The Closing Numbers Just Don’t Tell The Whole Story Today…Here’s Why

May 12, 2004
Brice Wightman

Stock
were mixed,
although the closing numbers don’t tell the whole story.
The Dow staged a major bounce in the last 2 hours of trading, from
down about 160 points to close up on the day. The rally came immediately after
a CNBC interview with Barton Biggs,
who said that the market was as oversold now as any time in the last 20 years
and he expected a violent oversold rally at any time. You didn’t have to wait
long, as the Nasdaq made an intaday
low for the year at 1879 shortly after the
interview and bounced from there. MSFT
bounced off its 50-day MA

The US trade deficit grew by 9.1%
to a record $46 billion with high import prices widening the gap. US exports
rose 2.6% to $94.7 billion; the trade deficit with OPEC countries rose to $5.6
billion. US import prices rose by 0.2%, the seventh consecutive monthly rise
with export prices up 0.6%, the largest increase since 1995.

Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating)
raised its third-quarter earnings forecast, citing great-than-anticipated
royalties and higher demand for its CDMA chips. It now expects to earn 50 cents
for next quarter, with shipments to reach 34 million. For Y04, it expects an EPS
of $1.65 with revenue increasing 29%.

The low carb phenomenon
continues to negatively affect some companies. Weight Watchers
(
WTW |
Quote |
Chart |
News |
PowerRating)
reported a 9% drop in Q1 earnings from a year ago, and trimmed its Y04 outlook.
The company said attendance was worse than expected. In the mid ’90s, the
company experienced lower sales when faced with competition from Jenny Craig,
Nutri-Systems and Phen-fen. WTW lost 4.61%.

The Florida Supreme court will
review an appeals court ruling which favored the tobacco industry. The Engels
case has been in court for 10 years. Altria Group
(
MO |
Quote |
Chart |
News |
PowerRating) fell 6.74%.

After the close, Disney
(
DIS |
Quote |
Chart |
News |
PowerRating) reported 0.26 vs. 0.21 on revenues of $7.2 billion vs $6.85 billion.
Strong sales of DVDs released last quarter — including Finding Nemo and
Pirates of the Caribbean — helped revenues. The company raised its
guidance, saying to look for growth of 50% or more for Y04. The stock traded up
after hours.

Tomorrow, look for analyst days
from Intel and Yahoo, as well as PPI (consensus 0.3%).

Dow	+25.69	10045.16
S&P 500	+1.81	1097.26
Nasdaq	-5.76	1925.59

Economic news releases today: A
rising trade deficit at $46 billion with export prices that rose by 0.6% and
import prices that excluded energy costs that rose by 0.3%.

The dollar
was -0.34 at 91.32

Gold was -0.99 at 387.13

Crude Oil was +0.67 at
40.77

Volume was 1.7 billion
on the NYSE, and 1.88 billion on the Nasdaq.

Market breadth was mixed.

NYSE	Issues
Advancing	1731	Up Vol 851
Declining	1589	Down Vol 807
Ratio	1.08	1.05
Nasdaq
Advancing	1427	Up Vol 668
Declining	1737	Down Vol 1119
Ratio	1.21	1.67

Stocks in the news:

Northrop
(
NOC |
Quote |
Chart |
News |
PowerRating) raised its dividend by 15% — the
first time in a decade — and announced its first stock split in nearly 20
years. The company stood by previous 2004 earnings forecasts and expects sales
to reach $30 billion for FY 2005

General Electric
(
GE |
Quote |
Chart |
News |
PowerRating) completed
its merger with Universal
today. GE will own 80% of NBC with Vivendi owning the remaining 20%.

Federated Department Stores

(
FD |
Quote |
Chart |
News |
PowerRating) reported earnings of $96 million, 4 cents
ahead of consensus estimates, with revenue $3.52 billion.

Brice Wightman

bricew@tradingmarkets.com

The Closing Numbers Just Don’t Tell The Whole Story Today…Here’s Why

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