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Strategies & Market Trends : P&S and STO Death Blow's

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To: Jeff who started this subject5/13/2002 11:47:06 AM
From: exp  Read Replies (1) of 30712
 
11:30 ET S&P to announce new standards for calculating earnings -- WSJ
According to a story in this morning's Wall Street Journal, Standard & Poors is expected tomorrow to announce new standards for calculating operating results. The most controversial of S&Ps new standards would treat employee stock options as a quarterly expense against earnings. Using the definition of core earnings that S&P has just developed, the P/E of the S&P 500 would rise to 30x estimated 2002 earnings vs 22x under the old method.

This fundamental news spells big trouble for SPX and COMPQ as it affects Fed model valuations. Sorry for straying from pure T/A.
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