Sonny, I read this this am.
Among market heavyweights, Intel Corp. INTC beat downscaled expectations and Compaq Computer Corp. CPQ matched lowered forecasts with their first-quarter numbers. Both signaled their second quarters will be less than stellar.
But the companies' "body English" -- in the words of one analyst -- indicated that the second half of the year will see earnings accelerate. With the prevailing bullish mood on Wall Street, that is enough for money managers to put their mounds of cash into the stocks rather than wait for more concrete evidence.
"Managers are not going to wait till they see the whites of the eyes," said Robert von Pentz, a managing partner at investment firm Columbia Partners. "They know they are well-run companies with big market shares and want to own them."
That desire to own pushed the Dow Jones Industrial Average into record territory this week, ending at 9162 on Wednesday, a 16 percent gain for the year.
The technology-saturated Nasdaq composite also climbed to record heights to 1863, up 19 percent for the year.
Some profit taking set in on Thursday. The Dow was off 78 points, or 0.85 percent, to 9084, and the Nasdaq composite slipped three points, 0.15 percent, to 1860.
The market's ability to look at the bright side of earnings reports is partly based on the same factors that have buttressed stocks throughout the record bull run: expectations of steady U.S. economic growth coupled with low inflation and interest rates.
Analysts also cite prospects for strength in European economies among factors for their anticipation of better corporate profits going forward.
Dorine
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