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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (5791)	12/23/2000 4:19:09 AM
From: J.T.	Read Replies (1) \| Respond to of 19219

Profit Warnings Piling Up by BRUCE MEYERSON AP Business Writer NEW YORK (AP) -- The profit warnings are piling up at a record pace on Wall Street, and while the main culprits have names like IBM and Intel, an unusual number of anguished cries are coming from the non-technology likes of Ford, Coca-Cola and Federal Express. Barely a day has gone by in recent weeks without an onslaught of earnings announcements from U.S. companies hurt by the economic slowdown in the final months of 2000. Happily, the flow of discouraging confessions may slow between Christmas and New Year's. But analysts caution that the distress calls may resume, or even accelerate, as companies tally their final results for the quarter. ''Don't read too much into it if it slows down next week,'' said Chuck Hill, director of research at First Call/Thomson Financial, a research firm that tracks profit forecasts by companies and Wall Street analysts. Last year, he said, more than 40 percent of the warnings about weak fourth-quarter results came after Dec. 31, ''so we're still going to have a little more pain and suffering in the first few weeks of January.'' In all, First Call had recorded more than 430 downward revisions to fourth-quarter forecasts through Thursday, nearly twice as many as this time last year. Obviously, the barrage of bad news has dealt a sharp blow to what little remained of investor confidence in what already was shaping up as sobering year in the stock market. The response has been a selling frenzy that could send Wall Street to its worst year since the early 1970s. As always, technology companies have played a prominent role in reducing their profit and revenue forecasts. And with the severe slowdown in Web-related business activity, the revisions have been especially dramatic this quarter. Investors have grown so skittish that they're even punishing technology companies that meet expectations. On Thursday, for example, Palm Inc. lost a third of its stock value even though the handheld computer maker reported profits in line with forecasts for its latest quarter. The stock recovered slightly in Friday's pre-holiday rebound. ''Expectations and valuations are different (with Palm) than they would be even with Intel, Motorola and Sun Microsystems. These older stocks never reached the ridiculous valuations of Internet stocks,'' said Richard A. Dickson, a market analyst at Scott & Stringfellow Inc. in Richmond, Va. By contrast, he said, many non-technology companies that have issued warnings have held up well because they are in sectors that were beaten down even before technology stocks began to struggle. ''The interesting thing is how many of those stocks have not gone down on those earnings disappointments, '' said Dickson, pointing to companies such as BankAmerica and Caterpillar. ''Right now I think you're seeing the fruits of the pain and suffering that has been inflicted on the market outside of technology up until last March.'' Meanwhile, despite the weakening technology outlook, some analysts are more alarmed by the trouble signs showing up in just about every other industry. ''Contrary to what some people might think, we're not getting that many more warnings from the technology area,'' said Chuck Hill, director of research at First Call. Technology companies have accounted for about 18 percent of the profit warnings, up from about 14 percent last year, he said. ''In past quarters, there was no area that jumped out at you. It was mostly company-specific. You now have clusters of industries or sectors where the reason for the warnings is the slowing economy and higher energy costs,'' The damage has been especially severe at large companies. Among the 500 major companies that make up the Standard & Poor's 500-stock index, there have been more than 120 fourth-quarter warnings, already nearly tripling the 46 that First Call recorded for the final months of 1999. As a result, the combined fourth-quarter profits of the S&P 500 are now expected to show a gain of less than 6 percent from the final three months of 1999, down from the 15.6 percent gain expected when the quarter began. Worse, while most analysts still don't expect the slowdown to bring on a recession -- officially defined as an economy that shrinks two straight quarters -- there's now talk of a potential ''earnings recession'' next year in which profits would decline two quarters in a row. The last time earnings declined even a single quarter was during the global financial crisis in late 1998. ''But that was an outside problem -- this one is a U.S. economic problem,'' said Hill. ''This (slowdown) is much broader in its impact on different sectors and will be much longer-lasting, so I think the odds are we will have a profits recession.'' Best Regards, J.T.

To: J.T. who wrote (5791)	12/28/2000 11:09:24 AM
From: J.T.	Read Replies (1) \| Respond to of 19219

