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Stocks Move Lower On Light Trade
BY VINCENT MAO

Posted 3/9/2006

Stocks ended Thursday's session moderately lower ahead of tomorrow's jobs report. An early morning rally fizzled after National Semiconductor's bleak sales forecast.

As of 4 p.m. Eastern, the Dow lost 33 points, or 0.3%, to 10,972; the S&P 500 dropped 6 points, or 0.5%, to 1272 and the Nasdaq declined 18 points, or 0.8%, to 2250. The small-cap S&P 600 fell 0.4%. Nasdaq volume fell 4% to 2.1 billion shares. NYSE volume declined 4% to 1.7 billion shares.

In economic news, the U.S. trade deficit soared to $68.5 billion in January, much higher than estimates for $66.5 billion. The deficit with China rose 9.9% to $17.9 billion. U.S. exports rose 2.5% to an all-time high of $114.4 billion. Imports also set a record, rising 3.5% to $182.9 billion.

Meanwhile, weekly jobless claims rose 8,000 to 303,000.

The all-important February employment report will be released tomorrow morning. Non-farm payrolls are expected to rise 210,000 with an unemployment rate of 4.7%.

In earnings news, National Semiconductor (NSM) dropped 85 cents to 27.18 after it forecast fiscal fourth-quarter sales growth well below views. The chipmaker reported third-quarter income of 37 cents a share, up 76% from a year earlier, and a nickel above views. Revenue rose 22% to $547.7 million. It guided Q4 sales growth between 2% and 4%, well below the consensus estimate of 19%. The company also joined fellow industry peers Intel (INTC) and Texas Instruments (TXN) who have recently disappointed the Street.

The Philadelphia Semiconductor Index lost another 1.4%, bringing its loss to 7.8% over the past five sessions.

Elsewhere, Matria Healthcare (MATR) gapped below its 50-day moving average, falling 4.38 to 38.90 in huge trade. Stifel Nicolaus downgraded the stock to hold from buy. Matria also named a new CFO, a former HealthSouth employee.

Casey's General Stores (CASY) gapped down 3.05 to 23.22 on monster volume after missing estimates. Late yesterday the company reported third-quarter profit of 14 cents a share, down 7% from a year ago and 6 cents below views.

Aqua America (WTR) dropped 1.94 to 27.37 after it missed views. Shares gapped below its 50-day line on six times normal volume. The water utility firm reported fourth-quarter earnings of 17 cents a share, down 19% from a year ago and a penny below views. Revenue rose 26% to $48.6 million.

IBD 100 firm OptionsXpress (OXPS) dropped for the third straight session in above-average volume, falling 1.73 to 26.88.Yesterday, it reported a 64% jump in February daily average revenue trades, but that was 11% below January's level.

MSC Industrial Direct (MSM) gapped down 3.47 to 44 and broke below its 50-day line on three times average. Mutual fund ownership of the industrial products distributor fell from 158 funds in March 2005 to 144 in December. Sales growth has slowed to the low teens after being in the high teens for four quarters.

Euronet Worldwide (EEFT) fell 62 cents to 34.41 on double normal volume. Shares were downgraded by Morgan Keegan to market perform from outperform. Revenue growth of the electronic transactions processor has recently decelerated in the last two quarters.

Microsemi (MSCC) dropped 2.10 to 27.41 on double its average trade. Shares have fallen for four straight sessions.

In industry group action, the Internet E-Commerce group fell 1.2%. IBD 100 OptionsXpress (OXPS) fell 1.73 to 26.88; E*Trade (ET) eased 35 cents to 23.99 and TradeStation Group (TRAD) lost 57 cents to 15.02.

There were a few bright spots on the earnings front.

Coldwater Creek (CWTR) gapped up 3.85 to 25.56, an all-time high, after beating views. Late Wednesday the specialty women's retailer reported a fourth-quarter profit of 20 cents a share, a 67% increase from a year earlier and 3 cents above estimates. Sales jumped 41% to $287.9 million. That was also well above estimates. Its industry group — Retail-Clothing Shoe — has been under pressure of late but recently found support at its 50-day moving average.

Veritas DGC (VTS) added 2.06 to 43.66 on double normal volume after beating views. Late Wednesday, the provider of imaging services to the oil and gas industry reported second-quarter earnings of 81 cents a share, up 59% from a year ago, well above views of 67 cents a share. Sales rose 24% to $238.9 million.

IBD 100 firm GFI Group (GFIG) rose 2.44 to 54.25 in heavy trade. Shares are back above its 50-day moving average after a recent sell-off. On Monday, the company reported an 88% jump in quarterly earnings. Mutual fund ownership of the brokerage services company grew from 39 funds in March 2005 to 61 in December.

Daktronics (DAKT) rose 1.16 to 36.89, an all-time high. The electronic scoreboard and display maker recently reported a 67% jump in quarterly profit. Sales have accelerated for three quarters. Its Overall Rating of 96 from IBD Stock Checkup are tops in the 30-member Commercial Services-Advertising group.

In industry group action, the Transportation-Services group was among the top performers, rising 2.2%. UTI Worldwide (UTIW) gained 3.04 to 103.20; EGL (EAGL) rose 1.91 to 38.46 and Expeditors International of Washington (EXPD) rose 1.59 to 78.95

Another notable group, Metal Producers-Distributors bounced 1.1% after recent weakness. IBD 100 firm Empire Resources (ERS) rose 1.02 to 18.75; AM Castle & Company (CAS) added 1.44 to 26.81.

At the New York Mercantile Exchange, the April contract settled at $60.47 a barrel, up 45 cents. On Wednesday, weekly crude inventories rose 6.8 million barrels, much more than expected. Crude stocks are at the highest level since May 1999.

Gold ended a four-session losing streak. April gold settled at $547 an ounce, up $2.70 for the day.