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Stocks erased losses with a strong mid-afternoon rally Tuesday on Wall
Street.

The Dow Jones industrial average gained 51.26 points to close at
7909.50. The Nasdaq composite index was up 6.60 to 1328.98 and the S&P
500 added 5.99 to 838.57. Advances led declines, 1713-1348, on the New
York Stock Exchange in volume of 1,451,882,000 shares. On Nasdaq,
advances led declines, 1644-1534. The Dow rallied nearly 190 points
from the bottom to the close.

There is some sentiment growing in the market that stocks have already
bottomed and are just waiting for the Iraq story to come to a close, a
buy side equity trader told Market News International Tuesday
afternoon. So when equities started to bounce, some real money
investors took the bounce as their cue to do some month end buying to
reduce cash levels, the trader said.

Stocks weakened after the Conference Board said its conseumer
confidence index fell to 64.0 in February from 78.8 in January, with
current conditions spilling to 61.6 from 75.3 and expectations falling
to 65.6 from 81.1. That report overshadowed the National Association
of Realtors' report that existing home sales in January climbed to a
record high of 6.09 million (seasonally adjusted annual rate), topping
forecasts of 6.80 million.

The 10-year note yield fell to 3.81% from 3.84% late Monday.

(AP) "I'd be hard-pressed to say we're in a brave new world," said
Bryan Piskorowski, market commentator at Prudential Securities. "The
market the last few days has been underloved and oversold, so we were
due for a bounce."

The Dow open, theoretical intraday high and low: 7856.42; 7931.14;
7700.53.

(AP) "The market today is frozen with its view of the Middle East and
the macroeconomic situation dominating," said Dennis Ferro, chief
investment officer of Evergreen Investments, speaking Tuesday morning
near the lows of the day. "There have been no rays of sunshine and we
continue to focus on the advent of war."

"It's hard for investors to look beyond the immediate problems with
the uncertainty that has been borne out by the consumer confidence
numbers today," he added.

"The markets are on the defensive," said Michael Sheldon, chief market
strategist at Spencer Clarke LLC. "The perception among investors is
that higher energy prices may last longer than previously thought.
This could cut into consumer spending and lead to lower economic
growth over the course of 2003."

Engineered Support Systems (NASDAQ-EASI), +$3.69 to $35.78, reported
first-quarter net income from continuing operations of 50 cents a
share, a nickel above First Call estimates of 45 cents. The company
raised its 2003 revenue target to $475-$485 million from $460 million.

Overstock.com (NASDAQ-OSTK), -$3.26 to $14.85, said Monday that
analysts' first-quarter earnings estimates for the company "may prove
aggressive given the present uncertain business and retail
environments." Overstock.com CEO Patrick Byrne said the models of the
two analysts who cover its stock "differ substantially." One expected
a profit of a penny a share, the other a loss of similar magnitude.

Stocks with large natural gas holdings included Anadarko Petroleum
(NYSE-APC), -$0.76 to $46.00, Burlington Resources (NYSE-BR), -$0.31
to $46.76, and Pogo Producing (NYSE-PPP), -$0.25 to $38.65. March
natural gas futures rose 44 cents per mm BTU Tuesday to $9.57 after
soaring $2.53 Monday, a one-day jump of 38%. April gas futures fell
$1.03 to $6.58, however.

Amerada Hess (NYSE-AHC), -$0.29 to $43.81, said the G-13-2 well
drilled in Block G, offshore Equatorial Guinea in the Rio Muni Basin,
has confirmed the G-13 discovery made in November 2002. Amerada Hess
has an 85% working interest in and is the operator of Block G.

The Home Depot (NYSE-HD), +$0.66 to $22.84, reported 2002 earnings of
$1.56 per share, topping First Call's $1.52 estimate. Same-store sales
fell 6% in the fourth quarter, though. The Home Depot reaffirmed that
it expects sales for fiscal 2003 to increase between 9 and 12 percent
and earnings per diluted share to increase between 9 and 14 percent.
Analysts surveyed by First Call expected $1.66.

El Paso (NYSE-EP), +$0.45 to $5.00, said Tuesday it has entered into a
purchase and sale agreement with Chesapeake Energy (NYSE-CHK) for the
sale of El Paso's Mid-Continent natural gas and oil reserves for $500
million. Additionally, El Paso said that Southern Natural Gas Company
and ANR Pipeline Company will commence offerings for a total of $700
million of notes this week. El Paso also obtained a new $1-billion
fully underwritten financing commitment in order to retire its Trinity
River (Red River) preferred interest financing and eliminate the
accelerated amortization of this facility. Finally, El Paso said it
has sold its European natural gas trading book.

CT Communications (NASDAQ-CTCI), -$1.79 to $7.21, said it discovered
accounting errors in 2002 regarding access revenues and network
expenses.

Hovnanian Enterprises (NYSE-HOV), +$1.28 to $32.93, reported
first-quarter net income of $1.35 per share, topping First Call's
consensus estimate of $1.03.

Oregon Trail Financial (NASDAQ-OTFC), +$1.74 to $22.30, agreed to
merge with FirstBank NW (NASDAQ-FBNW), +$0.51 to $22.96. Shareholders
of Oregon Trail will be entitled to receive either $22.00 in cash or
approximately 1.028 shares of FirstBank common stock per Oregon Trail
share.

