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Stocks steady at their lows

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News out of Turkey that it has recalled oil tankers from Iraq and pulled its ambassador out of Baghdad has stocks hovering just off their lows of the session and "war jitters" once again have investors skittish and sitting on the sidelines in a moderate-to- light volume session.

The major indexes had just turned positive at approximately 10:20 AM EST and looked to build on yesterday's intra-day reversed when further worries about a U.S.-lead war with Iraq sent investors to the sidelines and stocks to their lows of the session with the Dow Industrials (INDU) 7,846 -0.79%, now off 62-points reversing a modest 16-point gain as Treasuries were finding some selling, but not necessarily at a pace that would currently indicate a massive move back to the perceived safety of these bonds.

Sector action, which was mixed has turned broadly negative with Oil Service (OSX.X) 91.30 +2.45% and Forest Paper (FPP.X) 269.78 +1.46% the only two sectors showing gains greater than 1%.

Lackluster revenues from Hewlett Packard (HPQ) $15.62 -14.08% have the computer maker and Dow component extending earlier opening losses of 10%. Sector action which has ties to the computer/printer maker has the Disk Drive Index (DDX.X) 71.14 -1.76% and Semiconductor Index (SOX.X) 285.34 -1.6% leading technology declines on "realization" that bottom line growth continues to come from cost-cutting measures and not necessarily any type of recovery in corporate capex expenditures needed to fuel longer-term growth prospects at this time.

The April Light, Sweet Crude Oil futures contract (cl03j) $37.33 +3.52% builds on gains found earlier this morning and bulls have pushed this contract above yesterday's highs of $37.10 and a new 52-week high of $37.38. The Oil Index (OIX.X) 244.21 +0.03% has barely managed to edge into positive territory despite the higher prices of the commodity itself, and certainly gives the impression from equity traders that the torrid price gains seen in the commodity in recent months are to be short-lived. So far, the bullish price action in the commodity has yet to fade for more than hours at a time.

Volume levels at both the NYSE and NASDAQ would be considered moderate. Yesterday's session was the "heaviest" volume seen in either of these markets in roughly 2.5 weeks. Current NYSE volume is just over 719 million shares (755 million at this time yesterday), while NASDAQ volume is just now over 657 million shares (711 million yesterday at this time).

Lack of leadership under a more "uncertain" market environment has the NYSE showing just 26 stocks trading a new 52-week high at mid-session, compared to 69 stocks trading new 52-week lows. This breadth indicator isn't quite as weak on a ration basis at the NASDAQ, with 39 stocks achieving a 52-week high, compared to 59 stocks at new lows.

Shares of Cisco Systems (NASDAQ:CSCO) $13.72 -2.55% are the second most actively traded stock in today's market and similar to yesterday's session low, once again rest on a rounding flat short-term 21-day SMA of $13.72, with the longer-term 200-day SMA trying to flatten out at $13.50. Yesterday, Lehman analysts met with Westcon, a major networking distributor for Cisco Systems and Westcon suggested that growth was sluggish and overall global networking growth will be only 1-3% in 2003. Lehman said it thought the news from Westcon had expectations for any sequential growth improvement in the second-half of the year being optimistic at best.

Fellow telecom network equipment provider Nortel Networks (NYSE:NT) $2.13 +3.90% is the most actively traded stock in today's market and attempts to reclaim its 50-day SMA after violating this intermediate-term moving average on Monday. Both stocks combined have the Networking Index (NWX.X) 140.33 -0.86% trading with fractional losses and continues to find bearish support at its trending lower 200-day SMA of 139.40.

Jeff Bailey

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