RECAP & STOCKS TO WATCH FOR FRIDAY, 12- 15-00
Stocks have been volatile while listening to every tidbit of election news the past month, but today, as the fat lady sang after Al Gore’s concession speech, traders turned their attention back to things like corporate earnings and the FOMC meeting next week.
Tech bellwether Microsoft (MSFT) became the latest victim of slowing PC sales, as the software giant issued its first-ever earnings and revenue warning after the bell. Slowing
PC sales have already been the cause of warnings from Compaq (CPQ), Gateway (GTW), Apple (AAPL), and Dell (DELL). While Microsoft did expect weakening PC sales early on, "we did not anticipate the rate of deceleration in the world economy that we are now seeing," said John Connors, chief financial officer, during a conference call with analysts. The news wasn’t exactly a surprise as the stock has traded down 23% since the end of Nov. on fears of a warning.
Federal antitrust regulators voted unanimously Thursday to approve America Online's (AOL) proposed $111 billion acquisition of media giant Time Warner (TWX), after the companies agreed to concessions that ended nearly a year of difficult negotiations.
The Producer Price Index rose 0.1%, while the core rate, which eliminates the volatile effects of food and energy, was flat in November. Expectations were for a 0.2% increase overall, and a 0.1% increase for the core rate. The report does little to change expectations that the Fed will shift its bias to neutral at the FOMC meeting on Tuesday. The highlight of the week is the CPI report on Friday, which is expected to remain steady at 0.2% (excluding food and energy).
The Nasdaq Composite finished with a 94- point loss to finish at 2,728. Volume was a pitiful 1.7 billion shares, with 35 stocks making new highs compared to 211 new lows. Blue chips were weighted down by the Nasdaq, as the Dow lost 119 points to finish at 10,674. Volume on the Big Board was 1 billion shares, with 105 stocks making new highs compared to 77 new lows.
Friday will be an important day to watch as we have currently retraced roughly 50% of the last up-trend. Any surprise from the CPI could force shorts to cover and give traders a much needed psychological lift.
Chart of the Nasdaq Composite: tradewindsonline.net
Oracle Corp (ORCL): Reports Q2 earnings of $0.11 a share, $0.01 better than the First Call consensus of $0.10, vs year-ago earnings of $0.06; revenues rose 14.5% to $2.66 bln from a year-ago of $2.32 bln.
Microsoft (MSFT): Company warns for Q2; sees EPS of $0.46-0.47 vs estimate of $0.49. Sees revs of $6.4-6.5 bln vs prior estimates of $6.785 bln. 2001 EPS forecast is now $1.80-1.82 vs consensus of $1.90. Company says current weakness in worldwide economic conditions is resulting in a slowdown in PC sales, corporate IT spending, and consumer online services and advertising. Stock was halted and was trading down over 2 pts after reopening.
Adobe Systems (ADBE): Reports Q4 earnings of $0.31 a share, $0.02 better than the First Call consensus of $0.29, vs year-ago earnings of $0.38. Revenues of $355.19 mln were up 26% from $281.77 in the year-ago period. |
