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(07/25/02 8:23pm)
Investors will be analyzing this week's economic data in an attempt to predict the actions of the Federal Reserve. Today, consumer confidence for March will be released. \nEconomists are calling for confidence to slip to 104.2 from a reading of 106.8 in February. Wall Street will also look at the personal income and spending report for February. The report, scheduled for release Thursday, gives investors a sign of how much consumers are spending. If the report shows a positive number, it is a sign that consumption is increasing. \nWall Street will use the economic data to debate whether the Federal Reserve may lower interest rates in the near future. Last Tuesday, the central bank announced that it would lower interest rates by 50 basis points to 5 percent. Many investors, who hoped the Fed would lower rates by 75 basis points, are now hoping that Fed will lower rates before its May 15 meeting. \nLast Week\nFriday, the Dow Jones Industrial Average gained 115.30 to close at 9,504.78. The Nasdaq Composite Index also ended the trading session in positive territory, closing up 31.04 to finish the week at 1928.74. The Nasdaq was able to post a 2 percent gain for the week, while the Dow Jones Industrial Average lost 3 percent. \nStock News\nDrug maker Immunex announced Friday that it would halt late-stage studies on Enbrel for treatment of chronic heart failure. The company also announced that its experimental asthma drug Nuvance did not benefit patients in two studies. News from the company attracted a series of analyst downgrades, while the stock closed down nearly 40 percent. \nOnline and discount broker Charles Schwab said it would reduce its workforce by 11 to 13 percent Thursday. The company announced it now forecasts earnings of 6 to 7 cents a share, after charges, for the first quarter. Analysts had expected the company to earn 11 cents per share for the quarter, according to First Call/Thomson Financial. \nAlso announcing major workforce reductions last week were Motorola and Procter & Gamble. Motorola announced it would cut 4,000 positions. The latest job cut brings the total number of announced layoffs at Motorola to 42,000 since December. Procter & Gamble announced it would be cutting 9,600 jobs worldwide. About 40 percent of the reductions are expected to come from the United States. \nFinal Note\nInvestors might be looking at various international affairs this week, such as the situation in Europe. The European Union is having a difficult time with mad cow and foot and mouth disease. The financial cost of the outbreak could become a big factor for various American companies if the diseases were to be found in America.
(07/25/02 8:23pm)
This week, investors will look at the National Association of Purchasing Management Index and the Labor Department's unemployment number for March. The NAPM number is scheduled for release Monday and is considered one of the best indicators of the condition in the factory sector. A reading above 50 is considered a sign of expansion, while a number below 50 signals economic contraction. The unemployment figure is scheduled for release Friday. Economists are calling for the unemployment rate to rise slightly to 4.3 percent. If the numbers provide signs that the economy is weaker than expected, many will be calling for lower interest rates.\nWall Street might also begin to look to next week, when companies typically announce that their earnings will not meet expectations. According to First Call/Thomson Financial, about 70 percent of the companies that issued earnings forecasts have said their results would be worse than analysts were expecting.\nLast Week\nFriday marked the close of the first three months of trading for the markets. The Dow Jones Industrial Average gained 79.72 to end the first quarter at 9,878.78. The Nasdaq Composite Index also managed a small gain, closing up 19.68 to finish the first quarter at 1840.26. For the quarter, The Dow Jones Industrial Average lost more than 8 percent while the Nasdaq suffered its worst quarter, loosing 25.5 percent.\n"This was a painful quarter. There were too many earnings warnings, which have lowered investor confidence and resulted in large sums of money leaving the market," Alan Ackerman, executive vice president of Fahnestock & Co told MSNBC.com. "The market might have a chance to become more stable in the next quarter as long as the Fed cuts interest rates and we have better news on the tax cut front."\nStock News\nLast Thursday, Tyson Foods said it was terminating its $3.2 billion agreement to acquire meat packing firm IBP. The company is alleging accounting irregularities at a unit of IBP. Friday, IBP filed a lawsuit against Tyson to force it to follow through on its acquisition. \n"Tyson's actions are completely unjustified by anything that has transpired and we will do what is necessary to protect our shareholders and our company," said IBP's chief executive officer, Robert Peterson, in a prepared statement. "We can only speculate that this is a classic case of buyer's remorse."\nLast Tuesday, handheld-device maker Palm reported earnings of 2 cents a share, a penny more than analysts were expecting. Palm also announced plans to cut 250 employees and said further reductions were possible. The company warned that it expects to report a fourth-quarter loss of about 8 cents a share. Analysts had been expecting the company to report a loss of 3 cents, according to First Call/Thomson Financial.\nFinal Note\nOne stock to watch this week is American Express. Last week, Business Week cited a rumor that Citicorp may be looking to purchase the company. Shares of American Express rose more than 7 percent Friday because of the possible takeover.
