Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (12738)	11/13/2002 11:30:07 AM
From: Techplayer	Respond to of 57110

Saddam giveth, Saddam taketh away.... Iraq Blinks, Stocks Rise By Igor Greenwald November 13, 2002 STOCKS SHED early-morning weakness Wednesday to post modest gains or reports that Iraqi dictator Saddam Hussein has agreed to tough new U.N. weapons inspections under the threat of war by the United States. The news helped traders cope with a new terror warning likely delivered by Osama Bin Laden, and uninspiring congressional testimony by Federal Reserve Chairman Alan Greenspan. Neither man had much new to say, but both still have Wall Street's ear. Under questioning, Greenspan said last week's big interest-rate cut was cheap insurance against the unlikely possibility of another serious economic downturn. At 11:12 a.m. ET, the Dow was up 33 points to 8419, while the Nasdaq rose 5 to 1354. The S&P 500 moved up a fraction at 883. Data-storage suppliers and health insurers fared best. Banks, telecoms and broadcasters got jammed. Citigroup (C) shares weighed on the Dow after press leaks of an email by former Salomon Smith Barney telecom analyst Jack Grubman. The message to a friend suggested Grubman upgraded AT&T (T) shares in 2000 to win the support of Ma Bell's boss for Citigroup Chairman Sandy Weill, who was then engaged in an internal power struggle. Grubman now says he made up the story, which was slammed as "pure fantasy" by Ctigroup. But the top bank's stock fell a very real 4%. Wal-Mart (WMT) shares rose 1% after the top retailer submitted its habitually strong earnings report. Earnings increased 23% time and beat Wall Street's consensus estimate by a penny with a third-quarter net of 41 cents a share. But while the company pledged "a successful and record fourth quarter," with same-store sales continuing to grow at the recent annual pace of 3% to 5%, its forecast suggested earnings could fall two cents shy of the current analyst estimate for 55 cents a share. Tuesday's broadcast of a recording likely made by Bin Laden rudely upstaged a Fed charm offensive aimed at convincing the markets that the economy is on the mend. Greenspan's own remarks before the Joint Economic Committee were short on the relatively optimistic forecasts issued by several central-bank governors a day earlier. "In the business sector, there have been few signs of any appreciable vigor," said the Fed's boss. "Uncertainty about the economic outlook and heightened geopolitical risks have made companies reluctant to expand their operations, hire workers, or buy new equipment. Executives consistently report that in today's intensely competitive global marketplace it is no longer feasible to raise prices in order to improve profitability." That's certainly the case for Philip Morris (MO), the cigarette maker's battered stock rebounding 3% after a 14% drop Tuesday following a profit warning. The company had blamed growing competition from counterfeiters and cheap generic brands. That rebound made Philip Morris shares the Dow's strongest Wednesday. Some of the weakest stocks belonged to several retailers that hugely disappointed their shareholders. Footstar's (FTS) stock suffered a 31% amputation after the chain said it had understated its accounts payable by $35 million in the latest earnings report. Another retailer, Nordstrom (JWN), saw its stock slide 13% after a profit warning cast doubt on its recent turnaround efforts. The company said a new inventory-management system and higher costs would cap third-quarter earnings to no more than 14 cents a share, at least a nickel below the current consensus estimate. Sears (S) shares fell 10% after a downgrade to Underperform by Goldman Sachs, which joined the crowd worrying about the rising defaults in the department-store chain's huge credit portfolio. Over in the tech sector, IBM's (IBM) gain was proving to be a loss for EDS (EDS). Big Blue's shares rose slightly on reports that it was closing in on a seven-year, $5 billion contract to run most J.P. Morgan Chase (JPM) computer operations. The news represents another setback to rival EDS, which recently fumbled a potential $8 billion outsourcing deal with Procter & Gamble (PG). EDS shares fell 1%. Bonds were mixed following Greenspan's testimony. The yield on the 10-year Treasury note inched up to 3.85% from Tuesday's 3.84%, while the two-year note yielded 1.71%, down from 1.75% a day earlier.