What Will This New FDA Study Do To MRK?

August 25, 2004
Brice Wightman

Stocks were
higher Wednesday, with the Dow near a 6-week high.
The market was fueled by lower crude, which closed
below $44 and is at 2-week lows.

Durable goods orders for July rose 1.7%, better
than expected and the biggest jump since March.Â

General Motors
(
GM |
Quote |
Chart |
News |
PowerRating) has asked AM
General — builder of the Hummer — to cut back production in the wake of slower
sales, which are down 25% in 2004. The Hummer generates as much as $10,000
profit per vehicle for GM. Hummers retail at about $50,000.

The American Petroleum Institute said that
crude inventories for the week of August 20 fell by 3.4 million barrels;
gasoline inventories for the same period rose by 1.5 million barrels.

The NY Mercantile Exchange (NYMEX) raised
margin requirements on the September and October crude oil contracts; traders
are hoping this will keep speculators out of the market. Oil closed at 2-week
lows — at 43.47 — and is down 10% last 4 sessions; traders are asking if the
uptrend is over.

An FDA study showed that patients who took
Merck’s Vioxx had 50% more heart attacks than patients who took
Pfizer’s Celebrex. MRK closed at 46.02, down 0.33 and PFE closed at 31.91,
up 0.38.

Financials have rallied in August, with Lehman
(
LEH |
Quote |
Chart |
News |
PowerRating) up 6% and JP Morgan {JPM|JPM] up 10%.

The Stock Trader’s Almanac shows that in 6 of the last 7 years, the last
5 days of August have been down.

Dow	+83.11	10181.74
S&P 500	+8.77	1104.96
Nasdaq	+23.83	1860.72

Weak were: Homebuilders
(
HGX.X |
Quote |
Chart |
News |
PowerRating) -0.37%.

10-year Notes were +065 at 112 200.

The dollar
was -0.02 at 89.41.

Gold was +2.90 at
407.70.

Crude Oil was -1.74 at
43.47

Volume was 1.19 billion
on the NYSE and 1.30 billion on the Nasdaq.

Market breadth was positive.

NYSE	Issues
Advancing	2334	Up Vol 879
Declining	999	Down Vol 298
Ratio	2.33	2.94
Nasdaq
Advancing	2059	Up Vol 1072
Declining	999	Down Vol 197
Ratio	2.06	5.44

Stocks in the News

Boeing
(
BA |
Quote |
Chart |
News |
PowerRating) received a $7.35 billion order
from Singapore Airlines.

H&R Block
(
HRB |
Quote |
Chart |
News |
PowerRating) posted a loss for Q1.

Toll Brothers
(
TOL |
Quote |
Chart |
News |
PowerRating) beat estimates and guided higher.

OmniVision’s
(
OVTI |
Quote |
Chart |
News |
PowerRating) profit tripled, but
guided the current quarter lower. JP Morgan removed the stock from its focus
list, RBC lowered its price target to $13 from $18. OVTI is trading at 11.00,
down 0.57.

Williams Sonoma [WSM|WSM} beat by 0.04

Ditech Communications
(
DITC |
Quote |
Chart |
News |
PowerRating) swung to a quarterly profit.

Brice Wightman

What Will This New FDA Study Do To MRK?

BUY THE FEAR, SELL THE GREED

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