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To: Gut Trader who wrote (14920)	4/18/2000 6:35:00 PM
From: stockman_scott	Respond to of 35685

UPDATE 1-Bruised Microsoft seen hitting profit goal By Scott Hillis <<SEATTLE, April 18 (Reuters) - Microsoft Corp. (NasdaqNM:MSFT - news) may be down, but it's not out. So say analysts who expect the software giant to meet or beat third-quarter profit expectations on Thursday despite a month of bad news that included a federal judge's stinging ruling that the company was a predatory monopoly. While no one expects a blow-out performance by the Redmond, Wash.-based company, few analysts doubt Microsoft, developer of the popular Windows computer operating system, will fail to deliver the 41 cents a share expected by Wall Street. If it does perform, profits will have risen a solid, if not spectacular, 17 percent in a quarter that saw sluggish PC sales due to lingering concerns over the Year 2000 computer problem. ``We're fairly confident it will be close to the consensus,' Scott McAdams, president of Seattle-based brokerage McAdams Wright Ragen, said of Microsoft's expected profit. April has not been kind to the Redmond, Wash.-based company. Following U.S. District Court Judge Thomas Penfield Jackson's ruling, Microsoft faces potentially damaging penalties from the government's antitrust suit that could be as drastic as a break-up. If that wasn't enough, the ruling sparked a big sell-off in Microsoft stock, which sank as much as 37 percent from its 52-week high as panicky investors fled. The dizzying fall stripped the company of tens of billions of dollars in market capitalisation and toppled it from its lofty perch as the world's most valuable company. But despite the ruling, Wall Street analysts have largely given Microsoft a clean bill of financial health, saying the company has a strong line-up of products coming out this year and that sales of Windows 2000 appear strong. Indeed, on Tuesday, Microsoft said it had sold 1.5 million copies of Windows 2000 in the two months since its launch, a pace four times that of its predecessor, Windows NT 4.0. ``I think that's a little better than expectations, though it's hard to know exactly what their expectations were,' said Brian Goodstadt, an analyst with the S&P Equity Group. Microsoft shares rose 4-11/16, or 6 percent, to close at 80-9/16 on the Nasdaq on Tuesday. Although the benefits to the bottom line of Windows 2000 are not really expected to kick in until later this year, the new platform could give Microsoft a small boost in a quarter with little else to recommend it. ``This would not have been a stellar quarter for them,' said Rob Enderle, an analyst with the Giga Information Group, a technology research firm. Rick Sherlund, a prominent analyst with investment house Goldman Sachs who is a respected Microsoft authority, warned last week that a sluggish PC market could trim Microsoft's revenues to $5.75 billion from $5.95 billion. That could translate into a fall in profits of 2 cents a share, Sherlund said. Other analysts said that, while the PC market may have shown signs of weakness early on, it appeared computer buying was still robust. ``The last quarter was very weak ... and some of the weakness may have carried over into this quarter,' Goodstadt said. ``The key to look for is whether sales have picked up in the latter part of the quarter, which I think they have.' That meant that Windows and the Office suite of business software were expected to still account for big slices of the company's sales, Goodstadt said. But regardless of how the core business has performed, Microsoft also has an old trick up its sleeve -- a $30 billion pile of cash and investments that it consistently taps to help it meet or beat profit expectations. The technique usually adds a few cents per share to earnings and this quarter is expected to be no different. ``There's a certain component that's fairly predictable and regular. There's kind of a core level that is part of the picture,' McAdams said of Microsoft's habit of padding earnings with investment gains. Looking ahead, analysts said Microsoft was likely to post good results for the rest of the year as it launches an update for its consumer version of Windows, gains a foothold in the hand-held computer market and sees snowballing demand for Windows 2000.>>

To: Gut Trader who wrote (14920)	4/18/2000 6:36:00 PM
From: Dealer	Read Replies (2) \| Respond to of 35685

