Interesting story .....
Wall Street Braces For Super Tuesday
By Huw Jones
NEW YORK (Reuters) - Wall Street, buoyed by a surprise interest rate cut by the Federal Reserve, looks this week to Super Tuesday for good news on the corporate earnings front to shore up sentiment.
The third quarter reporting season cranks into high gear Tuesday when a slew of big name companies unveil their results.
''We will be a lot further through the earnings season by then, and one of the key things people are focusing on is that most earnings are above expectations,'' said Courtney Smith, chief investment strategist at Orbitex Management.
''Maybe we had revised earnings down too far, and that's why it's bullish because usually the early earnings are the worst,'' Smith said. ''Here we were expecting the worst, but we don't get that, and at the same time the Fed becomes our friend.''
Analysts said stocks have found a floor for now.
Friday, the Dow closed up 117 points at 8,416, posting its biggest weekly point gain ever of 517.
More such heady gains would be difficult.
''It's vulnerable to profit-taking,'' said Barry Hyman, senior market analyst at Ehrenkrantz King Nussbaum.
Investors hope other central banks such as Germany's Bundesbank, perhaps as soon as Thursday, will also cut their rates to minimize fallout on profits going into next year.
''I am sure we are going to have some more good earnings numbers next week, and I would be looking for further support on the earnings side in the near term,'' said Marshall Acuff, portfolio strategist at Salomon Smith Barney.
''I think the market will be buoyed on some belief there will be another rate cut in November,'' Acuff said, adding he did not expects stocks to gain much beyond current levels.
The Fed's rate-setting Federal Open Market Committee meets on Nov. 17.
The Fed's rare inter-meeting move, its first since April 1994, surprised Wall Street despite many analysts predicting the central bank would take such a step.
The easing may not cure global turmoil, but it should help improve battered sentiment analysts said.
And combined with Japan finally making 60 trillion yen ($517 billion) available to shore up its shaky banks, and Congress passing a budget containing $18 billion for the International Monetary Fund to bolster teetering economies like Brazil's, the interest rate cut should underpin stocks at current levels, analysts said.
''For this market to go down now after the strength of the past week, we need another major bombshell like a big fund going under,'' Acuff said.
Among those reporting Tuesday, International Business Machines Corp. (IBM - news) is forecast by First Call to earn $1.53 per share, up from $1.35 a year ago.
Microsoft Corp. (MSFT - news) is forecast to earn 49 cents per share in its latest quarter, up from last year's 36 cents.
Microsoft's antitrust trial brought by the Justice Department, which alleges the software giant abused is influential position in the computer industry, is also due to start Monday.
Chase Manhattan Bank Corp. is expected Tuesday to report profits of 77 cents, sharply down from $1.13 last year due to financial market turmoil, which has resulted in banks and brokers reporting their worst earnings in years.
First Call still expects overall earnings in the third quarter to be the worst in seven years.
No major economic indicators are due this week.
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