(07/25/02 8:23pm)
Many companies will report their first-quarter earnings this week. Investors will be looking at those earnings and companies' guidance toward future quarters. Investors should get a good indication of where companies stand by the end of the week. Nearly 30 percent of the companies that comprise the S&P 500 are expected to report their earnings. \nLast week, the Nasdaq gained 14 percent. Now, many investors will be watching technology companies to attempt to determine where the sector stands. Large technology companies releasing earnings this week include AOL Time Warner, Microsoft, Intel, Sun Microsystems, Texas Instruments, Advanced Micro Devices, Apple Computer and Gateway.\nToday's expected earnings\nToday earnings are expected from BankAmerica, Citigroup, Kimberly-Clark, Pfizer and Charles Schwab. \nLast week\nThe markets did not open Friday because of the Easter weekend. Thursday, the Nasdaq Composite Index closed at 1,961.42, up 62.47 points. The Dow Jones Industrial Average also closed in positive territory, closing up 113.47 at 10,126.94. The Nasdaq closed in the black for four consecutive days and gained 14 percent for the week. The Dow Jones Industrial Average gained more than 3 percent for the week.\nStock news\nStruggling online grocer Webvan Group Inc. announced Friday that George T. Shaheen resigned from his position as chief executive officer. Shaheen had run the company since his departure as CEO from Anderson Consulting. Less than two weeks ago, Webvan released an annual report that included a warning from its auditor expressing "substantial doubt" about the company's ability to continue operations through the end of the year. \nNetworking equipment maker Juniper Networks reported first quarter earnings that were on the high side of analyst expectations. Forecasts ranged from 21 to 25 cents a share, according to Thomson Financial/First Call. Juniper's stock closed up more than 15 percent Thursday. \nGeneral Electric reported earnings excluding an accounting adjustment of 30 cents a share on Thursday. The company matched analysts' expectations according to Thomson Financial/First Call. General Electric posted a 16 percent rise in profits and recorded record revenues. The company was helped by the success of its power-systems unit that posted a profit that more than doubled from last year. \n"The record results for the first quarter once again demonstrate the ability of GE's diverse mix of leading global businesses to deliver earnings growth, increased margins and strong cash generation despite a challenging economic climate," GE Chairman and Chief Executive John F. Welch said in a prepared statement.\nFinal note\nRepresentatives from China and the United States are expected to meet Wednesday. Investors and companies who are interested in trade relations between the two countries will watch the meeting closely.
(11/05/01 4:50am)
This week, investors will be watching Congress and the Federal Reserve. Many on Wall Street are expecting the Fed to cut interest rates Tuesday. Many are asking, how big will the rate cut be? Economists are almost evenly divided as to whether the Federal Open Market Committee will cut interest rates by 25 or 50 basis points. The Fed has already cut interest rates nine times this year. \nInvestors will also keep track of government spending programs now in Congress. Republicans and Democrats have been arguing over their competing agendas. Democrats are looking to help the unemployed while Republicans are pushing for tax breaks. Many on Wall Street are predicting a number of stimulus packages will help the nation recover economically.\nLast week\nInvestors brushed off a number of negative economic reports. The markets lost ground, but selling was limited considering the amount of bad news released. Friday, the Dow Jones Industrial Average gained 59.64, to close at 9323.54. The Nasdaq closed down .57 points, to 1745.73. The S&P 500 ended the day up 3.12 points, to close at 1,087.22. The Dow lost 2.3 percent for the week and the Nasdaq lost 1.3 percent. \nStock News\nAetna, BP, Cisco, Disney, News Corp., Qualcomm and Xerox are all expected to report earnings this week.\nFriday, Microsoft and the Department of Justice submitted their settlement agreement to a federal judge. Attorneys general from 17 states and the District of Columbia have until Tuesday to sign on to the deal. Wall Street appears to have applauded the deal. Conversely, opponents of Microsoft have said the deal is too soft. \nThursday, Enron announced it had lined up $1 billion of new credit. Investors have punished the struggling energy firm's stock price in past weeks. At issue are questionable deals run by former chief financial officer Andrew Fastow. The company has taken a $1 billion charge against third quarter earnings due to the transactions. Additionally, the credit rating agency S&P cut Enron's corporate credit and senior unsecured debt ratings to only two notches above junk status.\nFinal Note\nMonday, Cisco Systems Inc. is expected to report earnings. Analysts expect Cisco to earn two cents a share for its fiscal first quarter ended Oct. 27, according to Thomson Financial/First Call. A year ago, Cisco earned 18 cents per share. Many analysts have said that Cisco may have begun to stabilize, even though sales are expected to decline by more than 30 percent.
(10/29/01 3:38am)
This week, the amount of companies reporting earnings will begin to slow. Many companies have already reported their earnings to Wall Street. According to Thomson Financial/First Call, third quarter earnings are likely to show a decline of 21-22 percent when compared to last year. \nInvestors will continue to look for signs that the economy is going to rebound. \nFriday, a weaker-than-expected employment report could move the markets. Investors will also begin to look at government spending and the continued fighting in Afghanistan. \n"What's driving the buying right now is a macroeconomic view that the increased government spending and monetary stimulus due to the attack is going to cause the recession to be shorter than originally anticipated," Mitch Zacks, vice president of Zacks Investment Management, told MSNBC.com. \nLAST WEEK\nThe markets shook off poor earnings reports and gained ground. On Friday, the Dow Jones Industrial Average gained 82.27 to close at 9545.17. The Nasdaq closed down 6.51 points to 1768.96. The S&P 500 ended the day up 4.52 points to close at 1,104.61. The Dow gained 3.7 percent for the week and the S&P advanced 2.9 percent. The tech-heavy Nasdaq was the big gainer for the week, gaining 5.8 percent.\nREPORTING EARNINGS\nA few companies reporting earnings this week include: Chubb, Cigna, Clorox, Delta Airlines, Global Crossing, Kellogg, King Pharma, MetLife, Newmont Mining, Priceline.com, Procter & Gamble, Qwest Communications, Revlon, UAL and Verizon.\nSTOCK NEWS\nFriday, the government announced that Lockheed Martin had won a contract that could be worth as much as $200 billion during the next few decades. Lockheed had been competing for the contract with rival Boeing. Lockheed has announced that the contract could eventually lead to more than 9,000 jobs. Conversely, Boeing announced that it was lowering its 2002 revenue estimates by $1 billion.\nSaturday, News Corp. announced it was withdrawing its offer to purchase GM subsidiary Hughes Electronics. News Corp. withdrew its bid after the board of directors for General Motors failed to make a decision on the deal. \n"We have no option but to withdraw immediately our fully negotiated and financed proposal," News Corp. chairman and chief executive officer Rupert Murdoch said in a statement. "We are disappointed with the board's inaction in the face of an as-yet unfinanced counter proposal."\nFINAL NOTE\nReports of anthrax in the United States have become common for investors. At first, Wall Street reacted to anthrax reports with what appeared to be panic selling. Investors appear to now be dealing with reports in a rational manner. The markets will continue to deal with the threat of attacks.
