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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: lindelgs who wrote (38740)	7/10/2001 8:55:43 AM
From: lindelgs	Read Replies (1) \| Respond to of 65232

Today's Market: Tech Stocks Poised to Gain By Kristen French Staff Reporter 7/10/01 8:43 AM ET (Updated from 7:52 a.m. EDT) Investors were scoffing this morning at a negative outlook from fiber optics leader Corning (GLW:NYSE - news - commentary). Futures that track the major market averages and stocks trading in early action were rising. It's week one of the second-quarter earnings season, and Wall Street may be counting on a repeat performance of the past two quarters, when stocks sold off during confession season only to rally back during reporting season. At least it wasn't all bad news last night. Fiber-optic and chip equipment maker Newport (NEWP:Nasdaq - news - commentary) and video recording services outfit TiVo (TIVO:Nasdaq - news - commentary) both reaffirmed earnings expectations. At 8:21 a.m. EDT, Nasdaq 100 futures, which track large-cap tech stocks, were up 28.5 points, about 19 points above fair value, as calculated by TheStreet.com, indicating a stronger open for tech stocks. S&P 500 futures, which track the broader market, were up 5.9 points, about 1.5 points above fair value, as calculated by TheStreet.com, indicating a flat open. One trader thinks investors are just waiting quietly for earnings reports from Motorola (MOT:NYSE - news - commentary) and Yahoo! (YHOO:Nasdaq - news - commentary), scheduled to be released tomorrow. "Why is the market up? There were rumors all yesterday that IBM would preannounce and it didn't happen," said Matt Johnson, head of trading at Lehman Brothers. "And a Fed governor in Moscow was talking up the second-half recovery scenario. We could also just be at the lower end of a trading range. But it really kicks off tomorrow, with Motorola and Yahoo earnings." The stock market tends to anticipate improvements in the economy and corporate earnings. But a recovery scenario keeps getting pushed further and further out. After weeks of earnings confessions, and at the start of the second-quarter reporting season, there are still few signs that earnings or the economy have really seen the worst of this slowdown. Analysts at Thompson Financial/First Call are forecasting an 18% drop in year-over-year earnings, more than the first quarter's 6.3% contraction. Still, just a week ago, market pros were predicting a summer rally. Fiber-optic cable maker Corning announced after the close yesterday that it was axing 1,000 more jobs, closing three plants and taking about $5.1 billion in charges in a bid to revive its once-thriving photonic technologies business. Worse, Corning said telecom spending could continue slowing for another 12 to 18 months, suggesting a bottoming is nowhere in sight. Yet Corning was lately up 1.3% to $15.30 in early trading on electronic brokerage Instinet. Ciena (CIEN:Nasdaq - news - commentary), JDS Uniphase (JDSU:Nasdaq - news - commentary), Cisco (CSCO:Nasdaq - news - commentary) and WorldCom (WCOM:Nasdaq - news - commentary) were also gaining. Like Corning, French telecom equipment maker Alcatel (ALA:NYSE ADR - news - commentary) also had bad news after the bell, saying it would cut 2,500 jobs in the U.S., or 16% of its workforce here, and close a plant. And a couple of retailers last night joined other merchants that have recently said they will miss earnings targets. Linen's n Things (LIN:NYSE - news - commentary) and youth apparel chain Gadzooks (GADZ:Nasdaq - news - commentary) both forecast weaker-than-expected second-quarter and full-year earnings. But the corporate news wasn't all bad news. Equipment maker Newport said it would meet its second quarter earnings targets, while TiVo said it would be affirming its second quarter and fiscal year 2002 guidance in a release planned for today. Newport also said it would take a third-quarter charge as a result of job cuts affecting about 10% of its workforce. Triton Energy (OIL:NYSE - news - commentary) was jumping 49% to $44.55 in preopen trading on news Amerada Hess (AHC:NYSE - news - commentary) is buying the company for $45 a share. And AT&T's (T:NYSE - news - commentary) board said it would consider Comcast's (CMCSK:Nasdaq - news - commentary) offer for its cable unit, but that it wasn't likely to accept the current $41.4 billion offer. Some Wall Street executives think AT&T will get additional offers for the cable unit. It was Comcast's unsolicited bid for the business that propelled AT&T's stock yesterday and helped boost the Dow Jones Industrial Average. thestreet.com