U.S. Nov. Home Resales Rise 4.4% to 5.22 Mln Rate from Bloomberg: By Monee Fields-White and Andrew Ward Washington, Dec. 28 (Bloomberg) -- U.S. sales of previously owned homes rose more than expected in November to a level that keeps the industry on track for its second-best year ever, an industry report showed today. Home resales increased 4.4 percent last month to an annual pace of 5.22 million units, the National Association of Realtors said. That's up from October's revised rate of 5 million units. ``It still seems there's plenty of demand out there in the housing market,'' said Mark Vitner, senior economist at First Union Corp. in Charlotte. ``The strength in the housing market really has some carry-through to the rest of the economy.'' Government securities fell after the home sales report showed the economy isn't collapsing, reducing the odds the Federal Reserve will cut interest rates before next month's policy meeting. The 10-year Treasury note fell 11/32 point, pushing up the yield 5 basis points to 5.15 percent. Still, a separate report today showed the lowest level of consumer confidence in two years. The Conference Board's index of consumer confidence fell to 128.3 in December from 132.6 in November. Less optimism is one reason home sales are seen falling next year, according to an NAR forecast. The NAR said earlier this month that sales of previously owned homes will probably total 4.94 million in 2001, compared with projected sales of 5.01 million this year and a record 5.2 million in 1999. In 1998, 4.97 million previously owned homes were sold. Analysts surveyed by Bloomberg News had expected November sales of previously owned homes at an annual pace of 5.07 million, up from October's initially reported 4.96 million. Regions Last month, resales rose 10 percent in the Northeast to 660,000 units at an annual rate, 8.4 percent in the Midwest to a 1.16 million-unit pace, and 6 percent in the West to a 1.41 million-unit pace. Resales fell 0.5 percent in the South to a 1.99 million-unit pace. The supply of houses available for sale, another gauge of demand, fell to 3.6 months' worth in November from 4.3 months' worth in October. The median price of a home rose 0.9 percent to $139,900 last month from $138,600 in October. Resales account for 85 percent of all houses on the market and are considered an important gauge of consumer demand. Home sales can stimulate spending on goods such as furniture, appliances and decorations. Consumers have continued to buy homes even as their optimism in the overall economy drops. Since falling to an annual rate of 4.82 million units in July, home resales have rebounded and remain close to five million units at an annual rate. Mortgage Applications Mortgage applications have been rising for almost two months, according to statistics from the Mortgage Bankers Association of America. Earlier this month, the MBA's index of mortgage applications rose to 404.8, the highest reading in more than 1 1/2 years. The rise is due in part to lower mortgage rates as well as unemployment near a 30-year low. The average interest rate on a 30-year fixed-rate mortgage has stayed below 8 percent since mid- August, according to Freddie Mac, the No. 2 buyer of mortgages. Last week, 30-year mortgage rates reached a 20-month low of 7.17 percent amid optimism that Federal Reserve policy-makers will soon cut interest rates to keep the U.S. economy from slowing too much. Federal Reserve During its Dec. 19 meeting, the Fed's policy-setting Open Market Committee warned that weakening growth is a greater risk to the economy than accelerating inflation. The U.S. economy expanded at its slowest pace in four years during the third quarter, the Commerce Department said last week. Gross domestic product grew at a 2.2 percent annual rate in the July-September period, down from the previously reported 2.4 percent rate of increase. That was the weakest performance since the third quarter 1996, when the economy grew at a 2 percent rate. The slower pace of growth could lead to a gradual decline in home sales in the months ahead even as interest rates continue to fall, analysts said. The Conference Board's consumer confidence index remains close to its lowest level in more than a year and the Nasdaq Composite Index is down almost 40 percent this year. Housing analysts have cut 2001 profit estimates and stock ratings for homebuilders in recent weeks. Earnings for the 10 biggest U.S. homebuilders is expected to fall to 1 percent in the last six months of 2001 after growing 22 percent in the first half of the new year, according to a survey of analysts by First Call/Thomson Financial. Best regards, J.T.

To: J.T. who wrote (5791)	1/3/2001 3:18:02 AM
From: J.T.	Respond to of 19219

Heating Fuels Plunge on Expectations of Milder U.S. Weather from Bloomberg By Bradley Keoun New York, Jan. 2 (Bloomberg) -- Natural gas futures posted their biggest one-day drop since they began trading 11 years ago, and heating oil fell, on expectations that warmer weather will reduce demand in the northern U.S. Temperatures may reach 40 degrees Fahrenheit (4.4 degrees Celsius) in Chicago by Thursday, forecasters said. Natural gas prices had more than doubled to record highs during the last two months of 2000, which were the coldest in more than a century, according to government figures. ``A reversion from this abnormal winter weather is going to take some of the fluff out of this market,'' said Chris Eades, an energy analyst at UBS Warburg in New York. Natural gas for February delivery fell $1.411, or 14 percent, to $8.364 per million British thermal units on the New York Mercantile Exchange, the biggest one-day decline since gas futures began trading in April 1990. The milder weather forecast for the north-central U.S. will reduce demand in the nation's largest market for gas heat. Temperatures also will moderate in the Northeast, the No. 1 market for heating oil, reaching the lower 40s by the weekend, according to Michael Palmerino, a meteorologist at Lexington, Massachusetts- based Weather Services. Heating oil for February delivery fell 2.51 cents, or 2.8 percent, to 86.58 cents a gallon on the Nymex. Prices rose 31 percent last year. The biggest blizzard in five years struck parts of the Northeast during the weekend. About a foot of snow fell in New York City and as much as 20 inches in New Jersey. ``If it were any other week, the price of heating oil would have jumped,'' said Mike Fitzpatrick, a trader at Fimat USA Inc. in New York. ``Schools and businesses were closed for the holiday, so demand was low to begin with.'' More Frigid Weather Ahead The respite from frigid weather may be short-lived. In Chicago temperatures will be back below freezing by early next week, Palmerino said. Natural gas prices have more than tripled during the past year, reaching a record $10.10 per million Btu last Wednesday, as wintry weather put pressure on U.S. supplies that were smaller than normal at the start of the season. Temperatures in the U.S. during November and December were the lowest for that two-month period in 106 years, said Jay Lawrimore, head of the monitoring branch at the government's National Climatic Data Center in Asheville, North Carolina. ``We basically had one cold front after another come down out of Canada into the U.S. east of the Rockies,'' Lawrimore said. ``It's interesting how things have turned around, because January through October was the warmest January-through-October on record.'' The warmer-than-normal summer weather boosted demand for natural gas to generate electricity for air conditioning, reducing the amount of fuel put into storage for the winter. Inventory Outlook By Dec. 22, inventories were 25 percent lower than a year earlier at 1.938 trillion cubic feet, according to a report last week from the American Gas Association. It was the lowest level for that time of year since the AGA started tracking supplies in 1993. While milder weather this week would reduce demand for gas heat, it would take a prolonged period of higher temperatures to send prices much lower, analysts said. ``We're in a pretty big hole already,'' said Aaron Kildow, an energy analyst at Prudential Securities in New York. U.S. inventories of heating oil as of Dec. 22 were 15 percent lower than a year earlier, the American Petroleum Institute said last week. Best Regards, J.T.