MARKET SNAPSHOT Good earnings reports propel market Dow, Nasdaq on fire By Julie Rannazzisi, CBS MarketWatch Last Update: 6:29 PM ET Apr 18, 2000 Bond Report NEW YORK (CBS.MW) -- Encouraged by a flurry of positive earnings results in both tech and non-tech companies, the bulls stampeded on Wall Street Tuesday. The frenzied buying was concentrated in technology shares and took the Nasdaq to its largest point gain in history. The Nasdaq has risen a remarkable 14 percent over the past couple of trading sessions and is up a whopping 17.5 percent from its low of 3,227 reached in intra-day dealings Monday. But the tech-packed index is still down nearly 25 percent from its record close of 5,048 on March 10. "Everyone is conditioned to buy the dip. People don't want to be left on the side. And everyone's breathing a sigh of relief right now," said Peter Boockvar, equity strategist at Miller, Tabak & Co. The market's furious comeback following last week's rout is by no means unexpected, Boockvar said. And momentum is making the upside move just as violent as it was on the downside, he said. Regional market coverage North America Europe Asia ADR Report Currency rates Intl' Indexes While Monday's rally was extremely selective in nature, investors' increased confidence translated into a broad advance on Tuesday, with improved market breadth and impressive climbs in second- and third-tier names. In fact, the B2B and biotech sectors -- which had been shunned for weeks -- came roaring back. Within the tech arena, Internet, networking and computer software stocks were the star performers. The Goldman Sachs Internet Index rose a whopping 11.2 percent. The broader market, meanwhile, got a boost from a stellar showing in financial stocks. Bank and brokerage shares benefited from a slew of better-than-expected earnings reports and expectations that the market's return to health will improve their bottom line in the second quarter. The only areas that ended in the red were the utility, paper chemical and gold sectors. The Dow Industrials tacked on 184.91 points, or 1.8 percent, to 10,767.42, led by shares AT&T, Microsoft, Johnson & Johnson, Citigroup and Intel. The Nasdaq Composite climbed 254.41 points, or 7.2 percent, to 3,793.57, ending at session highs on high volume. The Standard & Poor's 500 Index gained 2.9 percent while the Russell 2000 Index of small-capitalization stocks put on 5.8 percent. Volume was heavy, checking in at 1.09 billion on the Big Board and at 2.15 billion on the Nasdaq Stock Market. Market breadth improved markedly from Monday with advancers beating decliners by 20 to 10 on the NYSE by 33 to 11 on the Nasdaq. Wait-and-see mode While encouraged by the rally, many market watchers took a wait-and-see approach to Tuesday's price action. Todd Gold, technical strategist at Gruntal & Co., said two days of rallies don't signify the market has reached a bottom and that the worst is over. A marked and sustainable improvement in market internals is needed, he said, in order to successfully push through resistance. Gold said it's unlikely the market will witness a V-shaped bottom. It's more likely prices will chop back and forth in order to form a base from which to stage a solid rebound. A V-shaped bottom, Boockvar said, would render the market more vulnerable to another sharp correction. In addition, Boockvar warned that the reasons the market sold off so badly last week -- inflation fears and overvaluation -- didn't disappear. "A bear market should not end in a month and a half. It should take four to five months to clear out the excesses," said Bill O'Neil, founder and chairman of Investor's Business Daily. Thus, be ready to see prices whipsaw back and forth as the markets "base" and prepare for their next lasting advance. O'Neil remains bullish for the long term. "Technology and the Internet are here to stay," he said. Once the healthy process of washing out the excesses takes place, he sees a roaring bull market returning in the fall. O'Neil suggests that investors still on margin or fully invested use rallies to decrease their leverage. On fire sectors The business-to-business sector rebounded smartly, with Merrill Lynch's B2B Holdrs (BHH: news, msgs) up 18.1 percent. Sharp gains were seen in Commerce One, up 12 to 82 3/8, Retek, up 6 3/8 to 23 1/8, and FreeMarkets, up 19 1/4 to 72. Agile Software jumped 16 3/16, or 78 percent, to 36 7/8. USB Piper Jaffray upgraded FreeMarkets to a "strong buy" rating from a "buy" rating. See Rating Revisions. And Merrill's Internet Infrastructure Holdrs (IIH: news, msgs) jumped 29.7 percent. Vitria Technology put on 17 3/8, or 82.2 percent, to 38 1/2, and BroadVision, up 11 1/8 to 38. Vitria benefited from Credit Suisse First Boston's reiteration of a "strong buy" rating on the stock. In addition, the company (VITR: news, msgs) posted a loss from operations of a penny a share in the first quarter, two cents ahead of the First Call estimate of a loss of 3 cents a share. The online brokerage sector also saw sharp gains, helped by a backdrop of positive quarterly results as well as expectations that there will be huge increases in account growth. DLJdirect posted first-quarter earnings of 13 cents a share, well ahead of the First Call estimate of 4 cents a share. The stock (DIR: news, msgs) climbed 1 3/16 to 10 3/4. Shares of E-Trade(EGRP: news, msgs) put on 3 5/16 to 21 1/2 while Ameritrade piled on 2 9/32 to 17 1/8. See full story. In other news, PaineWebber (PWJ: news, msgs) checked in with first-quarter earnings of $1.16 a share versus the First Call estimate of $1.09 