Thursday March 8, 8:12 am Eastern Time
Stocks Are Expected to Climb at the Open
By Elizabeth Lazarowitz
NEW YORK (Reuters) - Stocks are expected to climb at Thursday's open for the fourth straight session as investors stay hopeful the worst is nearly over for Corporate America's profit picture and ignore a fresh slew of earnings warnings.
Internet media company Yahoo Inc. (NasdaqNM:YHOO - news) late on Wednesday became the latest marquee technology name to confess its earnings were being dented by the slowing economy.
But, as they have in recent days, investors seemed to be shaking off the news a day after positive comments from influential Goldman Sachs strategist Abby Joseph Cohen shined a ray of optimism on Wall Street.
``The market has been pretty beaten down -- five weeks in a row in the Nasdaq -- and it's trying to bounce,'' said Don Ross, chief investment officer at National City Corp.
With more than an hour to go before the opening bell, March Nasdaq 100 index futures were up 26.50 points at 2,014.50, pointing to a 1.3 percent gain at the open. Standard & Poor's 500 index futures for March were up 3.30 points at 1,268.50.
Growing hopes that the U.S. economy can avoid recession with the help of further interest rate cuts by the Federal Reserve, were also bolstering investors' optimism, analysts said.
``It's just a question of can lower interest rates and a friendlier Fed offset the bad earnings,'' Ross said. ``So far, the answer has been no, but sooner or later earnings will bottom.''
Yahoo announced after Wednesday's close that 2001 earnings would probably fall well below already reduced estimates, and said longtime Chief Executive Tim Koogle would step down from that post. The company had sharply scaled back earnings guidance as recently as January.
Yahoo shares slumped to $17-13/16 in pre-open trading from a price of $21 when the stock was halted shortly after trading began on Wednesday.
Communications equipment maker Tellabs Inc. (NasdaqNM:TLAB - news) and TIBCO Software Inc. (NasdaqNM:TIBX - news), which makes applications for the real-time delivery of information, also issued bleak forecasts.
Tellabs cut its earnings and revenue forecasts for the first quarter because of lower-than-expected sales in its Cablespan cable telephony business and its inability to record revenues for some new products.
TIBCO warned its revenues would fall well below Wall Street forecasts, falling victim to the U.S. technology spending slowdown.
Semiconductor maker Cree Inc. (NasdaqNM:CREE - news) stood by its earnings forecast, but warned a slowing market for light-emitting diodes would bite into its fourth-quarter sequential revenues.
The flow of economic data slows to a trickle on Thursday, with weekly jobless claims for the week ended March 3 set for release at 8:30 a.m. (1330 GMT). Claims are expected to have slipped to 359,000 from 372,000 in the prior week according to a recent Reuters survey.
Stocks rose for a third straight day on Wednesday after a top Wall Street strategist urged investors to funnel cash into equities after persistent fears over a soft economy prompted weeks of sharp declines.
Cohen, Goldman Sachs' chief investment strategist, an influential market analyst who is closely identified with the 1990s bull market, issued the third upbeat recommendation this week. She joined Merrill Lynch's David Bowers and Morgan Stanley Dean Witter's Jay Pelosky in advising clients to buy U.S. stocks.
The Dow Jones industrial average (.DJI) climbed 138.38 points, or 1.31 percent, to 10,729.60, marking the blue-chip index's fourth straight rising session. The broad Standard & Poor's 500 Index (.SPX) advanced 8.09 points, or 0.65 percent, to 1,261.89, the first time it rose for three straight sessions since mid-January.
The tech-laced Nasdaq Composite Index (.IXIC) added 19.49 points, or 0.88 percent, to 2,223.92, but closed well off an early rise of almost 2 percent. It was also Nasdaq's third positive close in a row.
In overseas markets, Tokyo stocks fell as investors cashed out after a recent run-up in high-tech stocks. Technology bellwether Kyocera Corp. , the world's biggest maker of integrated circuit ceramic packages, fell sharply, dragging the benchmark Nikkei average (.N225) down 0.58 percent.
European stocks rose amid increasingly popular sentiment that the worst is over for the technology sector. The pan-European FTSE Eurotop 300 index (.FTEU3) was up 0.29 percent.
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