.

KMart
(
KMRT |
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posted
earnings of $276 million compared with a loss of $1.1 billion. Sales tanked
25.8% because of fewer stores. KMRT also said the Martha Stewart’s verdict has
not had an adverse impact on her line of products. KMRT closed at 37.06, up
2.38.

Microsoft
(
MSFT |
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and the European Commission were not able to settle antitrust issues today
but next week, the EU will propose fines
expected to be as high as $1 billion. MSFT closed at 24.89, down 0.24.   

Crude oil and gasoline continue
to trade at very high levels. Companies especially hurt by high prices are:
airlines, petrochemicals, aluminum, utilities and trucking.

The jury is deliberating in the
trials of former Tyco execs Dennis Kozlowski and Mark Swartz. The pair face up
to 30 years in prison.

After the close, Tektronics
(
TEK |
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beat by 0.08, ex-items and beat on revenue; Paychex
(
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was in-line with year/year revenues up 19%. Adobe
(
ADBE |
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beat by
0.10, ex-items and beat on revenues. Wet Seal
(
WTSLA |
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beat by 0.03.
Nike
(
NKE |
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beat by a penny and beat on revenues. Idexx Labs
(
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got FDA approval to sell its HerdChek BSE Antigen Test Kit.

Don’t forget, tomorrow is
quadruple expiration.

Dow
-4.52

10295.78
S&P 500
-1.44
1122.31
Nasdaq
-14.32

1962.44

The day’s leading sectors were
Amex Gold Bugs
(
HUI.X |
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PowerRating)
+3.03%, Gold and Silver
(
XAU.X |
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+2.10%
, Oil Services
(
OSX.X |
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News |
PowerRating)

+0.88%, and Energy
(
DXE.X |
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+0.86%.

Weak today were Airlines
(
XAL.X |
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-2.32%, and Networking
(
NWX.X |
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PowerRating)
-1.58%.

Economic news releases today
included Producer Price Index up 0.6%, and the core PPI index up 0.3%,
both 0.2% higher than consensus. Initial claims fell to 336K with leading
indicators flat at 0%.

10-year Notes were -160
at 115 255

The dollar
was -1.01 at 87.64

Gold was +4.91 at 410.56

Crude Oil was -0.22 at
37.40

Volume was
1,362,526,000 on
the NYSE, and
1,654,414,000 on the Nasdaq.

Market breadth was negative.

NYSE Issues
Advancing 1524 Up Vol
570
Declining 1747 Down Vol
644
Ratio 1.14 1.12
Nasdaq
Advancing 1279 Up Vol
472
Declining 1820 Down Vol
1069
Ratio 1.42 2.26

Stocks in the news:

Rotal Dutch/Shell
(
RD |
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PowerRating)
re-categorized the equivalent of another
$250 million barrels of oil at the end of 2002. The company expects to take a
$20 million charge for this downgrade and will delay the release of its annual
report until May.

Fortune Brands
(
FO |
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PowerRating)
expects to beat analysts’ forecasts for its
first-quarter earnings as the company’s shares rose 4%.

Darden Restaurants
(
DRI |
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PowerRating)
reported earnings of $77.9 million on
revenue of $1.24 billion. This was the 38th consecutive quarter where Olive
Garden had rising same-store sales, at 5.4%. Red Lobster suffered a 5% drop in
its same-stores sales.

Planar Systems
(
PLNR |
Quote |
Chart |
News |
PowerRating)
took a hit after guiding
the Street lower due to higher costs in its medical and commercial business
units. It now expects to earn 7 cents on sales of $57 million.


bricew@tradingmarkets.com