Winning Streak Snapped
Stocks
were mixed with the Nasdaq eking out a small gain and the Dow and SPX in the
red. Two winning streaks were snapped: this is the
first down week in eight for the Dow and the first down week in six for the
Nasdaq. The indices made a high at 10:30 AM and slid into the close.
Money rotated out of basic and semis and into
energy stocks.
Rumors abound of a merger between pharmaceutical
companies Aventis
(
AVE |
Quote |
Chart |
News |
PowerRating) and Sanofi-Synthelabo. If consummated,
it would create the third largest drug company in the world. Aventis has hired
three major investment banks to defend itself from the hostile takeover. Regions
Financial
(
RF |
Quote |
Chart |
News |
PowerRating) and Union Planters
(
UPC |
Quote |
Chart |
News |
PowerRating) will merge,
creating one of the largest banks in the Southeast. The deal is worth $5.9B.
Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating)
gained 5% after reporting a higher-than-expected quarterly profit on increased
oil and natural gas drilling activity. Net income rose to $177 million on
revenues of $3.67 billion. Revenue for North America rose 19%, and in Latin
America, up 15%. SLB broke out to new 52-week highs. Software giant
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) reported a 17% drop in net earnings for the second
quarter as it earned $1.55 billion on increased revenues of $10.15 billion. Halliburton
(
HAL |
Quote |
Chart |
News |
PowerRating) slipped after it told the Pentagon that two employees took up to $6
million in kickbacks.
| Dow | -54.96 |
10568.22 |
| S&P 500 |
-2.39 | 1141.55 |
| Nasdaq | +4.86 | 2123.87 |
The day’s leading sectors were
Oil Services
(
OSX.X |
Quote |
Chart |
News |
PowerRating) +3.98%, Energy
(
DXE.X |
Quote |
Chart |
News |
PowerRating) +1.26%,
Natural Gas
(
XNG.X |
Quote |
Chart |
News |
PowerRating) +0.92%,
Software
(
GSO.X |
Quote |
Chart |
News |
PowerRating) +0.72%.
Weak today were Chemicals
(
DDX.X |
Quote |
Chart |
News |
PowerRating) -0.97%, and Gold
(
HUI.X |
Quote |
Chart |
News |
PowerRating) -1.64%.
No Economic news
releases today.
10-year Notes were -240
at 114
Dollar was +0.80 at
86.62
Gold was -3.41 at 407.54
Crude Oil was -0.17 at
34.13
Volume was
1,538,859,000
on the NYSE, and 2,236,561,000
on the Nasdaq.
Market breadth was Positive.
| NYSEÂ | Issues | Â |
| Advancing | 1731 | Up Vol      723 |
| Declining | 1574 | Down Vol  766 |
| Ratio | 1.09 | 1.05 |
| Nasdaq |  |  |
| Advancing | 1829 | Up Vol     1106 |
| Declining | 1371 | Down Vol  1088 |
| Ratio | 1.33 | 1.01 |
Stocks in the news:
Northwest Airlines
(
NWAC |
Quote |
Chart |
News |
PowerRating) reported a
net loss of $1.49 a share, excluding gains on sale of assets and currency
exchange. Revenue rose to $2.41 billion, with strength in passenger traffic.
Fortune Brands
(
FO |
Quote |
Chart |
News |
PowerRating) reported
fourth-quarter earnings of $156 million on sales of $1.66 billion, a 15.7%
increase from the previous year. Fortune expects double-digit earnings growth
in the first quarter and for the full year.Â
Vitesse Semiconductor
(
VTSS |
Quote |
Chart |
News |
PowerRating) rose 8%
after posting a much smaller loss of $8 million compared to its $11 million loss
a year ago. The communications microchip maker’s revenue rose to $50.3
million.Â
Visteon
(
VC |
Quote |
Chart |
News |
PowerRating) dropped 5% after reporting
a larger fourth-quarter loss of $863 million. Revenue came in at $4.5 billion,
$84 million lower than the previous year, but beat analysts’ forecasts of $4.39
billion. Visteon expects income to be about 10 cents a share for the next
quarter.
Scientific Atlanta
(
SFA |
Quote |
Chart |
News |
PowerRating) rose 10%
after reporting a 70% increase in net income that came in at $41.1 million on
sales of $416.6 million. Â
Next week, look for earnings from Amazon, JetBlue,
and Earthlink. Traders will be looking for reactions to these reports; this week
many reports were met with shrugs.
 bricew@tradingmarkets.com