What Does Greenspan Have In Store?
The market action Friday was pretty
much a roller coaster ride as traders were bombarded by more earnings warnings
and analysts’ downgrades.
The Dow Jones Industrial came out of
the blocks lower and remained lower as Merck
(
MRK |
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PowerRating) announced before the bell
that earnings for Q2 will not meet analysts’ expectations. The Dow Jones
Industrial lost 1.0%. The Nasdaq Composite attempted to rally early on in the
trading session only to drift lower throughout the day. The Nasdaq Composite
shed 1.1%.
The question most traders are asking
is what will Greenspan and his crew do when they meet next week.Â
Individual stocks in the gain column
were Prepaid Legal Services Inc.
(
PPD |
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PowerRating) which rose 14.2% after William Blair
initiated coverage on the stock as a Strong Buy.
Kon Philips
(
PHG |
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PowerRating) gained
6.9%.Â
American Healthways
(
AMHC |
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PowerRating), which
provides assistance to managed-care providers on how to control cost, rose 11.6%.
The company reported Q3 earnings on Thursday at 12 cents per share which was
above analysts’ expectations of 10 cents per share according to Thomson
Financial/First Call.
Leading the way in the
Telecom-Equipment sector was Comverse Technologies
(
CMVT |
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PowerRating) after Pacific
Crest initiated coverage on the stock. The company ended higher for the day by
7.4%
Also gaining today was Owens &
Minor Inc.
(
OMI |
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PowerRating) which tacked on 8.2% and Optimal Robotics Corp.
(
OPMR |
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PowerRating)
which rose 5.1%
Not many sectors showed strength today
in the plus column, except perhaps the Gold and Silver Index
(
$XAU.X |
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PowerRating) which notched
fractionally higher by 0.4%, as did the Semiconductor Index
(
$SOX.X |
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PowerRating)
which also gained 0.4%.
Also moving higher was the Oil Index
(
$XOI.X |
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PowerRating) which gained 1.0% after the State Department reported troops
which are stationed in the Middle East should go to High Alert.
Sectors dropping lower Friday were the
S&P Healthcare Index
(
$HCX.X |
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PowerRating) which lost 3.5%
The Pharmaceuticals Index
(
$DRG.X |
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PowerRating)
which lost 3.5% after Merck
(
MRK |
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PowerRating) announced that it would not meet
expectations.
Also pulling back today was the
Biotechnology Index
(
$BTK.X |
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PowerRating), which after two consecutive up-days lost
2.9%.
A stock on the losing end of trading
was Kenneth Cole Productions Inc.
(
KCP |
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PowerRating) which lost 19.2%, one day after the
company warned that Q2 earnings would be almost half of what analysts expected.
Analysts polled by Thomson Financial/First Call expected the company to show
profits of 33 cents. The company warned that earnings would be between 17 cents
to 19 cents for the quarter.
Also getting beat up was Symantec
Corp.
(
SYMC |
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PowerRating) which ended down 36.5% after the Internet-security
software firm issued a profit warning on Thursday.
Manugistics Group Inc.
(
MANU |
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PowerRating)
lost 30.1% after the company reported a Q1 profit of 3 cents which met analysts’
expectations but warned that they would miss Q2 numbers by a penny.
While Loren
Fleckenstein enjoys his vacation, this column is being written by Greg Che.
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