Americans Patient For War On Terrorism…
Last
night our president, George W. Bush, urged us to be patient with the war on
terrorism. I suspect Americans will be patient with our ongoing war on
terrorism, but I can’t believe investors, American or otherwise, will be very
patient with companies that are being forced to re-state earnings or that are
having their accounting practices called into question. A quick scan of energy
trading giants Williams
(
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Dynegy
(
DYN |
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industrial conglomerate Tyco
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shows me how quickly investors are willing to dump stocks that suspect will come
down with Enron-itis.
As
to news of the day, we are of course waiting for Alan Greenspan and the Fed
governors to address the economy and what, if anything, they can do to get our
economy on track. My feeling is that the most important thing the Fed needs to
do is hold fast with these low interest rates, not lower and certainly not
move to a hawkish stance and start raising rates.
This
morning’s economic numbers may give the Fed a slight warm and fuzzy, as the
Street was looking for a drop in gross domestic product, but the GDP actually
showed GROWTH! That’s right — GROWTH. OK, a 0.2% annual rate isn’t exactly going
to set off a buying spree, but the broadest measure of the US economy coming in
above expectations is certainly better news than a restatement of earnings,
something that the biggest US independent oil and gas producer, Anadarko
Petroleum
(
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PowerRating), is finding out up close and UGLY. In case you
hadn’t heard, APC is restating third
quarter
results to the tune of $1.7 BILLION to the bad, saying
the company had incorrectly calculated an impairment charge for low natural gas
and oil prices. OOPS!
One
other stock feeling the Bear’s bite is AT&T
(
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PowerRating),
which announced its fourth quarter profits crashed, but just barely
beat much-lowered Street estimates.
The biggest U.S. long-distance provider
took a $1 billion restructuring charge. And don’t forget about yesterday’s
stepchild Tyco International
which has seen its share value erode another 8% on the heels of yesterday’s 20%
loss on extremely heavy volume of 169,000,000 shares changing hands.