(10/15/01 4:59am)
This week, investors will look at corporate earnings. Nearly 200 companies will be reporting their quarterly results to investors. \n"We all know the quarter is a total disaster," Charles Blood, market analyst at Brown Brothers Harriman & Co. told The Wall Street Journal. "So it's not only the earnings reports, but what they have to say about what's happened after the attacks and what's happened since."\nLast week, the markets were able to gain ground. All the major indexes had a third consecutive week of gains. The Nasdaq and S&P are above Sept. 11 levels. Technology stocks performed well last week, as the Nasdaq gained more than 6 percent for the week.\nReporting Earnings\nA few companies reporting earnings this week include: Advanced Micro Devices, Apple Computer, Bank of America, Bank of New York, Bank One, Boise Cascade, Caterpillar, Charles Schwab, EMC, Fannie Mae, Ford Motor, IBM, Intel, Kraft Foods, Maytag, Novellus Systems, Teradyne, Texas Instruments and Wells Fargo.\nStock News\nFriday, a mediator was appointed in the U.S. Justice Department's antitrust suit against Microsoft. Attorneys for Microsoft and the government agreed on Professor Eric D. Green of Boston University School of Law to help settle the case. Judge Colleen Kollar-Kotelly named Green as a mediator. Microsoft and the government have been at an impasse since Kollar-Kotelly ordered them to agree.\nPolaroid and Regal Cinema filed for Chapter 11 protection Friday. Polaroid has been struggling since the introduction of digital cameras. Talks between Polaroid and its creditors are under way. \nRegal, the largest movie theater chain in America, said most of its creditors supported the restructuring.
(09/24/01 4:25am)
Wall Street will look at the state of the U.S. economy this week. Last week, it became apparent that many jobs will be lost as a result of the terrorist attacks. Airlines have received a bail-out package from the government, but that will not put people back in the air. Hotel chains have been revealing less-than-stellar occupancy rates. Many restaurants are beginning to offer discounts. Cities are now pleading for tourists. In New York, plays are closing. \nInvestors will get a glimpse at the state of the consumer on Tuesday. Many economists have said strong consumer spending has been a key to the economy. Tuesday's consumer confidence figures could shed light on future consumer spending. \n"If the consumer throws in the towel, it's going to be well-nigh impossible to stay out of a recession," Steve East, managing director of economic and policy research at investment bank Friedman, Billings, Ramsey Group told the Wall Street Journal. "It looked like consumer confidence was sliding before the attack and the odds are that it's going to slide even further."\nLast week\nOn Friday, the Dow Jones Industrial Average lost 140.40 points, to close at 8,235.81. The Dow ended the week down 14.3 percent, experiencing its worst decline since July 21, 1933. The Nasdaq closed down 48 points, to 1,423. For the week, the Nasdaq lost 16 percent. The S&P 500 also lost ground on Friday, closing down 19 points to close at 966.\nStock News\nSaturday, President Bush signed a $15 billion aid package for the airlines. The aid contains $5 billion in immediate grants. The airline industry announced about 100,000 job cuts. Thursday, Delta said it will cut jobs, but did not announce specific numbers. \nFriday, General Electric CEO Jeff Immelt said the company still expects double-digit growth for 2001. The company has announced its profits will be reduced by four cents a share due to the terrorist attacks. According to Thomson Financial/First Call, analysts had been expecting earnings of $1.43 a share. \nGold has been rallying since the terrorist attacks. The precious metal has long been viewed as a safe haven in times of uncertainty. Stocks such as Newmont Mining Corp., Barrick Gold Corp., and Placer Dome Inc have all seen renewed interest in their companies. \nFinal Note\nIn the coming weeks, investors will have to deal with corporate profit warnings and layoff announcements. Wall Street realizes layoffs have a ripple effect. Those laid off have less money to spend. Less money to spend means less business for companies.
(09/18/01 5:13am)
Chain letters urging people to "put money into the markets" were distributed last week via the Internet. Many traders announced they would not sell stocks short. Fund managers said they would not attempt to profit off of terrorism. The Securities and Exhange Commission announced it changed its rules dealing with corporate share repurchase programs. And, the Federal Reserve lowered interest rates by half a percentage before the opening bell even rang (in a show of support, the Bank of Canada, the Swiss National Bank and the European Central Bank also lowered interest rates by half a percentage). Yet, many on Wall Street had the feeling that stocks would suffer on Monday.\nAt 9:33, after a moment of silence and the song God Bless America, the markets opened. In the first trading session since September 11, the Dow dropped a record 684 points. The Nasdaq reached a 52-week low.\nAirlines were hit particularly hard as many investors worry that business and leisure travel will slow. Hotel companies fell as investors realized that less air travel means fewer hotel rooms will be filled. Insurance companies were also lower, many have already announced they will be paying out large attack-related claims.\nSome defense and healthcare companies experienced gains. But, most of the market traded decidedly in negative territory. Before last week's terrorist attacks, many companies had already announced they would have a difficult time meeting expected profit targets. Now many companies are attempting to determine the ramifications of last week\'s events. \nThe major U.S. markets were hit hard on Monday. They may not bounce back quickly. Many companies will suffer financially, especially in the short term, because of the World Trade Center tragedy. But, business will continue. The markets will eventually turn positive. Companies will deal with their situations and look to the future.
