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CLOSING WRAP-UP, Apr. 12
By Jody Osborne, Optionetics.com
4/12/2004 6:30:00 PM

http://www.optionetics.com/articles/article_full.asp?idNo=10219

Stocks rise, although volume remains light as earnings season kicks off. The Dow ($INDU) tacked on 73.53 points Monday, closing the session at 10,515.56. The S&P 500 ($SPX) also gained ground, adding 0.52 percent to 1,145.20. The Nasdaq added 0.61 percent, or 12.60 points, closing at 2,065.48. Volume was extremely light, with many traders taking the day off. The NYSE traded just 1.10 billion shares, with the Naz turning over but 1.47 billion shares. Market breadth was flat on the Big Board, with winners surpassing losers by an 18-to-14 margin on the Naz.

Oil prices continued to rise Monday, pushing a barrel of oil above $38. However, this news hasn’t had a huge impact on stock prices, with the anticipation of better earnings garnering most traders’ attention. Economic news continues to be positive, but this too is taking a back seat to earnings news. Two Dow components that saw solid gains on Monday were DuPont (DD) and ExxonMobil (XOM). XOM rose for obvious reasons, with higher oil prices benefiting the oil sector. However, DuPont got a boost after announcing a job cut announcement that could impact 3,500 workers. The chemical company is restructuring and this move is expected to cut costs. As a result, DD shares moved higher by 1.45 percent.

Shares of Disney (DIS) fell on the session, giving up 2.1 percent following negative comments from Banc of America. Analyst Douglas Shapiro believes that Comcast (CMCSK) will eventually drop its bid for Disney. As a result, he raised his rating on CMCSK to a “Buy” and moved his price target to $41. CMCSK shares added 3.43 percent on the session to $29.24.

The chip sector saw gains Monday, with the Philly Semiconductor Index ($SOX) up 0.68 percent. After the bell, chip equipment maker Novellus (NVLS) announced better than expected earnings, helping push the stock higher in after hours trading. On Tuesday, traders will get Intel’s (INTC) earnings report after the bell. We can expect to see a lot of volume in chip stocks as a result, as trader’s place bets on Intel’s results. There are several chip related companies that are set to announce earnings this week, placing a lot of attention on the group.

Overall, Monday’s session was rather quiet, despite the fact that geopolitical concerns continue to heat up. Nonetheless, traders are expecting strong earnings results for the first quarter and this is keeping stocks above water.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site



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