This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

A Day for Defense

Defensive stocks rose modestly Wednesday, as a two-week long rotation into the group continued.

Healthcare equipment shares advanced, with medical device makers Biomet (BMET), Baxter (BAX - Get Report) and Medtronic (MDT) slightly higher.

Among healthcare providers, Oxford Health Plans (OHP) gained after the company reported a near 30% gain in fourth-quarter earnings.

The tobacco sector was also partially green, with British American Tobacco (BTI) adding 11 cents, or 0.4%, to $29.16.

"We are in a consolidation phase right now," said Richard Dickson, a technical analyst at Lowry's Research. "And so, you are seeing people move toward defensive areas."

Drug stocks lifted, with Merck (MRK), Pfizer (PFE), and Johnson & Johnson (JNJ).

Technology shares closed sharply lower, as investors fretted over Cisco's (CSCO - Get Report) sales-growth prospects. The stock is up 88% in the past 12 months.

Cisco trades at 34 times Thomson First Call's 2004 earnings estimates of 71 cents a share. Other tech names are more expensive: Yahoo! (YHOO - Get Report) fetches 85 times estimates for 2004 of 53 cents a share.

"We think the market is very toppy," said Peter Blatchford, a trader at Miller Tabak. "But money is coming into the market. With net positive inflows, it has to go somewhere."

In recent days, investors have sought shelter in more reasonably priced defensive groups. Biomet fetches 30 times this year's earnings; British American Tobacco is valued at 12 times 2004 forecasts; Merck has a price-earnings-ratio of 16; and Johnson & Johnson has a PE of 18.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAX $45.21 1.80%
CSCO $26.40 -1.70%
YHOO $37.13 3.10%
AAPL $93.60 -1.70%
FB $118.29 0.73%


Chart of I:DJI
DOW 17,667.98 +16.72 0.09%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs