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Strategies & Market Trends : LindyBill's Ballroom -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (169)	10/10/2001 12:10:50 AM
From: stockman_scott	Respond to of 248

STREET WISE -- Finding Your Bearings in the Turmoil Tuesday October 9, 7:57 am Eastern Time BusinessWeek Online By Amey Stone and David Shook Fragile is probably the best word to describe the U.S. economy right now. For the next few days, if not weeks, stocks are likely to trade on military news related to U.S. attacks on Afghanistan and, dare we even mention it, any potential new response from terrorists [see BW Online, 10/9/2001, ``How Will Wall Street Define Victory?'']. ADVERTISEMENT Investors, however, should keep in mind that trading around military action may ultimately have precious little to do with what really drives stock prices -- corporate earnings. The terrorism and America's response ``add noise and uncertainty to the market,'' says Michael Ingraham, director of research at U.S. Global Investors. But the most important factor driving stock prices is what he terms ``a very serious profits recession.'' What will get corporate profits growing again is strength in the U.S. economy. Despite levels of national unease about the future that the U.S. hasn't experienced since World War II, there is plenty of reason for optimism. ALREADY STARTED? While economists and market strategists ponder how deep the recession will be and whether the rebound will come early or later, they almost all agree that growth will resume next year. In fact, many bullish investors believe the market has already started its rally in anticipation of an economic recovery in about six months. For the bulls, drags on the economy are just delaying the ultimate rebound. Not everyone is so sanguine, however. Plenty more bad news is yet to come concerning the economy and corporate profits before any firm signs of a recovery show up. For bears like Edward Yardeni, Deutsche Banc Alex. Brown's chief investment strategist, all the boosts to the economy are just ``important offsets to what otherwise might have been much worse.'' What to expect? Here are some factors for investors to consider as they survey this fragile economy: The Pluses Interest rate cuts: The amount the Federal Reserve has cut short-term interest rates -- nine times since the beginning of the year -- is unprecedented in recent history. ``We haven't seen rates this low in 40 years,'' says Mark Zandi, chief economist at economic consulting firm Economy.com. The Fed has cut short-term rates from 6% to 2.5% and is expected to keep cutting. Many market strategists say such massive easing of monetary policy has always been bullish for stocks. They don't care much if it takes a bit longer this time around for the benefits of the rate cuts to take hold. Fiscal stimulus: No one could accuse the Bush Administration of cooling its heels these days. Along with $55 billion in emergency spending, the Bushies are now proposing tax relief of $60 billion to $75 billion. Merrill Lynch expects fiscal stimulus to total about $150 billion, or 1.5% of gross domestic product. Basically, the Administration has shown willingness to do anything and everything it can to get the economy going. Policy wonks will debate which tax cuts will get the economy moving the fastest and wring their hands over the long-term ramifications on the federal budget, but most observers agree that the economy will get a much needed boost. Lower energy prices: Consumers are already benefiting from lower costs of gasoline and home heating oil. Because Afghanistan produces little oil, CIBC World Markets analyst Van Levy does not expect a spike in crude oil prices, which have dropped 27% from a year ago to a current price of $23 a barrel. He also believes natural gas prices could decline. Soft prices certainly aren't good news for energy stocks, but they do lower costs for consumers and businesses, putting more money in pockets and fueling the economy. Cash on the sidelines: With the stock market sliding for 18 months and bond yields decidedly unappetizing, investors of all stripes have plenty of cash ready to put to work in the stock market once clear signs of an economic recovery appear. Assets invested in money market funds now total $2.23 trillion, according to the Investment Company Institute. And that's not even counting all the cash in stock mutual-fund portfolios [see BW Online, 10/08/01, ``Hoarding Cash in Times of Trouble'']. The Minuses Consumer spending. Buoyant consumer spending has kept the economy afloat most of this year. But consumers went into hiding after the September 11 terrorist attacks, and although some signs show that shopping has picked up, that may be only because retailers are offering such steep discounts. ``Retailers are giving their profits away in order to move merchandise,'' says Yardeni. He points to a rising personal savings rate as the clearest indicator that consumers have finally been spooked into packing cash away for a rainy day. That's may be a good move for family finances, but it's not great for the economy. Corporate profits: The U.S. was already in corporate-profits recession, and the September 11 attacks have only made it worse. The pain has thus far been sharpest in the tech sector, where spending has all but dried up. But consumer cyclicals [auto makers, retailers, home-furnishing companies] may have the most pain yet to come. In an Oct. 8 note to clients, Prudential analyst Stacy Pak again warned that her outlook for holiday sales was worsening and said she may cut earnings estimates on the retailers she follows. Investors are going to get barraged with third-quarter earnings reports in the next week, and ``we'll see lot of bad news,'' says Chuck Hill, director of research at First Call. As profits fall, companies eager to cut costs will lay off more workers, which will dampen consumer confidence -- not an easy cycle to break. Hill believes the earliest corporate profits will turn up is the second half of next year. Valuations. Believe it or not, stocks are still quite expensive relative to earnings. The S&P 500 has a price to earnings ratio of 21 on 2002 earnings, but many stocks are trading at p-e's of 30, 40, or 50 times next year's earnings, says Ingraham. ``That kind of discrepancy when there is no earnings growth is not supportable,'' he warns. Yardeni believes this could limit any additional upside when the economy and corporate profits show signs of a rebound. Global ties. Now the three major world economies are all weakening, with Japan in far worse shape than the U.S. and Europe faring a bit better. ``We have to look over our shoulder to make sure these things don't get interlocked to the point where we see a downward spiral,'' says Hill. Yardeni says he's already worried about falling industrial commodity prices, including the above-mentioned drop in oil, which indicates that global economic activity is slowing. The bottom line is that the U.S. economy will eventually recover, but if it has to fight its way out of a global synchronized recession, it might take a while. Go to www.businessweek.com to see all of our latest stories.

