Market Takes It In Stride
The market is taking an earnings warning from Microsoft
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PowerRating) in stride, selling off less vigorously than declines in one of the most influential stocks might otherwise merit.
Microsoft is down 5% compared to tamer declines in major market measures. The Nasdaq Composite is down 1.16% at 2022.84, the Dow is off .51% at 10555, and the S&P 500 is down .58% at 1210.65.
More than 800 corporations had warned about lower profits prior to this week’s heavy slate of earnings releases and many investors have already priced in negative results.
Microsoft, which gets about two-thirds of its revenues from software loaded on personal computers, said profits and revenues would probably lag analysts’ estimates due to flagging demand for PCs.
Underscoring Microsoft’s claim, Gateway
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PowerRating), the second largest direct seller of PCs, lowered its profit estimates for 2001, citing stagnant demand and price competition.
But much of the lower net income figures accompanying Microsoft’s warning were from investment losses in its stock portfolio. Microsoft said it wrote down $3.92 billion and took an investment loss of $2.62 billion. Microsoft may still have not located TradingMarkets.com. Excluding the stock’s losses, net income results were in line with the quarter from one year ago.
Professional Detailing
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PowerRating) has seen volatile trading as it plunged from 69 to 53.07, only to recoup most of the losses in an example of unsustainable downside momentum.
Scientific America
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PowerRating) saw volatile trading action, dropping 40% overnight, despite beating earnings views by one cent. The stock is mostly suffering from downgrades. EBay
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PowerRating) is up 4% at 66.99 after saying its third quarter profit tripled. Ebay is trading near its year-to-date highs but “tails” left at the recent swing highs on daily price charts suggest the online auctioneer could test the July lows.