Economy Cold As Ice
A weaker-than-expected fourth quarter GDP all but guarantees that the Fed
will cut interest rates by the expected 50 basis points Wednesday when it
announces its action at 2:15 PM ET. Stocks are looking at a mixed open ahead of
the Fed news.
GDP for the fourth quarter trailed off to just 1.4%, which is significantly
lower than the 2.1% analysts had expected and is also the slowest rate since the
second quarter of 1995.
The Dow futures are down 11 points, and the Nasdaq futures are up 6 points.
The S&Ps look to open down 1.8 points while the yield on the 10-year
Treasury has edged down to 5.18%.
Wednesday Movers
Optical networking component maker New Focus
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PowerRating) earned 4 cents per
share for the quarter ending Dec. 31, and that soundly topped First Call/Thomson
estimates of a 3 cent per share loss. NUFO closed Tuesday at 49 15/16 and is
currently trading up to 57 1/2 in pre-market activity.
In the semiconductors, Applied Materials
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PowerRating) warned
that its upcoming quarter would likely be worse than previously expected. The
chip-maker closed Tuesday at 52 7/16 and is trading down to 51 1/2 in pre-market
activity.
Software maker Adobe Systems
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PowerRating) also warned that the slowing economy
will likely hurt its first-quarter earnings, and that is hurting the stock in
early trade. Adobe closed at 52 11/16 and is currently trading down to 47 in
pre-market activity.
Amazon
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PowerRating) posted a fourth quarter loss of 25 cents per share which
was slightly narrower than the 26 cent loss analysts expected. The online
retailer claimed it would be profitable by the end of 2001. Amazon closed
Tuesday at 18 15/16 and is trading up to 19 in pre-market activity.