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Market Wrap

A Somber Mood

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     09-10-2003            High     Low     Volume Advance/Decline
DJIA     9420.46 - 86.74  9504.95  9400.38 1.87 bln    867/1981
NASDAQ   1823.81 - 49.62  1859.21  1823.81 1.99 bln    765/2309
S&P 100   508.77 -  5.15   513.92   508.08   Totals   1632/4290
S&P 500  1010.92 - 12.25  1023.17  1009.74
RUS 2000  501.76 - 11.81   501.73   501.76
DJ TRANS 2705.27 - 26.92  2734.85  2704.05
VIX        21.26 +  1.58    21.34    20.21
VXN        33.16 +  2.78    33.38    31.52
Total Volume 4,375M
Total UpVol    716M
Total DnVol  3,613M
52wk Highs     317
52wk Lows       13
TRIN          2.18
PUT/CALL      1.00

A Somber Mood
By James Brown

The weather over Wall Street began to darken yesterday afternoon. By the opening bell on Wednesday the clouds had turned stormy and investors turned sour on stocks and fled to the safety of bonds. The dip became a full-fledged rout after a new tape from Osama Bin-Laden aired over the Al-Jazeera network. The downpour of selling puddled in technology issues but the profit taking was market wide with only the DRG.X drug index and the UTY.X utility index escaping to close in the green.

Overseas markets shared the mood with losses in Asia and European bourses. The Hang Seng led the pack with a 236-point drop to 10,810. U.S. exchanges witnessed internals turn bearish on the eve of the 9/11 attacks. Declining stocks washed away advancing issues almost 20 to 8 on the NYSE and 23 to 7 on the NASDAQ. Down volume flooded over up volume by 4-to-1 on the NYSE and 6.5- to-1 on the NASDAQ. New highs evaporated to a measly 126 while new lows clocked in at eleven.

Chart of the S&P 500:

Chart of the DJIA:

Chart of the NASDAQ Composite:

Semiconductor stocks lead the markets lower with a 5.3 percent drop in the SOX index. The trouble began yesterday after the market close. Texas Instruments (TXN) and Xilinx (XLNX) gave their mid-quarter updates and investors choose to sell the news. TXN's forecast was for a 6.3% jump in Q3 sales but traders were probably hoping for more of a blowout akin to Intel's +17% forecast at their mid-quarter update last week. TXN also guided to the upper end of their revenue range but that wasn't enough for Wall Street. XLNX merely reaffirmed previous estimates. Investors felt that this news was already priced into the stocks and chose to take some off the table. TXN lost 7.5% and XLNX dropped 5.6%. A downgrade of Micron Technology (MU) by SoundView to a "neutral" didn't help matters. MU lost more than 9 percent.

OptionInvestor.com has been cautious the last couple of weeks and told reader to expect the upgrade parade by honey-tongued analysts to slowly turn bitter as valuation concerns became the new trend. We've certainly seen that new trend begin and with Wall Street still sliding into earnings warning season it could get worse. Meanwhile we could be left to hear brokerages talk out of both sides of their mouth. Case in point: Smith Barney's networking analyst downgraded Nortel Networks and Juniper Networks while upgrading higher price targets on Cisco Systems, Foundry Networks and Extreme Networks. Then again maybe Smith Barney is just trying to separate the wheat from the chaff.

Trading tomorrow is expected to be subdued due to the 9/11 anniversary but we can still expect some economic reports. Before the opening bell we'll hear the latest weekly jobless claims. Economists are hoping for a decline towards the 400,000 level from last week's 413,000. Also before the open the August export/import prices will come out and the July trade balance figures will be announced.

Tomorrow's two-year anniversary of the 9/11/2001 terrorist attacks will have most U.S. exchanges all observing moments of silence to remember the fallen. The NYSE, NASDAQ and AMEX will observe four separate one-minute breaks. The moments of silence will occur at:

8:46 a.m. ET - The first plane, American Airlines flight 11, 
               hit the North Tower.

9:03 a.m. ET - The second plane, United flight 175, 
               hit the South Tower.

9:59 a.m. ET - The South Tower fell.

10:29 a.m. ET - The North Tower fell.
While the markets may be active, we do not want to forget the 9:43 a.m. ET crash of American Airlines Flight 77 into the Pentagon.

Our prayers still go out to the families and individuals who are dealing with the vacancy and emptiness of lost loved ones.


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