(09/10/01 3:58am)
This week, Wall Street will be looking for any news that provides an indication of a rebound in the economy. Last Friday, the Labor Department said that unemployment reached 4.9 percent. The figure was worse than many on Wall Street were expecting; unemployment is now at its highest level in nearly four years. \nMajor markets took the news badly, as the Dow Jones Industrial Average, Nasdaq and S&P 500 all closed in the red. \nThe markets are now approaching lows not seen since the beginning of the year. This week, look for earnings guidance to be scrutinized by investors. In the coming weeks, companies will be warning that they will not reach expected profit targets. If investors are faced with a large amount of warnings, look for the markets to trade lower.\nThe S&P 500 closed Friday's trading session down 20.62, at 1,085.78. The S&P 500 is now at its lowest level since 1998. The Dow Jones Industrial Average ended down 234.99 points, at 9,605.85, and the Nasdaq lost 17.94 points, at 1,687.7. The Nasdaq, down 12 percent in the past two weeks, is nearing a three-year low. \nStock News\nLate in the evening on Labor Day, Hewlett Packard announced it would acquire Compaq Computer in a deal valued at $25 billion. Once the deal is completed, Hewlett Packard will become the largest personal computer vendor in the world and rival IBM in size, according to Reuters. After the merger, Carly Fiorina will retain her position as CEO of Hewlett, and Michael Capellas, CEO of Compaq, will become president. \nLast Thursday, Intel reported that its sales for the third quarter are expected to be at the low end of a range it set in July. The company is now forecasting a decline of as much as 29 percent from 2000 third-quarter sales.\n\"The overall theme of this update is that all of our businesses are performing as expected. Specifically, the microprocessor business continues to follow seasonal patterns and is showing more strength in the second half than in the first half," CFO Andy Bryant said in a conference call. \nOn Friday, Circuit City said that it expects to report a loss in the first half of the year. The company announced that it was affected by weak personal computer sales and an exit from the appliance business. Circuit City's report was quite a contrast from one given by competitor Best Buy only a day earlier. Best Buy announced its sales would surpass Wall Street expectations due to increased DVD and digital television sales.\nFinal Note\nTalk of an interest rate cut has increased after last week's dismal employment report. The Federal Reserve, set to meet on Oct. 2, has cut interest rates seven times this year.\n"The economy hasn't exactly turned on a dime after seven rate cuts and people are very edgy about that," Alan Ackerman, chief market strategist at Fahnestock told MSNBC.com. "It's very likely the Fed will react to the unemployment numbers and perhaps cut rates again"
(04/09/01 3:57am)
This week marks the beginning of a period typically referred to as "earnings season." During this time, companies report quarterly earnings to Wall Street. It is also usually marked with warnings from companies who announce they will make less money than expected. Investors will be interested in not only corporate earnings, but also in the company's earnings guidance for future quarters.\nAfter last week's employment report came in weaker than expected, Wall Street will keep a close eye on economic reports to examine the possibility of the Federal Reserve Board easing rates before its May 15 meeting. Investors will also be monitoring the producer price index and retail sales data that will be released this week. Retail sales data, which will be released Thursday, provides an indication of consumer spending at retail establishments. A continued drop in retail sales could signal that consumer confidence is dropping. \nExpected earnings\nThis week, earning reports are expected from Boston Scientific, DoubleClick, E*Trade Group, Genentech, General Electric, Harley Davidson, Motorola, Redback Networks and Yahoo!.\nLast week\nFriday, the Nasdaq Composite Index closed at 1,720.36 -- down 64.64 points. The Dow Jones Industrial Average was also in the red, closing at 9,791.09 -- down 126.96 points. For the week, the Nasdaq dropped 6.5 percent while the Dow dropped about a percent.\nStock news\nFriday, California's largest utility company, Pacific Gas and Electric, filed for Chapter 11 bankruptcy protection. Saturday, the San Francisco Chronicle reported that Chairman Robert Glynn issued an internal memo late Thursday announcing bonuses and raises for eligible employees of PG&E. In response to the report, Gov. Gray Davis issued a brief statement saying, "PG&E's management is suffering from two afflictions: denial and greed."\nConsumer electronics retailer RadioShack announced Friday that its first quarter earnings will not meet predictions. The company blamed the shortfall on poor margins on mobile phones, satellite televisions and computers. RadioShack also lowered its earnings guidance for the full year. \nIn early trading Friday, Motorola's stock fell to its lowest level in eight years. Motorola, the second-largest mobile phone producer in the world, denied a published report that it was facing serious liquidity problems. \n "Motorola today is financially sound. Any suggestion or erroneous report that Motorola faces a serious liquidity problem is simply not correct and is not supported by fact," Motorola president Bob Growney said in a press release.\nFinal note\nAccording to First Call/Thomson Financial, approximately 70 percent of companies offering earnings guidance for the current quarter have announced they will fall short of expectations.
