Analysts Say Six-Week Curse May Be Over
Oct 17, 2000 (Tech Web - CMP via COMTEX) -- The smoke seems to be clearing from
the massacre of the last six weeks, as Tuesday's market is cleared for a much
more steady performance.
"The last six weeks are over and done, and we're starting to see the bright
light," said Arthur Hogan, chief market analyst at Jefferies & Co., Los Angeles.
Investors are eager to hear the earnings announcements that begin after market
close Tuesday, starting with results from chipmaker giant Intel Corp. (stock:
INTC).
Hogan said the earnings announcements "clearly can't be as bad as the equity
markets have been."
Hogan credits the morose performance of the market over the last six weeks to
investors' fears of an earnings slowdown, but said "clearly what's happening on
the earnings front is not as violent as the equity valuation compression we have
just gone through."
Hogan said any negative earnings news has already been priced in.
Futures were down more than half an hour before the opening bell, with the
Nasdaq down 5 and the S&P down 1.
As for news that could affect the market Tuesday, Intel will lower the price of
some of its Pentium III chips. The move is part of an effort to win back
customers put off by its product recalls, production delays, and botched
forecasts. Rival Advanced Micro Devices Inc. (stock: AMD) has also reduced its
prices on some of its competitive chips.
"The price war is getting a lot more press than it probably deserves," Hogan
said. "Intel still has 78 percent of the market share on Pentium III or the
comparable space."
Intel will announce its earnings Tuesday after the market closes.
Xerox Corp. (stock: XRX) shares fell 26 percent Monday as the company began
tapping a bank credit line to firm up its financial position. However, the
company denies it is suffering a cash shortage and said it has sufficient
borrowing ability.
On Monday, the Nasdaq composite lost 26.52 points, or 0.8 percent, to 3,290.25,
while the Dow Jones industrial average gained 46.62 points, to 10,238.8. On
Friday, the Nasdaq gained 241 points, or almost 8 percent.
Hong Kong's Hang Seng dropped 99.97 points Tuesday, closing out at 14,873.43.
Japan's Nikkei 225 slid down 172.10 points, to 15,340.22, and South Korea's
Seoul Composite fell 172.10 points, to 15,340.22.
At midday session European markets were on the decline, with Germany's DAX down
9.41, to 6,617.84. The U.K.'s FTSE was down 70.4 points, to 6,215.3, and
France's CAC 40 was up 16.56 points, to 6,104.60.
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