CNBC Sentiment indicator. See how the "Market Dispatch" grabs you... I've put in italics what I call "messages of extreme sentiment" and comments in [].
AMD strikes blow to sad market
The microprocessor maker leads a long list of earnings warnings today, further darkening the mood. The S&P falls past its post-Sept. 11 lows. Well, at least the market's closed tomorrow.
No, that's not the rockets' red glare. The market is falling sharply again today, with the Nasdaq off about 1% at midday and the Dow down more than 50 points, well below the 9,000 level.
Perhaps more significantly, the S&P 500 has fallen below 944, its intraday low of Sept. 21 and what market watchers had pegged as a key support level. "That's taken as a sign of continued weakness," CNBC's Mary Costello says.
The cause for today's calamity? Name your poison. [Wouldn't you rather be doing shots of tequila right now?]
Microprocessor maker Advanced Micro Devices (AMD, news, msgs) issued an earnings warning overnight -- for the second time in two weeks. It now sees sales some 40% below year-ago levels and slightly off the projections made, uh, two weeks back. Shares are off 8% today. The fix is in.
Used to be that profit warnings were oddly cathartic. They’d bring a little panic selling, then a sunny sense that the worst news is out of the way. Thanks, AMD, for nixing that tonic. Maybe you could revise again next week?
It's not all AMD’s fault. Among the other profit warnings issued overnight: Overland Data (OVRL, news, msgs), Knight Trading (NITE, news, msgs), Aspen Technology (AZPN, news, msgs) and Bell Microproducts (BELM, news, msgs). All are down, with Aspen shaking off more than 40%. (Insert your own falling-off-the-mountain joke here.)
Try another topic: accounting. Seems debt and bookkeeping concerns are dogging any number of market names. Drug maker Elan (ELN, news, msgs), dogged by just such questions, is off another 7% this morning after a debt downgrade. Its stock is down more than 90% this year.
It is not alone. Shoot, even President Bush is now facing questions about long-settled SEC investigations of his long-disbanded oil business. [WTF is this doing in a market report!!!!]
Little is up in the market today. Among the major market indexes, not even gold stocks show a gain at midday.
At least volume is low, in contrast to heavy days Monday and Tuesday, when stocks took a beating as the market digested the collapse of WorldCom (WCOME, news, msgs), the shakeup at Vivendi (V, news, msgs) and Tyco's (TYC, news, msgs) disappointing spinoff of CIT (CIT, news, msgs).
After all, the market is closed tomorrow for the Fourth, and opens Friday for what should be a light day of trading. Think about it: if you didn't have to go to work on Wall Street today, would you? [ie Don't you go to work on investing in stocks either.]
...Tweeter got creative, attributing the shortfall to the decline in the stock market. You just don’t get that I-need-a-stereo feeling when the market hits five-year lows ... like you do when the market sits at four-year lows. [Creates a strong aversion to even thinking about the market]
Yesterday, a profit warning you may have missed came from cosmetics maker Estee Lauder (EL, news, msgs), which lowered forecasts for the just-ended quarter and for the year. The company is spending more on advertising and promotions. Maybe they should cite the market, too; after all, what good is looking good if your portfolio is wrinkling? [egg on your old, disgusting face]
Also yesterday, shares of satellite builder Loral Space & Communications (LOR, news, msgs) crashed to a seven-year low. The stock lost 40% after slashing earnings and revenue estimate and said it would not achieve profitability in late 2003, as it had promised.
The company's chief told analysts there was no concern about bankruptcy or delisting, though the stock is trading well below the NYSE's $1 minimum. Shares once traded at $32 -- they now go for about 66 cents. [Creates distrust]
Earnings warnings and rumors of warnings have kept tech stocks in particular and the market in general on edge this week. With the second quarter just finished and earnings season due in just a couple of weeks, there's little sign that profits will show a substantial recovery. [baseless negative speculation]
One key problem has been that while consumers are still writing checks, businesses aren't spending. Not on computers. And, it seems, not on much else.
We've hit 1997; can we reach 1996?
With the Nasdaq and S&P now trading at five-year lows, we find ourselves asking: where do we go from here? Do we start looking for 10-year lows?
Not quite yet. In July of 1992, the Nasdaq was trading below 600, which still looks a ways away. The S&P 500 was at 424 -- less than half of today's level.
Hitting 1992 would take a crash of substantial proportion. Still, the charts are interesting.
In 1996, the Nasdaq traded as low as 1,000, but also crossed 1,100 and 1,200 for the first time. In 1997, it hit the 1,300s for the first time, then the 1,400s and then the 1,500s. The tech bubble started building in earnest the next year, and the rest you probably know.
We're now back to where we were before the bubble.
The S&P 500 hasn't been nearly as volatile as the Nasdaq. Its 10-year chart shows a fairly smooth progression upward to the crash of 2000, then a fairly even move down.
In 1996, the index first crossed 600 and 700. In 1997, it climbed past 800 and then 900.
We're now at 1997 levels, and 1996 levels don't seem out of the question. Beyond that, though, still looks improbable. After the past couple of years, we'd never say impossible.
Waiting for the double dip
Real football fans celebrate the little victories. Even in a losing effort, their team’s bright spots provide optimism toward the second half, the next game, the next season.
Looks like the last diehard stock-market fan has left the stadium. No one celebrated this morning’s little victory: the lowest number of jobless-benefits filings in nearly 15 months.
“What’s the market reaction? You really have to have a good microscope to find one,” CNBC’s Rick Santelli said from his post at Chicago’s futures pits.
moneycentral.msn.com
.......................
The article is morose, discouraging, and offers no hope for better times, even though by all acounts, the economy has passed its nadir.
Now compare that article to those a few weeks after the market hit its post Sept peak.
moneycentral.msn.com
moneycentral.msn.com
moneycentral.msn.com
It's not that there's a conspiracy going on, it's just that CNBC is giving folks what they are willing to hear and consume. At market tops, they give people optimism and upside targets, because nobody would tune in if they gave caution and negativity. At bottoms, the process is reversed. Better stated, the process is eventually reversed, reflecting the formation of a new bottom. |
