Weak Open
Stocks appeared set for a weak open
Thursday following more corporate warnings indicating a struggling economy.
The Government reported that inflation
at the wholesale level was tame in May. The Labor Department said that its
Producer Price Index rose 0.1% in May after a 0.3% rise in April.
Before the open, H.J. Heinz
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said its core profits dropped 18% in the fiscal Q4 and warned that earnings in
the current quarter would fall short of expectations. The food products giant
posted fourth-quarter earnings, before unusual items, 53 cents vs. 63 cents a
year ago and in line with expectations, according to Thomson Financial/First
call.
Silicon Storage Technology
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PowerRating),
which makes memory products for computers, said on Wednesday its Q2 earnings
will fall below of Wall Street expectations. The company cited excess inventory
and a slowdown in new orders. The company said it expects Q2 earnings between
breakeven and 3 cents a share. That compares with analyst estimates averaging 6
cents, according to Thomson Financial/First Call.
Electronic component maker CTS
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said it expects to report a Q2 pro forma loss of 5 cents to 10 cents per share
vs. estimates averaging a profit of 8 cents per share.
Lucent Technologies’s
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PowerRating) plan to
sell two manufacturing plants has fallen through, the Wall Street Journal
reported Thursday. The newspaper said Lucent was expected to raise $600 million
to $900 million for the plants through a deal with Flextronics International
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PowerRating).
Remember that all stocks are
speculative. On any new trade, be sure to limit your position size and set a
protective price stop where you will sell your buy or cover your short to
protect yourself against severe losses. For an introduction to combining price
stops with position sizing, see my lesson, Risky
Business.