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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Lucretius who started this subject	5/14/2002 9:05:32 PM
From: Secret_Agent_Man	of 436258

financialsense +* "Technology stocks lit up the Nasdaq on expected news that Applied Materials would beat analysts’ expectations. The company reported profits of $0.03 a share, beating analyst estimates of a profit of $0.02 a share. Second quarter profits fell more than 86% while sales fell by 46% from a year ago. Sales fell sharply because semiconductor makers cut equipment budgets as demand for computers fell. Gross margins also declined from 46% to 40%. The company is holding a press conference tomorrow where it is widely expected to announce further layoffs of personnel. The stock rose 6% for the day and helped spark a rally in the tech sector because the news was better-than-expected. They beat estimates by a penny, even though real earnings fell by $0.16. Given the dismal outcome of this quarter’s earnings reports, analysts are already trimming back dramatically their estimates for the next quarter. The benchmark for earnings are being lowered to such a point that we could actually see another round of better-than-expected results that are worse than the year before. Earnings estimates have dropped from 9% for the second quarter to 6.8%. That is before next month’s earnings game begins again. Remember that what analysts and the financial media call earnings aren’t the same earnings of the past. Today, those earnings can mean anything but the bottom line. With interest rates on the rise and consumer and corporate balance sheets loaded with debt, I doubt we are about to see miracles. Nonetheless, the markets moved on expectations. Speculators sold off gold, utility, and tobacco shares and jumped on techs. Traders were buying chip, Internet and software issues on the news of better-than-expected earnings from Applied Materials. It is another Cisco story that spun the markets, even though the real news portrayed a different picture. It didn’t matter with investors in a buying mood. It is just the first inning of the earnings game. Stocks are hyped up and investors are filled with hope. Then next month reality sets in as the first wave of warnings hits the markets. It is a familiar game played over and over like the slot machines in Vegas. In the broader market, shares of brokerage, biotech, airlines and retailers rose. Oil shares pulled back as the price of oil rose to an even higher level of $29.19 on the NYMEX. Volume rose to 1.41 billion on the NYSE and 2.59 billion on the Nasdaq. Market breadth was positive by 22 to 10 on the big board and by 24 to 11 on the Nasdaq." financialsense.com

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