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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Nancy who wrote (15807)	12/20/1997 12:33:00 PM
From: Robert Graham	Respond to of 50167

Here is a Briefing end of day summary on Friday's market: It was a tale of two markets today with bears controlling the morning session and bulls taking over in the afternoon... That observation is highlighted by the fact that the Dow was down 270 points by 11:15 ET, and down just 90 points by the close... Triggering the selloff were the significant declines in Asian markets, Nike's earnings shortfall, the expiration of individual and index options and index futures, and persistent concerns surrounding earnings prospects... While an early decline was expected, the extent and scope of the losses was not... As equally surprising was the market's recovery effort, particularly the one that took place in the technology sector... Chip and chip equipment makers helped lead the comeback, and although the tech-laden Nasdaq finished with just a slight gain, it belies the fact that the average was down as much as 30 points earlier in the day... No doubt that market bulls will be encouraged by today's activity, yet Briefing doesn't find much reason to be as optimistic... Sure, our economy is strong, but Nike, Oracle, and 3M have done a good job of bringing to light that slower sales, not just in Asia, but in the U.S. will negatively affect earnings... While the market moved higher on Monday and Tuesday in the absence of any shocking news from Asia, we warned that it was unwise to grow complacent, and that the Asian situation was hardly stabilizing... We still feel the same, and caution that further downside risk is expected as the evidence is mounting that the rosy earnings outlook is growing a bit murkier... PC sales are slowing in Asia, tech industry leaders are ailing, market leadership is lacking, and big name companies are warning... As such, any rally resulting from the January effect is expected to be short-lived. Bob Graham