All Things Considered…

  • October 16, 2001
  • Marc Dupee

All things considered, the market is holding up well to a flurry of anthrax reports, mixed corporate earnings, and disappointing economic news. 

The Dow is up 6 at 9354, the Nasdaq is up 14.26 at 1710.57, and the S&P 500 is up 3.98 at 1093.96. New reports of possible anthrax contamination at ABC, at the London Stock Exchange, and at a newspaper in Melbourne, Australia, are potential negatives as they enhance uncertainty, a sentiment the market abhors. Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating), the world’s biggest producer of tractors and earthmovers, said earnings and production will fall
short of its forecast. The Dow component is down 2.6%. 

Highlighting CAT’s production slowdown, the Federal Reserve reported industrial production eased for the
twelfth straight month, the longest stretch since the second World War. Production fell by 1% last month and factories scaled back to just three-quarters of their potential. 

Signs of a contracting economy continue to spring up on a daily basis. Bethlehem Steel
(
BS |
Quote |
Chart |
News |
PowerRating), the nation’s fifth-largest
steel producer, filed for bankruptcy protection yesterday amid sagging steel demand. Maytag’s new CEO retrenched workers performing redundant tasks and Dow heavyweight United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating) said it would cut 5000 jobs. 

But the market is beginning to reward firms that are taking cost-cutting measures to improve their bottom lines. UTX said Q3 profits increased 14%, and shareholders are being rewarded with a 3% gain. 

In the sectors, oil services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) are jumping ahead and have claimed the leading spot on the session’s strongest sector list, up 4.07%. Networkers
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), +2.48%, banks
(
$BKX.X |
Quote |
Chart |
News |
PowerRating), +1.70%, and Internets
(
$GIN.X |
Quote |
Chart |
News |
PowerRating), +1.67% are also leading. The North American telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating) is the only sector down by more than 1%, as the market continues to recover from the 9/11 tragedy, gain traction, and respond to recent momentum.