(03/22/01 4:18am)
The back cover of "Early to Ri$e" claims it is a book everyone younger than 25 should read. I disagree. The caption should have read "a book that some high school and a few college students should read."\nSo why is this book being reviewed? Because its author, Michael Stahl, is a teenager from Leawood, Kansas. At age 17, Michael has written a book, established investment clubs and met with Warren Buffett (a well-known investor). And Stahl tells readers his portfolio of stocks has returned 500 percent per year, for the past two years.\nStahl is quick to point out that he does not invest in dot-com stocks and will not invest in companies that sell tobacco. One of his main points is to invest in companies you know and understand, conducting thorough research before making an investment. \n"Early to Ri$e" is a 252-page book written to serve as a valuable resource for new and young investors. The book covers topics such as mutual funds, stocks, research tools, investment clubs and various types of brokerages. The book points out that it is necessary to save money and make wise credit and spending decisions at a young age. It also discusses the benefits of compounding interest and says that investing early in life can lead to increased gains in the future. It provides data and various definitions associated with investing. \nOne aspect of the book that adds to its value is that it contains a lengthy appendix and index. This means the book can be read straight through or consulted for a quick question. For beginning investors, the book can serve as a quick reference guide.\nThe main problem with "Early to Ri$e" is that most of the information it covers can be found on the Internet -- for free. In fact, throughout the book readers are directed to check out some of Stahl's favorite sites. And the book often repeats itself and appears to deliver the same information in different chapters.\nFor beginning investors, who have some idea about the markets, it might be a better idea to watch CNBC and read the business section of the paper than to purchase "Early to Ri$e." I recommend saving the money and doing some research on the Internet. \nFor investors who have no idea about stocks and investment related topics, "Early to Ri$e" might provide a great starting point for making financial decisions. The book is easy to read and can be a handy reference resource.
(03/09/01 4:36am)
INDIANAPOLIS -- Information technology in today's global business area was the focus of the Kelley School of Business' 55th annual conference Wednesday. The theme of this year's conference was "e' Is the Business: Revolutionizing the Value Chain." \nThe conference featured speakers Sidney Taurel, chairman, president and chief executive officer of Eli Lilly and Co.; Edward Sanderson Jr., executive vice president of Oracle Corporation; and Lawrence Summers, former U.S. Secretary of the Treasury.\nTaurel opened the conference by detailing how Eli Lilly is applying various new technologies to its operations. He discussed how old economy companies are now applying new economy technology. The company is working to position itself for the future, Taurel said, with its new initiative e.lilly., a program designed to act as a business incubator giving potential partners the opportunity to explore new ventures with the company.\nSanderson, who was recently named on of the top 25 consultants by Consulting Magazine, followed Taurel and detailed seven key areas that are affecting e-business. Sanderson talked about trends in e-business and detailed where he thought the sector was headed. \n"Brick and mortar companies will make .com operations as efficient as possible; these channels will be leveraged and total value will be added," Sanderson said. \nThe business school presented alumni awards to Elizabeth S. Action, Bruce Hinton, Roger G. Ibbotson and trustee James T. Morris during a luncheon. Kelley School of Business Dean Dan Dalton ended the awards presentation by honoring Michael L. Hatfield with the Distinguished Entrepreneur Award for his achievements in developing various businesses.\nSummers closed the conference by detailing how changes in technology have affected the world. He said knowledge is the key to the new economy. \n"The new economy is based on knowledge rather than mass, what one can do with their head rather than hands will be increasingly rewarded," Summers said. \nDuring his speech, Summers said knowledge regarding the application of technology would become even more important as more and more people gain access to new technology. He said as a greater number of people access technology such as the Internet, its importance will only increase in society.
(02/27/01 3:41am)
A large amount of economic data will be released this week to the markets. And if this data is weak, investors will be expecting action from the Federal Reserve. The Federal Reserve will meet March 20 to discuss interest rates. \n"We have to see weakness to keep the Fed on track for easing in March," Christopher Low, chief economist at First Tennessee Capital Markets, told CNBC.com.\nConsumer confidence for February will be released at 8:30 a.m. Tuesday. Economists are calling for the figure to fall to 110.0 from January's 114.4. A drop in consumer confidence indicates that consumers are growing more uncertain about the future of the economy.\nWednesday, Federal Reserve Chairman Alan Greenspan will deliver the second segment of his monetary policy address to the House Budget Committee. Traders attempting to determine the possibility of an imminent rate cut will watch Greenspan's testimony very closely. \nLast Week\nThe Nasdaq Composite Index closed up 17.55 points at 2,262.51 Friday. But for the week, the Nasdaq lost over 6 percent. The Nasdaq is trading at its lowest levels in two years. The Dow Jones Industrial Average was down Friday, losing 84.91 points to close at 10,441.90. \nStock News\n• Agilent Technologies released earnings slightly higher than Wall Street's expectations Tuesday. The company then warned that second quarter earnings would be lower than current expectations. Agilent's Chief Financial Officer Robert Walker told reporters he expects Agilent to post a net income between 30 cents and 40 cents a share in the second quarter. Analysts were expecting the company to earn 58 cents a share, according to First Call/Thomson Financial.\n• Motorola Inc. announced Friday it would not meet anticipated sales and earnings figures for the first quarter of 2001. The company also warned it could post a loss from operations unless orders begin to increase. Motorola has recently made a number of cost-cutting moves, including the elimination of 9,100 jobs, or 6.5 percent of its work force.\n• Sun Microsystems warned Thursday its fiscal third-quarter earnings will miss Wall Street expectations due to a slowdown in information-technology spending. Analysts were looking for the computer maker to report earnings of 15 cents a share, according to First Call/Thomson Financial. But Sun officials told reporters last week that earnings will be between seven cents and nine cents a share.\nFinal Note\nWayne Angell, a former governor of the Federal Reserve, said there was a 60 percent chance that the Fed would lower interest rates by half a percentage point early this week.
