The Bull Market Report: The Week That Was - A Weekly Recap
WASHINGTON--(BUSINESS WIRE)--Oct. 30, 1998--
Stocks surged again this week after a big gain the week before and a record the week before that! That's three solid weeks in a row. The Dow was up 140 points or 1.7% and the Nasdaq exploded again, up 77 or 4.5%, with The Russell 2000 leaping another 3%. WHO SAYS WE'RE IN A BEAR MARKET?
Here are some of the articles that were found in THE BULL MARKET REPORT this past week:
From Monday's issue:
$$$$$ EBAY JUMPS 25 PCT, DLJ INITIATES COVERAGE
Shares of internet auction company eBay Inc. (NASDAQ:EBAY - news), whose stock price has almost quadrupled since its IPO last month, jumped to $73.38 a share, up $23, or about 46 percent. Donaldson, Lufkin & Jenrette on Monday initiated coverage of eBay, with a buy rating and a 6-to-12 month price target of $100.
COMMENT: We are quite pleased with this result and are buying more at this level. On Thursday of last week we discussed a plan to buy eBay every $4 higher starting from $38. It closed today at $71 1/2 and we are still buying. Those that have followed this concept have accumulated quite a few shares at an average price of $54. We have now placed three sell stops at $66, $64 and $61 to conserve our profits in case it goes down as fast as it goes up. And we have placed buy stops at $74, 78 and 82 to capture more if it moves higher. Donaldson, Lufkin and Jenrette initiated coverage today with a price target of $100 and this was enough to start the stock off at $60, up 10. This story isn't over yet! Earnings will be announced Tuesday evening.
(Ed. note: Earnings were well beyond expectations and the stock closed the week at $83. And the sell stops have been raised to $71, $74 and $77.)
$$$$$ IBM SETS $3.5 BILLION STOCK BUYBACK
International Business Machines Corp. (IBM) said its board of directors authorized the repurchase of up to an additional $3.5 billion of its common shares. The decision, which comes after its third quarter earnings beat Wall Street estimates, marks the second stock repurchase of the year. IBM authorized and bought back $3.5 billion in April as well as a $3.5 billion stock buyback last October.
COMMENT: We have run out of superlatives. This is huge. This is beyond huge! What can we say? The following argument rankles the bears and the naysayers, but one of the reasons for higher stock prices is the fact that corporations are buying back their own stock in bigger and bigger amounts each year. (This is one of our ''14 Fundamental Reasons for a Higher Stock Market'' which can be found at bull-market.com Companies do this because interest rates are low and for a host of other reasons. The end result is that the existing stock is worth more. (Exxon (NYSE:XON - news) has bought back 37% of its stock since 1983!) In IBM's case, it's also like having an outstanding buy order in place for 25 million shares!! This is great news for investors. Who wants to get a large dividend that is taxed twice: Once at the corporate level and once when you get it at the individual level? Not us, for sure. Look for IBM to hit $200 in the next two years or less.
Other big buyers of their own stock are Dell Computers (NASDAQ:DELL - news), Microsoft (NASDAQ:MSFT - news), Cisco (NASDAQ:CSCO - news), Capital One (NYSE:COF - news), Intel (NASDAQ:INTC - news) and General Electric (NYSE:GE - news). The bears complain that dividends are historically very low. This is true but companies are buying their stock back in the 1990's instead of paying out large dividends. We like this trend and we think it is quite bullish.
THE BULL MARKET REPORT comes out every day after the market closes and is delivered to over 8000 investors free of charge via email. It is not available via fax or through the mail. Some of the articles in the newsletter this past week were:
MONDAY: SMALL CAPS RALLY FOR NINTH DAY IN A ROW
$$$$$ EBAY JUMPS 25 PCT, DLJ INITIATES COVERAGE
$$$$$ 3RD QUARTER PC INDUSTRY GROWTH STRONG
$$$$$ AT&T (NYSE:T - news) POSTS GOOD 3RD QUARTER RESULTS
$$$$$ LUCENT (LYSE:LU) SEES NO SLOWDOWN IN GROWTH
$$$$$ QWEST (NASDAQ:QWST - news) NOT WORRIED ABOUT GLOBAL RECESSION
$$$$$ QWEST SIGNS $25 MILLION CONTRACT WITH EQUANT
$$$$$ MERRILL LYNCH (NYSE:MER - news) TO CLOSE OTC DERIVATIVES OPERATION
TUESDAY: U.S. STOCKS FALL ON POOR ECONOMIC NEWS
$$$$$ AMERICA ONLINE (NYSE:AOL - news) EARNINGS SURGE 250% $$$$$ QUALCOMM (NASDAQ:QCOM - news) IN $50 MILLION DEAL WITH U S WEST
(NYSE:USW - news)
WEDNESDAY: MARKET ENDS FLAT EXCEPT FOR THE NASDAQ - UP 20 POINTS OR 1.2%
$$$$$ DELTA AIR (NYSE:DAL - news) SPLITS STOCK
$$$$$ MICROSOFT RENAMES NT SYSTEM: WINDOWS 2000
$$$$$ LUCENT WINS CONTRACT IN BRAZIL
UPGRADES AND DOWNGRADES DEPARTMENT
$$$ QWEST STARTED AS A BUY BY BEAR STEARNS (NYSE:BSC - news)
$$$ COMPAQ (NYSE:CPQ - news) AND DELL STARTED AS BUYS
THURSDAY: STOCKS HAVE BIG DAY DUE TO BRAZILIAN NEWS
$$$$$ INTEL INVESTING IN @HOME (NASDAQ:ATHM - news)
$$$$$ MICROSOFT TO SPEND $90 MILLION ON INTERNET ADVERTISING
$$$$$ AMAZON.COM (NYSE:AMZN - news) CRANKS IT UP (an in-depth article)
$$$$$ EBAY SEARCHES FOR DEALS (an in-depth article)
$$$$$ IBM LOWERS PC THRESHOLD TO $599
EARNINGS DEPARTMENT
$$$ MCI WORLDCOM (NASDAQ:WCOM - news) MEETS ANALYSTS' EXPECTATIONS
Other stocks mentioned this week and that are on either The LONG TERM CORE HOLDINGS list or the 10 STOCKS FOR AGGRESSIVE INVESTORS list are Bristol Myers Squibb (NYSE:BMY - news), Pfizer (NYSE:PFE - news), Freddie Mac (NYSE:FRE - news), Citigroup (NYSE:CCI - news), Mindspring (NASDAQ:MSPG - news), Ascend (NASDAQ:ASND - news), and Charlie Schwab (NYSE:SCH - news). Charlie?
The above are brief summaries of the reports that were issued via email during the past week. For the complete reports, go to the website and look at the Archives.
The BULL MARKET REPORT is a free financial newsletter delivered via email, after the market closes each day. For the full reports or to subscribe to this service, visit them at bull-market.com.
biz.yahoo.com
Regards, Jeff
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