Stocks May Gain on Earnings
Sun Oct 20,11:49 AM ET
By Nick Olivari
URL: story.news.yahoo.com
NEW YORK (Reuters) - U.S. stocks are likely to rise this week -- if trends in earnings surprises for the current quarter and guidance for the next period continue to hold.
"A lot of money is sitting around at half a percent ready to go to work and people are looking for an excuse," said Clark Winter, chief global investment strategist for The Citigroup Private Bank, with $163 billion in assets under management.
"It's easier to talk about the market three to six months out, but if there are more good earnings surprises, and no astonishing surprises on the geopolitical front ... the horizon is positive."
This will be the second rush week for third-quarter earnings with about 150 companies in the Standard & Poor's 500 index (^SPX - news) scheduled to post results.
Earnings so far have been robust, with the 203 S&P 500 index companies that have posted results showing 14.2 percent growth over the third quarter of 2001, according to Thomson First Call.
Although profit growth is expected to drop to 6.4 percent for the quarter after all companies have reported, investors are looking for any good news in the short term.
About 61 percent of reported results have exceeded analysts' forecasts, Thomson said, compared with an average of 57 percent of companies whose earnings beat expectations.
Better yet, the companies beating estimates, including the world's No. 1 software maker Microsoft Corp. (NasdaqNM:MSFT - news), and the world's largest automaker General Motors Corp. (NYSE:GM - news), have done so by an average of 3.7 percent.
FOURTH-QUARTER GUIDANCE
Investors are also upbeat about what companies have had to say about the fourth quarter. |