(02/05/01 4:33am)
This week, talk on Wall Street might again revolve around interest rates. Some investors feel the Fed is not done cutting rates and are hoping for another rate cut at or before its March 20 meeting.\n"The weak economy is causing more layoffs ... and manufacturing continues to be in a recession," Fahnestock's Alan Ackerman told The Wall Street Journal. "All eyes are on the service sector, attempting to measure its strength or weaknesses. The fact for now is the Fed is friendlier, and it may as a result of recent economic data be forced to move before its next meeting."\nReporting Earnings\nAnheuser-Busch, Allstate, Cendant Corporation, Cisco Systems, CNet, Computer Sciences, Disney, Humana, Network Appliances, News Corp., Oxford Health, PepsiCo and MCI Worldcom are all expected to report earnings this week.\nLast Week\nTuesday, the Federal Reserve lowered the federal-funds rate to 5.5 percent. The move followed its surprise half-point cut Jan. 3. The Fed is hoping to stimulate the economy by lowering interest rates.\nFriday, the Nasdaq Composite Index lost 122.29 points, closing at 2660.5. The Dow Jones Industrial Average also lost ground, dropping 119.53 points to close at 10864.1. The Nasdaq composite finished the week down 4.3 percent, but remains up 7.7 percent for the year. The Dow Jones Industrial Average gained 1.9 percent for the week and is up .7 percent for the year.\nAnnouncing Layoffs\nAmazon.com, Intel, DaimlerChrysler, General Electric and JDS Uniphase announced they would be reducing their workforces. According to outplacement firm Challenger, Gray & Christmas, corporations laid off 133,713 employees in December. This is the fourth time labor reductions broke 100,000 since the firm began its survey in 1993.\nStock News\nWednesday, Coca-Cola reported fourth quarter earnings per share of .38 cents, matching analysts' expectations, according to First Call/Thomson Financial. The company announced worldwide unit case growth was 4 percent for the full year. Coca-Cola said it remains comfortable with the current range of analyst expectations for earnings per share in the year 2001.\nAmazon.com reported a fourth quarter loss of 25 cents a share, beating estimates by a penny Jan. 30. A First Call/Thomson Financial survey had produced a mean loss estimate of 26 cents a share for the quarter. The company, which has yet to earn a profit, announced it expects to reach operating profitability by the end of the year.\nFinal Note\nTechnology giant Cisco Systems will report earnings Tuesday. Wall Street is looking for earnings of 19 cents a share from the company. Cisco's report might have a major impact this week.
(12/04/00 5:00am)
This week, the market will look at economic data, trying to determine how much the economy is slowing. Many investors are anxious to see Friday's unemployment report. Economists are predicting the unemployment rate will increase slightly to 4 percent from October's 3.9 percent, according to a survey by Briefing.com.\nIn related news, the Federal Reserve, which engineered the economic slowdown with a series of interest rate increases, announced at its last meeting that a tight labor market is a large threat to inflation. Many on Wall Street are hoping that the Federal Reserve, which meets Dec. 19, will change its interest rate bias to neutral.\n"All eyes are on the Fed," Alan Ackerman, market strategist for Fahnestock & Co. told CNBC. "My best guess is they will move to a neutral bias."\nLast Week\nThe markets finished the week mixed Friday, with the Nasdaq ending the day higher and the Dow losing ground. At one point Friday, both markets were holding onto gains of more than 100 points. Late selling then hit both markets and erased most of the early gains. The Nasdaq closed up 47.36 points at 2645.29 and finished the week down 8.9 percent.The Dow ended the day down 40.95 closing at 10373.54. For the week, the Dow lost 97 points.\nStock News\nComputer maker Gateway announced Nov. 29 that, "considerably weaker-than-expected" personal computer sales would hurt the company's fourth-quarter earnings. The company expects to report earnings of 37 cents a share. Analysts had been expecting the company to report earnings of 62 cents a share, according to First Call. Gateway, which started the week at over $30 a share, ended the week slightly more than $19.\nPepsiCo. Inc. is again in talks to acquire Quaker Oats Co., according to Reuters. Last month, Pepsi made a bid for the company that was not accepted. Coca-Cola then began talks with Quaker, but Coke's board of directors did not approve a deal. Now it appears Pepsi might be making the same offer it made nearly a month ago for Quaker, according to The Wall Street Journal. Pepsi is interested in acquiring the company to gain an upper-hand in the noncarbonated drink area -- a market in which Quaker's Gatorade controls more than 80 percent.\nFinal Note\nThe Nasdaq hit a new low for the year Thursday and is down nearly 50 percent from its March 10 high. Many tech companies have been warning of slowing earnings, and investors appear to be re-evaluating their technology valuations.