To: LindyBill who wrote (169)	10/10/2001 1:00:45 AM
From: stockman_scott	Respond to of 248

Here's a good trading site that I just discovered... members.ozemail.com.au

To: LindyBill who wrote (169)	10/10/2001 10:41:39 AM
From: stockman_scott	Respond to of 248

Here's an interesting (but profitable) company to consider in 'the new environment' we live in... Strategic Diagnostics Reports Substantial Increases in Operating and Net Income for the Second Quarter USDA Certifies Use of Mycotoxin Test Kit NEWARK, Del., Jul 26, 2001 (BUSINESS WIRE) -- Goldman Sachs & Co. Retained as Financial Advisor Strategic Diagnostics Inc. (Nasdaq: SDIX chart, msgs) - a leading provider of antibody products and analytical test kits for the food safety and water quality markets, today reported financial results for the second quarter ended June 30, 2001. Revenue for the quarter increased 24% to $7.2 million from $5.8 million in the second quarter of 2000. Operating income increased 46%, to $775,000 from $532,000 in the prior year. Operating income included a one-time charge of $253,000, related to severance in connection with the recently announced planned consolidation of the Company's Strategic BioSolutions division, which is expected to result in anticipated savings of $750,000 to $1,000,000 a year. Excluding this one-time charge, operating income increased 93%, to $1.0 million from $0.5 million in the prior year. Net income was $515,000, or $0.03 per diluted share. Excluding the one-time restructuring charge and a one-time gain on the sale of assets in 2001 of $47,000, adjusted net income was $623,000, or $0.04 per diluted share, a 135% increase over the prior year's income of $265,000, or $0.02 per diluted share. For the six months ended June 30, 2001, revenues were $14.3 million, versus $11.6 million in the prior year, an increase of 23%. Operating income for the six-month period was $1.6 million ($1.9 million excluding the one-time charge) versus $0.9 million in the prior year. Net income for the first six months was $994,000, or $0.06 per diluted share, up 75% from the $569,000, or $0.03 per diluted share. Excluding the one-time restructuring charge above and one-time gains on asset sales in the 2000 period, adjusted net income was $1,102,000 or $0.06 per diluted share, an increase of 178% over the adjusted $397,000, or $0.02 per diluted share, in the prior year. Revenue growth continues to benefit from the increased demand for GMO (genetically modified organism) testing that has occurred since the recall of certain foods containing StarLink(TM) corn last fall. As the controversy surrounding StarLink and other genetically modified foods continues, the pressure on food suppliers to verify the presence of genetically modified traits is growing. As a result, an increasing number of production, distribution, and food companies are evaluating their procedures to include routine GMO testing. This trend is expected to continue to drive growth in the Company's food safety unit. SDI offers a comprehensive set of GMO test kits, with associated testing protocols and procedures, for a variety of crops, including soybeans, corn, and sugar beets. In a separate development, the Company announced that the USDA Grain Inspection, Packers and Stockyards Administration (GIPSA) has issued its certification of the MycoCheck(TM) test kit for the detection of deoxynivalenol (DON), also referred to as vomitoxin, a mycotoxin found in grain. This MycoCheck assay is the first test to be certified in the family of three SDI MycoCheck test kits for the detection of mycotoxins. The market for test kits for the detection of mycotoxins is estimated to be $20 million annually. SDI's family of tests offers meaningful competitive advantages. All the MycoCheck test kits are of a similar format that allows easy, visual, semi-quantitative analysis as well as instrument based quantitative analysis. All of SDI's mycotoxin assays are being evaluated by the USDA using a low cost plate-reading instrument. For the first time, this allows end users to be able to use a low-cost reader when