a share. The stock rose 2 11/16 to 41 1/2. Other brokerages rose in tandem, with Merrill Lynch up 9 1/4 to 99 1/2 and Goldman Sachs up 6 1/4 to 93 3/4. Earnings deluge After the close Tuesday, Intel (INTC: news, msgs) posted a first-quarter profit from operations of 88 cents a share, beating the First Call estimate of 69 cents a share. Read full story. Earlier in the session, Morgan Stanley Dean Witter upgraded the company to a "strong buy" rating from an "outperform." Shares of Intel closed up 6 to 129 before falling to 124 3/4 in after-hours dealings. See After Hours for post-market trading activity. America Online's third-quarter earnings came in at 11 cents a share, 2 cents ahead of the First Call estimate. AOL shares closed up 1/2 to 59 1/4 and edged up to 59 1/2 in late trading. See full story. Dow-component IBM (IBM: news, msgs) registered first-quarter earnings of 83 cents a share, beating the First Call estimate of 78 cents a share. Big Blue's sales dipped 5 percent in the fiscal first-quarter. Dwindling personal computer sales hurt earnings and Y2K was still a factor in the decline of its hard-disk drive business. But IBM executives expect 2000 will be a good year. View story. Shares ended up 1 7/8 to 113 1/4 but dropped to 112 in after-hours dealings. Another four Dow companies unleashed quarterly results Tuesday. See Earnings Surprises. Coca-Cola (KO: news, msgs) posted a first-quarter profit from operations of 32 cents a share compared to the First Call estimate of 21 cents per share. The consensus analyst estimate included 10 cents per share in charges for the impact of a planned inventory reduction. The stock inched up 1/8 to 48 5/8 after climbing ahead of its report on Monday. See full story. Caterpillar (CAT: news, msgs) registered first-quarter earnings of 73 cents a share, well ahead of the 58-cent per share First Call estimate. The stock lost 11/16 to 40 1/4. Johnson & Johnson (JNJ: news, msgs) posted first-quarter earnings of 93 cents a share, two cents ahead of the First Call estimate. Shares rose 4 to 81 1/2. Finally, Dow component Philip Morris posted first-quarter earnings of 89 cents a share, in line with the First Call estimate. Shares (MO: news, msgs) added 9/16 to 20 11/16. See story. Texas Instruments lost 1/2 to 148 1/2 after running up ahead of its positive earnings release on Monday. The company (TXN: news, msgs) posted first-quarter earnings of 55 cents a share late Monday compared to First Call's 53-cent per share projection. See full story. A.G. Edwards upped the company to a "buy" from an "accumulate" rating. Shares of Wit Capital (WITC: news, msgs) tacked on 1 1/8 to 11 1/2. Late Monday, the company posted earnings of 8 cents a share, handily beating First Call expectations of 2 cents a share. See full story. EMC Corp. registered strong first-quarter earnings Tuesday. The company (EMC: news, msgs) posted earnings of 30 cents a share, 1 cent ahead of the First Call estimate. Shares rose 5 5/8 to 130 1/8. See full story. Pfizer (PFE: news, msgs) registered a first-quarter profit from operations of 28 cents a share, beating the First Call estimate of 25 cents per share. The stock added 1 9/16 to 39 9/16. See full story. Vitesse Semiconductor (VTSS: news, msgs) shed 10 1/2 to 62 9/16. The company posted late Monday second-quarter earnings of 16 cents a share, a penny ahead of the First Call estimate. Shares See story. DoubleClick (DCLK: news, msgs) checked in late Monday with a loss of 11 cents a share in the first quarter, matching the First Call estimate. Shares lost 8 3/16 to 51 5/8. See full story. Novellus (NVLS: news, msgs) posted first-quarter earnings well above Wall Street expectations, with results of 45 cents a share compared to First Call's projection of 39 cents a share. Shares climbed 7 3/16 to 60 11/16. In the bond market, prices ended mixed. Stock watching remained the Treasury market's favorite sport. Treasury's announcement that it will buy back $2 billion in debt Thursday ranging from Feb. 2020 to August 2025 gave only some short-lived support to the market. The 10-year Treasury note shed 5/32 to yield 6.07 percent and the 30-year bond added 12/32 to yield 5.91 percent. See Bond Report. Tuesday saw the release of March housing starts, which fell 11.2 percent to 1.604 million compared to the expected 1.70 million. Building permits lost 4.5 percent to 1.579 million compared to the expected 1.65 million. See full story. Wednesday will see the release of the February trade gap, expected to come in at $27.7 billion, according to a survey of economists conducted by CBS MarketWatch.com.View economic calendar and forecasts and historical economic data. In currency markets, dollar/yen was recently trading at 104.69, up 0.2 percent from the previous close, while euro/dollar lost 0.7 percent to 0.9458. In the commodity arena, May crude added 22 cents to $26.11 while the Bridge CRB index rose 0.75 to 212.75. See full story and view latest commodity prices. Julie Rannazzisi is Markets Editor for CBS MarketWatch.