(11/20/00 5:19am)
This week, little economic news will be released for the markets. Investors have been scrutinizing economic data in recent weeks, attempting to determine how much the economy is cooling off. \nOne measure of the economy that might be looked at in the near future is retail sales. Friday's lines at the checkout counters might be a good indicator of how much consumers will spend this holiday season. Finally, the markets will still be looking for an resolution to the never-ending presidential election.\nInterest Rates\nDuring its meeting last week, the Federal Reserve announced that inflation, not recession, was still the economy's biggest threat. Many investors and analysts were hoping for a softer tone from the meeting. "You will see a better market when there is more visibility on a rate cut, but clearly we are not there yet," Tim Ghriskey, portfolio manager at Dreyfus Investments, said to CNBC. \nLast Week\nFriday, the Nasdaq Composite fell 4.71 points to finish at 3027.17. The Dow Jones Industrial Average lost 26.16 ending the week at 10629.87. The Nasdaq ended the week only 1.78 points below its closing level a week ago. The Dow ended the week up 26.92 points. "We're still in a volatile and vulnerable trading environment because there's still a possibility that the Nasdaq needs to retest its lows once again and that fourth-quarter earnings reports may contain more disappointments," Alan Ackerman, executive vice president and market strategist at Fahnestock & Co, told to The Wall Street Journal, "It's particularly difficult for traders or investors to take a stance."\nStock News\nBellSouth became the latest telecommunications company to release information stating its earnings growth would not match analysts' expectations. The company announced its bottom line would be affected by its plan to build DSL (digital subscriber lines) for residential customers. Many analysts were less than pleased, but some felt the DSL will be a good long-term move for the company. "It was a necessary investment that will probably pay off over time," said David Lefkowitz, an analyst at Credit Suisse Asset Management, in an interview with CNBC. \nHewlett-Packard released earnings of 41 cents per share Nov. 13, disappointing analysts who had been expecting the company to earn 51 cents, according to First Call. "We are pleased that revenue growth is accelerating, but very disappointed that we missed our EPS growth target this quarter due to the confluence of a number of issues that we now understand and are urgently addressing. I accept full responsibility for the shortfall," said Carly Fiorina, HP chairman, president and chief executive officer in a statement. Hewlett also announced that they had ended discussions aimed at acquiring PricewaterhouseCoopers' consulting business.\nFinal Note\nVolume on Wall Street should be light Friday, due to the shortened trading week. The markets will be closed Thursday and close at 1 p.m. Friday. Look for advancing stock prices if the election is decided this week.
(11/13/00 4:00am)
The markets this week will again be affected by the presidential election and the guidance companies provide investors toward their future growth. \n"The market remains gripped by the political uncertainty, but the real worries for the market are earnings going forward," Peter Cardillo, chief strategist and director of research at Westfalia Investments, told The Wall Street Journal. "Investors do not like uncertainty and the outcome of this election is still up in the air."\nThe Federal Reserve will meet Wednesday to discuss interest rates. Most analysts agree the Fed will not change rates. \n"Interest rates are still at lofty levels and there is no sign of coming down," Bill Hummer, portfolio manager for Wayne Hummer Investments, told CNBC. "Sometimes when this happens, you'll see interest rates start to decline. That is not occurring this time around. I don't think the Fed is going to do anything to ease (the interest rates)."\nIf the Fed does hint that it might ease its stance toward inflation, it could help the markets.\nLast Week\nBoth markets closed notably lower Friday. The NASDAQ finished down 170.99 points to 3029.36, ending the day at its lowest close of the year. The NASDAQ experienced five consecutive days of losses and is down 12 percent for the week. The Dow Jones Industrial Average did not fare much better than the NASDAQ, closing down 231.30 points to 10602.95. The Dow lost 2 percent this week.\nStock News\nHome Depot is expected to release its earnings Tuesday. The company warned investors Oct. 12 that its earnings would not meet expectations. Analysts now expect Home Depot to earn 28 cents a share, according to First Call.\nBest Buy said it expects third- and fourth-quarter earnings to come in at 27 cents and 90 cents a share, respectively. Wall Street had been expecting the company to earn 44 cents for the third quarter and $1.01 in the fourth quarter. In a press statement released Thursday, Best Buy announced that increased promotional activity will lead to reduced gross margins and profitability.\nDell released earnings of 25 cents per share, matching the expectations of analysts. Dell executives announced during a teleconference that they expect revenue growth of 20 percent next year, down from the company's earlier estimate of 30 percent. Investors were displeased with the weaker sales guidance as Dell shares fell nearly 20 percent Friday.\nFinal Note\nThe NASDAQ is down more than 25 percent for the year. Once the outcome of the election is settled, the market might turn positive, but what the market is really watching is the state of the economy. The investors will pay attention to the Federal Reserve's every move Wednesday.
(11/06/00 4:12am)
The market stands to be affected by issues throughout the week. Today, Cisco Systems will release earnings after the close of trading. According to First Call, a business monitoring firm, the company is expected to earn 17 cents a share. Investors are closely watching the release, as Cisco has beaten earnings expectations for the last 15 quarters.\nThe presidential race and the possibility that power could change in the House or Senate will also weigh in on investors Tuesday. \n"The election and how it's going to turn out has got a lot of people jittery," Peter Coolidge, a senior equity trader at Brean Murray told The Wall Street Journal. "It's not so much which way it will go, but the uncertainty. And more important than the presidential race is how the Congress will be comprised."\nTechnology investors will monitor Dell Computer's earnings report, which is due Thursday. The company already warned investors it would not meet earlier estimates. The company is now expected to meet lowered estimates of 25 cents a share, according to First Call.\nLast Week\nFriday, The Dow Jones Industrial Average closed down 62.56 points, finishing the day at 10817.95. The Dow was up 2.1 percent for the week. The NASDAQ Composite Index finished up 22.56 at 3451.58, and gained 5.3 percent for the week. Even with last week's gains, the NASDAQ is still down more than 15 percent for the year.\nStock News\nEuropean media giant Bertelsmann AG announced Oct. 31 it was teaming with Napster to develop a membership-based system which would guarantee payments to artists. Bertelsmann also announced it will drop its lawsuit and gain the right to purchase a stake in the company, according to The Washington Post. The two companies released a joint statement saying they "seek support from others in the music industry to establish Napster as a widely accepted membership based service and invite them to participate actively in this process."\nFriday, PepsiCo admitted it had failed to acquire Quaker Oats, maker of popular sports drink Gatorade. Quaker rejected PepsiCo's "final," according to The Wall Street Journal. Some analysts feel that Pepsi may still entertain ideas of purchasing the company. "If they (Pepsi) were going to do an acquisition, this is the one I'd like them to do," UBS Warburg beverage analyst Caroline Levy said. "It's nice to see them being disciplined on price. I'm not convinced the deal is dead."\nViacom confirmed Friday that is purchasing the parent of Black Entertainment Television for $2.5 billion in stock. Viacom now owns VH1, MTV and Country Music Television. "This accretive transaction is a major step forward in our strategy to expand in the fastest-growing media industry segments and will immediately benefit shareholders, as well as broaden our already formidable presence as the largest national and local platform for advertisers," said Viacom President and Chief Operating Officer Mel Karmazin in a statement.\nFinal Note\nThe market is now entering a time of year in which many traders consider bullish. Last week marked the end of tax-loss selling for mutual funds. November historically is one of the best months for the stock market, said Anthony Cataldo, a professor at Western Michigan University's Haworth College of Business.
