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IBM weighs on Dow, as indexes hold unchanged

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It's been a sideways session with International Business Machines (NYSE:IBM) $83.42 -4.4% seeing a lower trade after announcing late yesterday that the SEC was investigating its accounting practices for revenue recognition data back to 2000 and 2001.

The weakness in IBM finds the Dow Industrials (INDU) 8,889.75 -0.08% still holding near the unchanged level with 45-minute left in today's trade, with Dow breadth holding positive at 16 to 14. Intel (NASDAQ:INTC) $20.89 +2.5% along with Citigroup (NYSE:C) 42.09 +1.74% and Caterpillar (NYSE:CAT) $52.81 +1.2% help offset today's declines in Big Blue.

DaimlerChrysler (NYSE:DCX) $31.54 -0.69% got a lift from its noon-time low of $31.20 after the third-largest automaker said May sales fell 3%, which was better than Morgan Stanley's estimates of down 6%-7% (May 2003 to May 2002 comparison). DaimlerChrysler said May total sales were 217,411 compared to year-ago 216,563. On a year-to-date basis, DCX showed a 6.3% decline with current total sales of 906,274 compared to year-ago- levels of 959,183.

Dow Component General Motors (NYSE:GM) $35.74 -1.65% is just off its afternoon low after saying May sales rose 4% (May 2003 to May 2002), which was inline with Morgan Stanley's estimates of 4% to 5% growth. GM said that May 2003 total sales were 426,838 compared to last May's 395,169. Year-to-date sales of 1,817,947 still lag levels of 1,921,835, marking a -6.1% decline on a year- to-date basis.

The often-times more volatile NASDAQ-100 Index (NDX.X) 1,193 +0.66% sees a rather sideways trade in today's session and has been bound by a high of 1,198.95 and low of 1,180.01, which will keep bearish traders on their toes considering some comments regarding yesterday's heavy volume session and reversal lower into the close.

Market internals have been steady for the bulk of today's session with the NYSE still showing negative breadth with decliners outnumbering advancers by a 17 to 15 margin, as new highs of 299 easily outnumber 2 new 52-week lows.

NASDAQ breadth is still fractionally negative with decliners outnumbering advancers by an 8 to 7 margin with 133 stocks having traded a new 52-week high compared to just 8 stocks reaching new lows.

In last night's Index Trader Wrap, I thought NASDAQ traders might be keeping an eye on the Biotechnology Index (BTK.X) 451.45 -0.85% for any signs of weakness toward the NASDAQ-100, but the biotechs have held tough in today's session and give little hint that bulls are "pulling the plug" on impressive gains found in recent weeks.

Jeff Bailey

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