June 13, 2003 — Stocks remain on the downside after another piece of evidence that the economy is not seeing any acceleration that many expected following the end of the Iraqi war. A disappointing June’s University of Michigan Consumer Sentiment Index, which fell to 87.2 from 92.1, well below expectations of 93, suggests that the Federal Reserve is likely to cut interest rates on June 25. Other economic data came near estimates. The May Producer Price Index edged down 0.3% (versus a 1.9% decline in April), while May’s core PPI, which excludes the volatile food and energy sectors,increased 0.1%, compared with a 0.9% drop in April. Also, the April merchandise trade deficit fell slightly to $42 billion from March’s record level of $42.9 billion Economists were expecting a $42.1-billion deficit.

Adobe Systems (ADBE) is weak after issuing a cautious outlook. Auto and semiconductor stocks are broadly lower. Oil & gas drilling stocks are also lower. NYSE breadth is 21-10 negative, Nasdaq breadth is 20-9 negative. Treasuries are higher.

Market Action

S&P 500988.82 – 11.58

NASDAQ Composite1,628.55 – 25.07

Dow Jones Industrial Average9,102.92 – 93.63

10-Year Treasury Yield3.10% (previous close, 3.16%)

DollarLower