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Drifting lower

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Stock are holding near their lows of the session, on what has been a slow drift lower since this afternoon's news out of the U.N. Weapons Inspection team that it had found 11 chemical warheads in Iraq.

The Dow Industrials (INDU) 8,689 -0.38% currently trades off just 33-points, while the more tech-heavy NASDAQ-100 Index (NDX.X) 1,061 -1.17% sheds 16-points.

Fiber optic stocks as depicted by the Fiber Optic Index (FOP.X) 56.68 -4.49% have been one of the tech group to see a more meaningful decline since the U.N. news. This sector recently rallied to the 60.00 level over the past three session, but was unable to break above this apparent level of resistance, which also marked the early December relative high close of 60.87. Current action in the sector looks to be that of profit taking by bulls as today's trade didn't see a break-through day. The converging of 21-day, 50-day and 200-day SMA's all at the 50.00 level look to be a bull's assessment of risk.

Volume levels are running a little on the light side at this time of day as NYSE volume is just approaching the 1.3 billion mark, while NASDAQ volume shows 1.35 billion shares traded.

Some divergence in broader market breadth is seen between the NYSE and NASDAQ, with advancers outnumbering decliners by a 17 to 15 margin on the NYSE, while NASDAQ breadth is negative, with decliners having the upper hand here at 18 to 13. The more negative breadth in the NASDAQ compared to the NYSE is most likely attributed to a more defensive posture by traders ahead of tonight's earnings out of technology bellwether's IBM (NYSE:IBM) $86.05 -1.71% and Microsoft (NASDAQ:MSFT) $55.45 -1.45%.

New highs versus new lows remains impressive at the NYSE, with 99 stocks having traded a new 52-week high today compared to just 9 stocks hitting new lows. The NASDAQ Composite however isn't as positive in this indicator of breadth with 72 stocks having traded a new 52-week high compared to 24 stocks hitting new 52- week lows.

Shares of drug giant Pfizer (NYSE:PFE) $29.80 -2.13% turned defensive in the latter half of today's session after Bloomberg reported that PFE lost an appeals court ruling in its bid to block generic Neurontin. The court said Apotex's generic version did not infringe on PFE's patent for the blockbuster drug. Goldman Sachs has come to the defense of Pfizer saying that today's ruling was not on the key manufacturing patent #482, which by law, must be ruled on before generics can come to market. Goldman also says the generic manufacturers also would risk treble damages if they launched generic versions.

Jeff Bailey

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