Weekday Commentary
from Scott Middleton
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Market WrapUp for the Week
Monday l Tuesday l Wednesday l Thursday l Friday
Week in Graphs 
Storm Watch 
Geopolitical News 
Energy 
Precious Metals 
Raw Materials
Tuesday, October 29, 2002
Confidence Lost
Recording its first back-to-back decline in three weeks, the S&P 500 Index fell, after the Conference Board said its index of consumer confidence fell to 79.4 from 93.7, posting its lowest reading in nine years and the fifth straight decline.
Energy shares such as Exxon Mobil Corp. and ChevronTexaco Corp. declined after BP Plc, Europe’s largest oil company, lowered production forecasts. Computer related stocks were dragged down by Cisco Systems Inc. amid concern a rebound in earnings will be delayed by a stalling economy.
All three of the major indexes spent most of the day in the red with the Dow being down as much as 169 points during the session. However, before the day ended, Procter & Gamble was given all the credit for the turnaround in the Dow as they posted a 33% profit increase this afternoon. The results were attributed to increases in sales of many of P&G’s product lines along with additional restructuring savings.
Without P&G the Dow would have finished down 22 points today. Before P&G’s announcement the market was telling us that the confidence numbers were something to be concerned with. The fading consumer confidence is an indication of a lack of confidence in the ability of this economy to grow and generate jobs, and if there are concerns about the economy, there is going to be doubts on corporate profitability.
Financial Markets
The S&P 500 Index fell 8.08, or 0.9% to 882.15, with energy and computer stocks contributing half the loss. The Nasdaq Composite Index shed 15.18, or 1.2% to 1300.65, and the Dow, helped by P&G, rebounded from a 2% drop and closed with a gain of 0.90 to 8368.94.
Volume totaled 1.42 billion on the NYSE and 1.56 billion on the Nasdaq Stock Market. Losers led winners by an 18 to 14 on the NYSE and 18 to 15 on the Nasdaq.
Overseas Markets
European stocks slid after consumer confidence plunged to a nine-year low in the U.S., the biggest customer for the region's products. DaimlerChrysler, which makes half its sales in the U.S., had its biggest drop since September 2001. Royal Philips Electronics NV, which sells flat-screen televisions in North America, also declined. The Dow Jones Stoxx 50 Index fell 4.5% to 2459.87, the most in almost a month. All eight major European markets were down during today’s trading.
Japanese stocks fell, led by automakers, after Honda Motor Co. lowered its full-year profit forecast. The nation's second-largest carmaker had its biggest drop in four years. The Nikkei 225 Stock Average fell 0.6% to 8708.76.
Treasury Markets
The 10-year Treasury note skyrocketed 1 5/32 to yield 3.95 percent while the 30-year government bond soared 1 1/4 to yield 5.025 percent. Separately, Moody’s Investors Service noted that corporate bonds have not responded favorably to the stock market’s three-week rally. In fact, investment grade bond yield spreads remained wide as Corporate bond investors have refused to bid aggressively for most corporate debt obligations.
Copyright © Scott Middleton
October 29, 2002