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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: CGarcia who wrote (34502)	10/11/1998 4:08:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Sunday October 11, 3:23 pm Eastern Time WALL ST WEEK AHEAD - Earnings and Fed in focus By Huw Jones NEW YORK, Oct 11 (Reuters) - Wall Street's shell-shocked investors are bracing this week for the kick-off to the third quarter earnings season, set to be the worst in seven years. But hopes are high for another interest rate cut before the Federal Reserve's policy-makers meet in November, and some pleasant earnings surprises should turn up. Still, nerves are far from being soothed. ''The market is walking on eggs and very susceptible to any news from overseas that suggest there will be any impact on earnings in 1999,'' said Thom Brown, managing director of Rutherford Brown and Catherwood. ''This market has gotten itself into a very oversold condition, and if we don't get any bad news from overseas, we can see it rally, but I think we are definitely in a bear market right now,'' he said. The Dow Jones industrial average rose 167.61 points Friday, or 2.2 percent, to 7,899.52. For the week, it rose 114.83 points, but is still off marginally for the year. The government bond market will be closed on Monday in observance of the Columbus Day holiday, but stocks will trade normally. Investors have been dogged by bad news about profits amid a belief that global policy-makers are still dragging their feet in the face of the world's financial crisis. ''We have to anticipate the same type of stuff, and the focus is going to be on the Fed and earnings reports,'' said Charlie Payne, head analyst at Wall Street Strategies. Several European countries, including Britain and Spain, cut rates after the Fed lowered a key short-term rate a quarter point last month in a bid to insulate the U.S. economy from the turmoil overseas. These modest cuts, however, failed to shore up shaky sentiment. Barring bad news from abroad or a surprise Fed cut, the focus will be on the first big batch of earnings reports. Basic materials such as metals and paper, energy companies, capital goods makers, and big brokers and banks, hit by reeling world markets, are expected to be among the worst performers. Regional banks, consumer products makers, pharmaceuticals, and retailers should come out tops, with technology stocks showing some improvement. First Call, which tracks earnings, expects profits of companies in the Standard & Poor's 500 stock index to fall 1 percent in the quarter, making it the worst period since the third quarter of 1991. Investors will sift through the reports for clues about the impact of the global turmoil on future quarters. ''In these kind of times, investors will be hanging on every kind of innuendo about the next few quarters,'' said Chuck Hill, First Call's director of research. Intel Corp. on Tuesday, and Compaq Computer Corp. and Apple Computer Inc. on Wednesday should give a taste of what's in store for techs. The Big Three automakers also report this week and have hinted that results will be better than analysts expect. Other well-known names reporting include soda rivals PepsiCo and Coca-Cola Co., and Gillette. Good earnings from General Electric Co. and Internet service provider Yahoo! Inc. last week failed to spark much enthusiasm. Key economic data will include September's retail sales on Wednesday when Wall Street will look for signs of any slowdown in consumer spending, which fuels two-thirds of the economy. Consumers have been the main force behind the seven-year-old expansion. September's Producer Price Index on Thursday and Consumer Price Index and real earnings on Friday will give more snapshots of the economy's health. (Nasdaq:INTC - news) (NYSE:CPQ - news) (Nasdaq:AAPL - news) (NYSE:PEP - news) (NYSE:KO - news) (NYSE:G - news) (NYSE:GE - news) (Nasdaq:YHOO - news) (Wall Street Desk, 212-859-1737)

To: CGarcia who wrote (34502)	10/11/1998 6:07:00 PM
From: .com	Read Replies (1) \| Respond to of 97611

"once everyone's upgraded their machines for the Y2k scare...sales should drop off immediately." If a majority of the sales were in the mainframe or large server arena, maybe. But, CPQ's bread and butter is the PC market. I doubt many PC owners are upgrading due to the Y2K issue. I doubt many PC owners are even impacted. What is the typical shelf life of a PC before most people upgrade it (more speed, run newer software, etc...)? As the tehnology improves people will continue to upgrade to new boxes on a regular basis.