Why Oracle Wasn’t Enough
Stocks opened higher Tuesday on
positive news from Oracle but steadily gave ground throughout the session.
Overnight, Oracle
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fiscal Q4 earnings of 15 cents a share, beating lowered expectations of 14 cents
a share, according to First Call/Thomson Financial. That set the tone for the
open as investors hoped the results signaled the worst was over for America’s
slowing economy and corporate results. However, the major indexes lost altitude
throughout the session to finish slightly in the red. Oracle jumped 12.9%.
The Dow Jones Industrials closed off
0.5% and the Nasdaq Composite gave up most of its early gains to eke out a
negligible increase of 0.2%. As a result, Tuesday’s early rally proved a selling
opportunity. More evidence of economic recovery may be necessary before the
market is prepared discount a reprise in corporate profit growth.
Among the sectors, the financials
showed the most strength. The AMEX Securities Broker/Dealer Index
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rose 1.5%, aided by Lehman Brothers
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beating the high end of analyst estimates with earnings of $1.38 a share for the
May 31 quarter. Lehman’s CFO also said he expected business conditions to
improve in the fourth quarter, thanks to the effect of Fed easing and recovery
in corporate profits. The Philadelphia Bank Index
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Benefiting from a big weighting in Oracle, the Software HOLDR
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4.3%.
The S&P Chemical Index
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gained 1.1%, the Philadelphia Utility Index
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On the downside, the AMEX Airline
index
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2.1%, the S&P Transportation Index
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Among the individual stocks, SurModics
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will replace Eaton Vance in the S&P SmallCap 600 Index.
Siebel Systems
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after Salomon Smith Barney upgraded the stock.
Qwest Communications
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after the company said it sees strong demand for its voice and data services.
Omnicom Group
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Among the losers, Waters
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gapped down 30.0% after the company lowered its Q2 earnings outlook, citing
disappointing sales growth.
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