Annuity and Life Re (NYSE-ANR), -$2.09 to $0.76, said it expects to
report significant losses in the fourth quarter due to adverse
mortality and an 2003. The projected loss is driven by continuing
adverse mortality and an increase in reserves associated with the
company's life reinsurance business in response to the receipt of a
large number of open claim submissions that did not fit historical or
expected patterns. The comapny has ceased writing new business, and
said it will not pay a first-quarter dividend.

AmeriPath (NASDAQ-PATH), -$0.63 to $19.74, reported fourth-quarter net
income of 32 cents a share, excluding special charges. Analysts
surveyed by First Call expected 40 cents.

Axcan Pharma (NASDAQ-AXCA), -$1.23 to $10.55, said it intends to raise
$100 million through an offering of convertible notes due 2008.

Overture Services (NASDAQ-OVER), -$1.93 to $15.44, said it will
acquire the Internet business unit of Fast Search & Transfer for $70
million in cash and up to $30 million in incentive payments.

(AP) Federated Department Stores (NYSE-FD), +$0.72 to $25.54, reported
fourth-quarter net income of $1.99 per share from continuing
operations. the company had most recently forecast earnings of
$1.95-$2.05 per share. On Monday, Federated warned that February sales
will be lower due to bad winter weather.

H&R Block (NYSE-HRB), +$1.31 to $38.51, said it expects to exceed its
previously announced earnings guidance for fiscal 2003. The company
now sees earnings of $3.37-$3.52 per share, excluding one-time charges
for a legal settlement. Analysts surveyed by First Call expected $3.35
per share.

(AP) Omnicom Group (NYSE-OMC), +$3.35 to $57.35, reported
fourth-quarter net income of $1.08 per share, matching First Call
estimates.

American Eagle Outfitters (NASDAQ-AEOS), -$0.40 to $14.86, reported
fourth-quarter net income of 54 cents a share, a penny above First
Call estimates, but said February is trending below plan due to weak
mall traffic, likely spurred by colder than average weather,
snowstorms and the high terror alert.

(AP) French engineering group Alstom SA (NYSE-ALS), -$0.27 to $3.62,
said Tuesday it has ended outsourcing talks with Electronic Data
Systems (NYSE-EDS), -$0.67 to $15.75. Under the proposed deal, EDS was
to have managed Alstom's information-technology infrastructure and
applications in 14 countries. "It comes as a surprise. They (Alstom)
had been indicating it was just a matter of time" before the contract
would be signed," JP Morgan's Swantje Conrad said.

CryoLife (NYSE-CRY), -$1.28 to $7.26, reported a fourth-quarter net
loss of 29 cents a share, wider than the 22-cent loss expected by
analysts surveyed by First Call. The company said it has advised the
FDA that it will voluntarily suspend use of the SynerGraft technology
in the processing of allograft heart valves and vascular tissue until
its regulatory status has been resolved.

Creo (NASDAQ-CREO), +$0.05 to $6.50, said it is withdrawing its bid
for Printcafe Software (NASDAQ-PCAF), -$0.84 to $2.40.

Fleming Cos. (NYSE-FLM), -$1.12 to $1.85, said it will cut 1,800 jobs,
or 15% of the positions in its continuing operations. Fleming said
that a previously announced inquiry by the SEC has moved to a formal
investigation.

Applebee's International (NASDAQ-APPB), +$1.70 to $24.79, said
comparable sales for the four-week period ended February 23 rose 3.4%
despite bad weather over the Presidents' Day weekend.

Lockheed Martin (NYSE-LMT), +$0.86 to $45.41, said its Commercial
Enterprise Solutions' Outsourcing Center in Orlando, Fla. has achieved
certification following an audit conducted under the Support Center
Practices (SCP) Certification program.

Ryanair Holdings plc (NASDAQ-RYAAY), -$0.68 to $40.20, was lower after
European low-fare competitor easyJet said that softer fares continue
to be experienced compared to a year ago.

Smithfield Foods (NYSE-SFD), +$1.33 to $18.69, reported third-quarter
net income of 5 cents a share, above the 4 cent First Call consensus
estimate, although the hog producer had previously guided earnings
estimates downward.

Dendreon (NASDAQ-DNDN), -$1.32 to $4.47, signed a definitive merger
agreement to acquire Corvas (NASDAQ-CVAS), +$0.38 to $1.80. Each share
of Corvas will be exchanged for a fixed ratio of 0.45 shares of
Dendreon.

(MktNews) Schering-Plough (NYSE-SGP), -$0.27 to $17.58, lowered its
previously reported earnings for the fourth-quarter and 2002 to
reflect higher litigation reserves related to probes into its sales
and marketing practices.

(AP) Atlantic Coast Airlines Holdings (NASDAQ-ACAI), -$0.73 to $6.20,
declined Tuesday after a judge denied the company's bid to force UAL
(NYSE-UAL), +$0.04 to $1.14, the parent of United Airlines, to resolve
uncertainty over their contract. Atlantic Coast, headquartered at
Dulles, serves as a regional carrier for bankrupt United under the
United Express brand. Also in Monday's court proceedings, UAL
considered the close of its Dulles hub. With UAL gone, Atlantic Coast
would lose a major revenue source. Atlantic Coast derives about 85% of
its revenue through its United Express line.

Clear Channel Communications (NYSE-CCU), +$0.78 to $35.38, reported
fourth-quarter net income of 30 cents a share, topping First Call's 27
cent consensus estimate. Clear Channel forecast first quarter 2003
EBITDA of $370-$390 million.

Audiovox (NASDAQ-VOXX), -$0.61 to $8.10, said it will file for an
extension with the SEC in filing its Form 10-K because it is
completing required disclosure. -- edited by Stewart Winograd



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