This Sector Is Still On Fire

Stocks
are mixed on disappointing earnings guidance.
Housing
starts rose by 1.7% to 2.08 million, the fastest rate since 1984. Merrill
Lynch

(
MER |
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PowerRating)
recorded a record $1.2 billion profit for the fourth
quarter. Investment banking business and sales of stocks and bonds contributed
to the strong numbers. Net revenue for the quarter rose 17% to $4.9 billion. For
fiscal year 2003, net income came in at $4 billion on revenues of $20.2
billion. Lucent
(
LU |
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was in the black for the second straight quarter,
recording a $349 million profit and beating analyst consensus. Sales rose by 9%
to $2.26 billion, but the company did not raise its 2004 outlook. Seagate
(
STX |
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PowerRating)
warned that it might miss third-quarter and full-year estimates
because of high inventories and lower profit margins.

Dow
+38.82

10567.36
S&P 500
+2.39
1141.15
Nasdaq
-16.99

2130.99

The day’s leading sectors are
Pharmaceuticals
(
DRG.X |
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PowerRating)
+0.90%, Utility
(
UTY.X |
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Chart |
News |
PowerRating)

+0.79%,
Insurance
(
IUX.X |
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Chart |
News |
PowerRating)

+0.72%, and Healthcare
(
HCX.X |
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Chart |
News |
PowerRating)
+0.68%.

Weak today are Disk Drives

(
DDX.X |
Quote |
Chart |
News |
PowerRating)
-4.61%, and Hardware
(
GHA.X |
Quote |
Chart |
News |
PowerRating)
-3.65%.

Economic news releases today
included housing starts rising to 2.088 million, and building permits that rose
to 1.924.

10-year Notes are 25 at
114 035

The dollar
is -0.48 at 86.50

Gold is -2.30 at 411.70

Crude Oil is -0.44 at
33.87

Volume is 804,000,000 on
the NYSE, and 1,190,000,000 on the Nasdaq.

Market breadth is positive.

NYSE Issues
Advancing 1668 Up Vol
372
Declining 1458 Down Vol
416
Ratio 1.14 1.11
Nasdaq
Advancing 1207 Up Vol
291
Declining 1879 Down Vol
874
Ratio 1.51 3.01

Top Dow stocks
are:

JP Morgan [JPM|JPM],
+2.13% at 39.94, Johnson & Johnson
(
JNJ |
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PowerRating)
, +1.70% at 52.37,
Citigroup
[C|C
],
+1.41% at 50.00, and Eastman Kodak [EK|EK
],
+1.40% at
26.70.

Stocks
in the news:

JP Morgan
(
JPM |
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PowerRating)
posted strong profits
with higher activity in its Investment Banking unit and fewer bad loans, earning
$1.86 billion on revenue of $7.9 billion.

Charter One Financial
(
CF |
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Chart |
News |
PowerRating)
recorded
fourth-quarter earnings of $158.2 million. The company plans to prepay $2.25
billion in Federal Home Loan Bank advances in January. It will also issue
dividends of $0.26 per share.

Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating)
reported earnings of
$489 million for the quarter on sales of $8 billion. It also received a couple
of upgrades from brokerage houses such as Wells Fargo, Blaylock &
Partners. Analysts do not expect last quarter’s shipment delays to recur, and
forecast higher cell phone sales for the next quarter.

Harley-Davidson
(
HDI |
Quote |
Chart |
News |
PowerRating)
reported a 22%
fourth-quarter increase to $182 million on revenue of $1.16 billion. A total of
77,000 motorcycles were shipped for the quarter, up 17%. The company reiterated
its 2004 target of 317,000 units.

bricew@tradingmarkets.com