Jobless Claims Up, Stocks To Ease

  • May 3, 2001
  • Dan Delaney

Stocks appeared set to ease Thursday
after the government reported weekly jobless claims rose faster than expected.

This runs contrary to the hopes of a
quick economic recovery, but it’s just one report. The new data also may keep pressure on the central bank to
continue its easing campaign. Keep an eye today on how the Fed Funds futures
contract responds to the news.

The OECD forecast that the U.S. economy will grow 1.7% in 2001 and 3.1% in 2002, aided by easier monetary policy and likely federal tax cuts.

Overnight, the U.S. Justice Department
approved General Electric’s
(
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International
(
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helicopter engine unit and let a new company service some of Honeywell’s jet
engines.

For those of you intermediate-term
term momentum traders out there, Manor Care
(
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PowerRating) said before the open that
Q1 earnings rose to 24 cents a share vs. year-earlier earnings of 20 cents before charges
and a penny above First Call’s consensus estimate. Shares in the nursing home
operator may be setting up. Using Loren Fleckenstein’s standard chart, note the
correction-recovery base, prior uptrend and rising relative strength line. From
here, the stock needs to digest recent gains and consolidate on low volume and price
volatility before setting up a proper breakout. (Loren’s Intermediate-Term Trader
commentary appears on the home page at 5 p.m. ET each market day.)


Revlon
(
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Thursday morning reported a less-than-expected loss in the first quarter. 

The maker of cosmetics and other
personal-care products said its Q1 operating loss 47 cents a share vs. a loss of
46 cents a year ago and analyst expectations of a loss of 69 cents. The company
is restructuring but still needs to bring in top-line growth. For more
information on turnaround stocks, see Loren’s intermediate-term momentum
perspective on playing turnarounds, Selecting
And Trading Turnaround Stocks.

ICN Pharmaceuticals
(
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PowerRating) posted
first-quarter earnings of 26 cents a share vs. 34 cents a share a year ago and a
penny above estimates.