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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: E.J. Neitz Jr who wrote (40752)	6/18/2002 3:04:58 PM
From: Kelvin Taylor	Read Replies (2) \| Respond to of 53068

NEW YORK (Reuters) - Stocks were flat to lower in early afternoon on Tuesday as Wall Street weighed upbeat data showing tame inflation and a red-hot housing sector against worrisome profit forecasts from companies including Best Buy Co. Inc. , the top U.S. consumer electronics retailer. Monday's strong gains also had some investors selling to lock in short-term profits. "It's one step forward, one half-step backward," said Gil Knight, fund manager at Allied Investment Advisors, which oversees $11 billion. "There's not enough direction to get investors excited about something." U.S. housing starts jumped 11.6 percent in May, the biggest percentage gain in almost seven years, while U.S. consumer prices were unchanged in May, showing there is no worry of inflation and giving the Federal Reserve ample time to delay interest rates hikes and allow the economy to gain strength. "We have the terrorist attack (in Jerusalem) and the economic numbers were sort of a non-event, even though the housing numbers were very, very strong," said Michael Farr, president of Farr Miller & Washington, a fund that manages about $375 million. Best Buy's cautious outlook left its mark on the market, as did the tepid earnings of Wall Street house Lehman Brothers and negative comments on computing giant International Business Machines by investment bank Morgan Stanley. Best Buy lost $3.56 to $38.70. The top consumer electronics retailer posted earnings that beat expectations but warned that earnings in the coming quarter would miss estimates. IBM weighed on the Dow, falling $1.14 to $76.00, or 1.48 percent. Morgan Stanley lowered its 2002 and 2003 earnings estimates for International Business Machines Corp. because of continued weak spending on hardware. Still, some say recent steep declines have left some stocks cheap, which could soon bring in buyers and set the stage for further gains, near term. "Broadly, I feel like we are in a rally phase within a bear market. The market has higher to go in here and continues to be oversold. I expect strength but no breakout," said Farr.