Will We See Turnaround Tuesday?

March 15, 2004
Brice Wightman

Stocks
fell Monday on political risk and terrorism fears.
Over the weekend, news came out that al Qaeda
may have been behind M-11 (last week’s attacks in Madrid). The Nasdaq is trading
at 3-month lows and the VIX has spiked in the last week. The advance/decline
line is weakening and market internals are moving to the downside as traders
worry that Friday’s action may have been a one-day rebound. Selling has
accelerated in this market after the major indices conclusively broke the 50-day
moving average. The main topic among traders is the Spanish terror attack and
the upset in the election there. All
major European markets closed lower today. The Dow has closed at the lows 3 of
the last 4 trading days.

U.S. firms operated at their fastest pace
since August 2001, as industrial output grew by a better-than-expected 0.7
percent in February.

The National Association of Home Builders said that its housing index was
steady at 64 in March, saying “highly favorable financing conditions”
were responsible for strong construction and sales.

The New York Attorney General’s
office announced a settlement with two major banks in the ongoing mutual fund
scandal. Bank of America
(
BAC |
Quote |
Chart |
News |
PowerRating) will pay $375 million restitution plus
penalties and FleetBoston will pay $140 million. In addition, eight
directors will resign and reforms will be initiated. Bank of America was the
center or the original complaint.

Dow	-137.19	10102.89
S&P 500	-16.15	1104.42
Nasdaq	-45.53	1939.20

Economic news releases today
included better-than-expected Capacity Utilization at 76.6%; Industrial
production rising by 0.7%; and the NY Empire State Index falling to 25.33.

10-year Notes were -035
at 115 225

The dollar
was +0.36 at 88.76

Gold was +2.08 at 399.

Crude oil was +1.14 at
36.71.

Volume was
1,529,789,000 on
the NYSE, and 1,529,789,000 on the Nasdaq.

Market breadth was negative.

NYSE	Issues
Advancing	848	Up Vol 161
Declining	2435	Down Vol 1275
Ratio	2.87	7.91
Nasdaq
Advancing	640	Up Vol 151
Declining	2512	Dow Vol 1525
Ratio	3.95	10

Stocks in the news:

Specialty retailer Saks
(
SKS |
Quote |
Chart |
News |
PowerRating)
declared a special $2 dividend to shareholders of record as of April 30,
following the sale of its credit card business.

United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating)
agreed to purchase Linde AG’s refrigeration unit for $305 million. UTX also was
upgraded by Deutsche Securities.

Nortel’s
(
NT |
Quote |
Chart |
News |
PowerRating) CFO and Controller
were put on administrative leave, amid accounting probes. William Kerr and
MaryAnne Pahapill will replace Douglas Beatty and Michael Gollogly. NT fell 18%.

Shares of Electronic Data Systems
(
EDS |
Quote |
Chart |
News |
PowerRating)
was higher after the company agreed to sell its software development
unit for $2.05 billion in cash to Bain Capital, Warbug Pincus and Silver Lake
Partners.

bricew@tradingmarkets.com

Will We See Turnaround Tuesday?

BUY THE FEAR, SELL THE GREED

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