following a USDA-certified method. The Company believes that these competitive advantages and the existing customer relationships established within the food safety market category position the Company to attract a meaningful market share of mycotoxin test kit sales. In further news, the Company today reported that it has retained Goldman Sachs & Co. as financial advisor in connection with exploring strategic alternatives available to the Company to maximize shareholder value. Richard C. Birkmeyer, President and CEO of Strategic Diagnostics, stated, "We are extremely pleased with our strong financial performance, especially in light of the weak economy. This performance demonstrates the growing acceptance of our GMO testing products. To continue this momentum, we are applying our successful GMO marketing strategy to other expanding lines of diagnostic tests in the food safety market. The GIPSA certification of our DON kit will allow us to aggressively gain market share in this important market. "We have applied this same strategy in our water quality testing product line. Rather than simply offer an individual test, we market a full testing solution. This strategy is driving the development of the water quality testing product line and our pending acquisition of AZUR Environmental. A hearing is being held with the California Department of Corporations (DOC) on July 30 for approval of the acquisition. The combined AZUR and SDI technologies enable us to offer a full solution to water companies, rather than the partial solutions that we previously offered separately. We are very excited about the potential for this product line. "Looking at the longer-term, we are also excited about our ongoing research and development with diagnostic devices to monitor drug levels within a patient's body. The potential benefits that derive from the ability to optimize drug dosages are compelling. We are pleased with the development of each of our market categories, Food Safety, Water Quality and Antibodies and we are proud of the market leading positions we have been able to establish, as recently evidenced by our inclusion in FSB: Fortune Small Business magazine's listing of "America's 100 Fastest-Growing Small Companies." With the assistance of Goldman Sachs, we are evaluating alternatives to accelerate the further development of these markets to their potential, enhance the leadership position our products have earned and thereby maximize shareholder value. This is an important step in the growth and development of Strategic Diagnostics and we believe these efforts will assist us in unlocking the value we see for our businesses." Mr. Birkmeyer reaffirmed the company's expectations of revenue growth of at least 20% and net income growth of 25% - 30% for the full year over last year's results. Conference Call A conference call to review second quarter results is scheduled for 11:00 a.m. EDT on July 26, 2001. The dial-in number for the live conference call will be 212-896-6098. A live webcast of the conference call will be available on the company's Web site, www.sdix.com, as well as www.vcall.com. For those who cannot listen to the live broadcast, an audio replay of the call will be available on these sites for 30 days. Telephone replays of the call will be available for 24 hours, from 1:00 p.m. EDT on July 26 until 1:00 p.m. EDT on July 27. To listen to the telephone replay, dial 800-633-8284 (858-812-6440 outside the U.S.) and enter reservation number 19324701. About Strategic Diagnostics Inc. SDI is a leading provider of biotechnology-based diagnostic tests for a broad range of agricultural, industrial, and water treatment applications. Through its antibody business, Strategic BioSolutions, Strategic Diagnostics also provides antibody and immunoreagent research and development services. SDI's test kits are produced in a variety of formats suitable for field and laboratory use, offering advantages of accuracy, cost-effectiveness, portability, and rapid response. Trait Check(TM), GMO QuickCheck(TM), and GMO Check(TM) are pending trademarks for SDI.