(10/30/00 5:47am)
Investors will pay close attention to economic data that will be released this week. The data could provide some insight as to the state of the economy. Reports regarding personal income, consumer confidence, and unemployment are due this week. If investors feel that the economy is slowing down too much, the markets will trade lower. \nCompanies will continue to release earnings this week, including Seagram, Procter & Gamble, and SmithKline Beecham. According to First Call Corporation, third-quarter earnings already released have been strong, especially in technology -- up 40 percent-- and energy is up a whopping 115 percent. \nLast Week\nThe Dow and NASDAQ both closed in positive territory on Friday. The Dow gained 210.50 points closing at 10590.62, ending the week up 3.6 percent. The NASDAQ was up sharply in early trading but was only able to gain 6.18 to 3278.36. The index was down 5.9 percent for the week, and is down 19 percent for the year.\n"I think the market is in the process of carving out a floor. We established a low last week, and we\'ve managed to stay above that low," Greg Nie, chief technical analyst at First Union Securities, told The Wall Street Journal.\nStock News\nMicrosoft acknowledged Friday someone had broken through their security and viewed the source code for a computer program under development. "It is clear that hackers did see some of our source code," Microsoft chief executive Steve Ballmer said Friday during a visit to Stockholm, Sweden. \n"I can assure you that we know that there has been no compromise of the integrity of the source code, that it has not been modified or tampered with in any way." The FBI is investigating the situation.\nThursday, JDS Uniphase released earnings that beat analyst estimates by 2 cents. The company reported earnings of 18 cents a share and announced that revenue grew by 23 percent. \"There is more opportunity now than ever before for JDS Unpihase,\" said CEO Jozef Straus in an interview with Reuters. He added that optical technology is just now entering the city markets, amid flourishing construction of long-haul communication networks.\nNortel Networks reported earnings of 17 cents a share, after the close of trading Tuesday. The earnings beat estimates by 1 cent, but revenues came in $100 million lower than investors were expecting, according to Reuters. On Oct. 24 Nortel closed at 63-5/16, and on Friday the stock closed at 42-9/16.\nFinal Note\nThird-quarter earnings have been strong, but investors continue to punish companies that announce their growth will decline. The markets are now looking for signs that the economy will continue to grow at a sustainable rate.
(10/23/00 5:26am)
The battle for Dow component Honeywell International Inc. heated up Friday, as United Technologies Corporation announced it would not be acquiring the company. Honeywell confirmed its merger discussions with United Technologies were finished Oct. 20, and announced it was considering alternative proposals. \nReuters reported that General Electric stepped in and sealed a deal for Honeywell Saturday. The deal is supposedly worth around $44 billion in stock, or around $55 dollars a share. The proposed acquisition will be the largest ever for GE.\nHoneywell is a leading maker of aircraft electronics, as well as specialty chemicals and automated control systems. According to The Associated Press, the company has about 120,000 employees worldwide and earned $1.54 billion on revenue of $23.74 billion in 1999. Honeywell compliments GE, a leading manufacturer of aircraft engines. GE has many other interests including GE Capital and NBC. If the merger is completed, the company will have an estimated total revenue of $154 billion dollars.\nNicole Parent, a vice president and analyst at Banc of America Securities, told The Associated Press the combined company would have an "amazing fit in aerospace, industrial automated power systems and plastics." She also noted that the companies cultures are similar as Honeywell's Chief Executive Officer, Lawrence Bossidy, is a former top executive from GE. \nOct. 19, CNBC's David Faber broke news of an impending merger between United Technologies and Honeywell. He told the news to GE's CEO Jack Welch, who was on the floor of the New York Stock Exchange. Welch reportedly didn't know about the acquisition until talking with Faber late Thursday. Once GE learned Honeywell was in merger talks, the company quickly moved to put together a deal.\nWelch, who turns 65 next month, had been scheduled to step down as General Electric's CEO. The Wall Street Journal reported he will stay at his post until 2001 as part of the company's effort to acquire Honeywell. General Electric was expected to name a successor to his position in the next two months.\nUnited Technologies had offered Honeywell a deal smaller than GE's offer valued around $50 a share. As investors learned that United Technologies would be outbid, shares of Honeywell rose $10-5/16 -- or nearly 29 percent -- Friday. Shares of Honeywell closed at 46 dollars on the day, while General Electric closed down 3-3/8 at 52-1/4.\nThe outcome of this merger could have an effect on the markets today, as GE, Honeywell and United Technologies represent three of the 30 companies which make up the Dow Jones Industrial Average.\nThe Associated Press contributed to this story.