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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Diamond Jim who wrote (7071)	6/11/1999 10:58:00 AM
From: Dalin	Respond to of 13953

Good buying op!! By Cal Mankowski NEW YORK, June 11 (Reuters) - Profitability of U.S. corporations is bouncing back from last year's depressed levels and the second-quarter reports due out in about a month should make pleasant reading for investors. ''It's going to be a terrific quarter as will the third quarter,'' said Chuck Hill, research director at earnings tracking service First Call. ''We're seeing accelerated growth.'' According to the First Call data, industry analysts expect profits for companies in the Standard & Poor's 500 stock index to be 13.1 percent higher than a year ago. Noting that analysts tend to play it safe and keep their projections a bit on the low side, Hill said that when all is said and done second-quarter profits could be up 15 percent from a year ago. ''Basic industries had to streamline and cut costs to the bone and I think they are benefiting from that,'' said Robert Vile, an investment manager for Trainer, Wortham & Co and manager of the Reserve Blue Chip Growth Fund. He said the Y2K millennium bug may be boosting business for a lot of technology companies. Among his larger holdings Vile expects to see good earnings from companies such as Dell Computer Corp (Nasdaq:DELL - news), Microsoft Corp (Nasdaq:MSFT - news), Lucent Technologies Inc (NYSE:LU - news), Cisco Systems Inc (Nasdaq:CSCO - news) and EMC Corp (NYSE:EMC - news). He expects all of these companies to meet or beat consensus estimates. In the case of Microsoft, he said the software giant is likely to be buoyed by the launch of the Office 2000 upgrade for its business software. Charles Scavone, vice president and senior portfolio manager of the AIM Small Cap Opportunities Fund, expects many of the companies in his portfolio to report year-over-year earnings gains of about 40 percent, similar to their performance in the first quarter of 1999. ''Part of that is that we're attracted to high levels of growth to start with,'' he said. Asked what is behind the resurgence in profits, Salomon Smith Barney equity strategist Marshall Acuff said that there are a variety of factors that are either not as negative as in prior earnings periods or slightly better. For one thing, there is some improvement in the ability of business to raise prices, Acuff said. He said the trend is not universal but the oil sector is one area where companies are getting help from better pricing. Another prop for good earnings is a pickup in overseas economies, Acuff added. He noted that companies are getting help from ''easier comparisons'' with periods a year ago, and in fact those comparisons will get even easier in the third and fourth quarters of 1999. ''Generally speaking the profits will be pretty good,'' he said. In fact the third quarter of 1998 was a low point for earnings with S&P 500 earnings actually down 3.1 percent according to the First Call data. For the upcoming crop of earnings reports, which begin appearing in the second week of July, Hill notes that downward revisions ahead of the reporting period have been smaller than usual. Looking ahead to the third quarter, Hill sees something like 20 percent year-over-year earnings gains. Acuff notes that the stock market has benefited from a period of declining interest rates which has resulted in higher valuations being placed on stocks. But now in an era of rising rates, the earnings all of a sudden become more important if stocks are to move higher. ''Profits are going to take a larger role in looking at stock prices,'' he said. Salomon Smith Barney analysts expect a 0.25 percent increase in the short term rates when the Federal Reserve holds its policy meeting at the end of June. The Fed's target for the short term Federal Funds interest rate is currently 4.75 percent. The Fed recently announced a ''bias'' toward tightening rates which was a shift from its previous neutral stance. This week the 30-year U.S. Treasury bond climbed above 6.0 percent for the first time in more than a year. The Dow industrials closed down 69 points at 10,621 Thursday. biz.yahoo.com