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

To: Lynn who wrote (55460)	4/2/1999 3:23:00 PM
From: hlpinout	Read Replies (1) \| Respond to of 97611

Hi Lynn, Did they already? If already perceived that they have, then it should have been factored in the price. Goldilocks Meets The Titanic 02:01 p.m Apr 02, 1999 Eastern By Richard Melville NEW YORK (Reuters) - Wall Street has greeted the start of springtime with a burst of new growth, highlighted by a successful scaling of the 10,000-point mountain by the Dow Jones industrial average. But even with the ideal growing conditions -- strong U.S. economic growth, no inflation and a relative dearth of disappointing earnings news -- many market watchers are unconvinced the landscape is clear of bear prints. Seasonal factors are partly at work. The coming week is the last before the first-quarter earnings reporting season -- one of Wall Street's most harrowing because it is the last chance for many companies to forewarn investors of disappointments. ''The biggest news on the earnings front this week could well come from pre-announcements,'' said Charles Hill, director of research at First Call. ''This should be one of the peak weeks for the quarter.'' This quarter that may be a misleading measure, though. By First Call's figures, corporate warnings are running well below the last three quarters, perhaps signaling an end to a down trend in earnings growth that hit bottom in the third quarter of 1998 when profits fell for the first time in seven years. There have been high-profile exceptions to the overall positive tone. Coca-Cola Co., for example, startled Wall Street by announcing it expected a decline in volume sales for the quarter. Technology may hold the key for several reasons this week. Wall Street is depending the sector to produce by far the strongest growth even though it is also an area that has produced a large share of the warnings. Dell Computer Corp. will host a meeting with analysts this week, one that will get unusual attention given that several analysts have already ratcheted back growth expectations for the personal computer giant in the wake of a profit warning from competitor Compaq Computer Corp. . While earnings news assumes its periodic perch on the market's pedestal, investors can take comfort that the economy and the Federal Reserve continued to cooperate last week. The Fed's interest rate policy committee left rates unchanged at its meeting last week and a critical employment report Friday appeared to validate the decision, confirming the so-called Goldilocks economy -- a delicate not-too-hot, not-too-cold balance of growth without inflation -- is intact. The report showed unemployment dropped to 4.2 percent in March, a 29-year low, but job growth was tamer than expected and wages gave no hint of an inflation acceleration. The news drove bonds higher in a Good Friday holiday-shortened session. ''Basically, the numbers were comforting with nothing that hinted at inflation,'' said Peter Cardillo, director of research at Westfalia Investments. ''That helped interest rate fears dissipate.'' Some analysts say the fact that investors seem increasingly unwilling to buy anything but a narrow handful of stocks offers the clearest source of worry. That shift in sentiment recently triggered one of the most colorfully named of Wall Street harbingers -- the Titanic indicator. The indicator, as tracked by Florida-based market analysis firm Ned Davis Research, flashes a warning whenever the market reaches a new high -- as happened during the Dow's advance to 10,000 -- and the number of stocks hitting new lows on the New York Stock Exchange exceeds new highs by more than 100. Over the last few decades, the Titanic indicator coincided with or led bear markets in 1973 and 1990 and preceded the 1987 and 1998 market downturns. However, its performance was somewhat erratic, with lead times ranging up to eight months in the case of the 1990 bear market. For those inclined to eye bearishly the relative weakness of the broad market, the indicator sounded an alarm. ''It obviously does lead the market and while it's not telling you the market is headed straight down, it does tell you that the market has entered a dangerous zone,'' said Michael Murphy, money manager and editor of several newsletters. Murphy cited the indicator in a recent issue of ''Overpriced Stock Service,'' a publication aimed at short-sellers, investors who seek to profit from falling markets. Cautious on the broad market, Murphy, who also edits ''California Technology Stock Letter'' is actually upbeat on tech stocks. ''We basically follow earnings,'' Murphy said, adding he saw earnings growth in technology remaining comparatively robust while, ''earnings in the old economy -- as shown by Coke -- are going to be weaker than expected.'' The Dow industrials ended last week at 9,832.51, backtracking a bit after chalking up its first finish above the 10,000 level on March 29. hio