Warning: More Earnings Warnings Expected Warns Analyst

After two days of tech stock rally the bulls pulled back as all eyes turned to the U.S. Supreme Court. Earnings warnings from market leaders continue to barrage investor confidence. Old economy stocks rallied as investors priced in expectations for interest rate cuts by the Federal Reserve. Appleis stock ended higher.

It is a day for the history books — GM decides to phase out the Oldsmobile brand and the deadline for the certification of electors in the U.S. Presidential election arrives. Plans to liquidate the oldest U.S. brand name in the automotive business comes with a warning that GM will miss earnings.

Observers say, once the election is decided, Wall Streetis focus will return to predicting the economyis direction and anticipating the Federal Reserveis next move at their December 19 meeting.

Appleis stock climbed 3/16 or 1.23% to 15 3/8 on volume of 6.8 million shares.

Click here if you have (or would like to have) a sense of humor about your much depreciated Apple investment.

Apple swept the MacUser Awards taking four prizes, including the coveted "Innovation of the Year" award, scooped by the G4 Cube. Not surprisingly, the other PC manufacturers didnit even rank an honorable mention.

In slightly more serious news, Analysts are warning there could be more warnings in early 2001 from the computer hardware industry. "We remain cautious as macro demand can get worse and the bottom is still in front of us,ii warned Lehman Brothers analyst Daniel Niles.

The Nasdaq gave back 83 points (-2.76%) to close at 2931 on volume of 1.8 billion shares.

John Bollinger, of EquityTrader.com, told CNBC the bear market in late March through April predicted the current macroeconomic slowdown. Assuming that the stock market is a leading indicator of the economyis direction, Mr. Bollinger points out that if stocks donit rally once Presidential election comes to a conclusion, the markets will be forecasting a recession in 2001.

Other analysts believe the Nasdaq hasnit really experienced "capitulation" by weaker investors and at least one more test of the 2500 level is necessary, even if a rally ensues upon conclusion to the presidential election.

The Dow climbed 42 points (0.40%) to close at 10768 on volume of 1.07 billion shares.

Fed fund futures are pricing in a 90% chance of an interest rate reduction of 1/4 point at the next FOMC meeting in late January and a 70% chance of another 1/4 point interest rate cut at the March Fed meeting.

The S&P 500 lost 9.03 points (-0.65%) to close at 1371.17.

In Apple related businesses: Akamai gained 13/16 to 39 7/16. Adobe announces Q4 earnings on Thursday, the stock sagged 3 7/16 to 70 11/16.

Lou Gerstner told Reuters, "From my perspective, itis a little too early to predict that what weire seeing is in fact a slowdown in any (national) economy. Having said that, if in fact it (an economic slowdown) does happen, I think what youill see is a reallocation of technology spending dollars, not a diminution." IBM lost 1 1/8 to 93 7/8.

Beaten down PC stocks rallied against the trend. Dell gained 1 41/64 to 21 45/64. Hewlett Packard leapt 2 1/8 to 35 1/4.

Compaq climbed 0.53 to 20.77. In after hours trading Compaq warned earnings and revenue will miss Q4 earnings.

AMD warned that Q4 sales and earnings would miss forecasts, but the sell-off in the semiconductor sector may have exhausted itself, AMDis stock hardly suffered from the news, closing down 1/16 to 17 1/4. Intel lost 15/16 to 36 1/2.

Microsoft likes Napsteris model for centralized peer-to-peer networking and plans to co-op similar file sharing capacities for the Windows OS. "Ballmer even wants to unseat the MP3 music file format -- he stated repeatedly during his talk that the latest iterations of Microsoftis Windows Media audio format compress music much more tightly than MP3.," warned an upside.com article. Microsoftis stock climbed 5/16 to 58 3/8.

In economic news: National Association of Purchasing Management said manufacturing revenue is likely grow 4.4% next year, slightly higher than the 4% expansion in 2000.

However, manufacturing capacity utilization has fallen to 82.3% from 87.4% six months ago, the steepest decline since 1985. Lower capacity utilization indicates slowing demand and a lessening of inflationary pressures.

The Wall Street Journal said, "Both manufacturing and nonmanufacturing businesses expect the second half of 2001 to be stronger than the first half, with just under 50% of the survey all respondents predicting better business later in the year."

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Appleis stock activity, visit our updated Apple Stock Watch Special Report.

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