To: LindyBill who wrote (169)	10/10/2001 1:13:42 PM
From: stockman_scott	Respond to of 248

Detection, Vaccine Firms See Benefit Wednesday October 10, 1:03 pm Eastern Time By Jed Seltzer and Edward Tobin NEW YORK (Reuters) - Shares of companies that could be enlisted to detect biological attacks and treat its victims soared in Wednesday trading, as U.S. fears of a biochemical attack were fueled by recent anthrax cases in Florida. Several of the firms have already received contracts to produce vaccines and diagnostic devices, such as Nanogen Inc. (NasdaqNM:NGEN - news) and AVANT Immunotherapeutics Inc. (NasdaqNM:AVAN - news), which announced government-related pacts on Wednesday. Shares of detection system maker Nanogen rose 60 percent, or $3.36, to $8.94, while shares of vaccine developer AVANT rose 67 percent, or $1.99, to $4.94 on Nasdaq. Nanogen said it received a $1.5 million grant from the U.S. Army to continue development of its biological warfare detection systems, while AVANT said it had signed a contract with a firm licensed by the U.S. Department of Defense to create vaccines against infectious diseases. AVANT's stock reached $6.93 earlier in the session. ``The wild card is that if fears continue to grow about how likely an attack of this nature is, you may get to the point where the government decides to throw a bunch of money at this and that is where people are speculating,'' said Dougherty & Co. analyst Aaron Lindberg. Detection systems maker American Access Technologies (NasdaqSC:AATK - news) said on Tuesday it received a government order to make 7,000 alarms that detect chemical warfare agents. The company's shares have more than tripled in the past three days and earlier Wednesday were up 10 cents, or 2.55 percent, to $4.02 in trading. Other small firms have not announced new contracts but their stocks have still ascended on the hopes that they will see increased revenues from initiatives to improve the nation's ability to cope with biochemical attacks. Shares of Cepheid Inc. (NasdaqNM:CPHD - news) soared to $10.50 in Wednesday trading from a close of $3.37 on Friday. The stock rose 86 percent on Tuesday and another 27 percent in trading Wednesday. Cepheid develops genetic profiling and detection systems for contaminants and biological agents. The Sunnyvale, California-based company makes Smart Cycler, a DNA detection system that searches for the presence of targeted substances, such as anthrax. ``The valuations here are getting stressed at these levels,'' Lindberg said. ``If you look at a firm like Cepheid, it is looking at a $230 million market cap with $8 million in revenues this year. That being said, they have got a leading technology, and this is obviously an area of keen interest now.'' SIGA Technologies Inc. (NasdaqSC:SIGA - news), which is developing anti-infective treatments, has seen its stock rise more than 80 percent in the past two weeks, to $4.16 from a close of $2.29 on Sept. 26. And biotechnology companies outside the United States are also benefiting from speculation that increased terror attacks will spell contracts to provide diagnostics and drugs. Shares in Danish biotechnology firm Bavarian Nordic , which makes smallpox vaccine, and British group Biotrace International Plc (quote from Yahoo! UK & Ireland: BOI.L), which supplies testing kits, have both surged since the Sept. 11 attacks. Acambis Plc (quote from Yahoo! UK & Ireland: ACM.L), another UK firm, has seen its stock leap nearly 80 percent on speculation the U.S. government will bring forward orders for smallpox vaccine under an existing contract.

To: LindyBill who wrote (169)	10/11/2001 9:14:24 AM
From: stockman_scott	Respond to of 248

08:36 ET Brocade Comms (BRCD) 19.02: Surges 8.4% in pre-market. Hearing from traders that move sparked by Bloomberg article in which company CEO indicated that he expects BRCD to meet Q4 sales numbers. CEO did not discuss earnings outlook. 08:30 ET Economic Data : Jobless claims fell 67K to 468K in the Oct 6 week vs the consensus of 510K; the sharp reversal in claims after the huge jump last week will be somewhat positive for the market, as it might allay concerns that last week was the beginning of a much more bleak trend in claims.

To: LindyBill who wrote (169)	10/11/2001 11:51:14 AM
From: stockman_scott	Read Replies (1) \| Respond to of 248

DJ Investors' Intelligence Poll: Bullish Sentiment Up 10/11/2001 Dow Jones News Services (Copyright © 2001 Dow Jones & Company, Inc.) NEW YORK (Dow Jones)--The most recent Investors' Intelligence poll showed an increase in bullish sentiment among investors. The percentage of financial advisers who are bullish on the market increased to 39.2% from 34.4%, while bearish sentiment fell to 34% from 42.7%. The percentage of financial advisers expecting a market correction increased to 26.8% from 22.9%. In the week ended Tuesday, 21.15% of stocks listed on the New York Stock Exchange were above their 10-week moving averages, compared with the previous week's 20.78%. Also, 28.85% of NYSE stocks were above their 30-week averages, up from the previous week's 28.78%.