Are They Too High?
In the midst of one of the heaviest earnings weeks on the calendar, market participants are asking, “Are earnings and profit estimates too high?†And one of the most informed officials implied that they might be in light of his reading on the economy.
In his semi-annual address before the House Financial Services Committee, Federal Reserve Chairman Greenspan suggested that the economy is still under-performing, commenting, “We are not free of the risk that economic weakness will be greater than currently anticipated, and (could) require further policy response.â€
Stocks are receiving Fed Chief’s latest economic reading poorly as some of the largest financial and Internet/entertainment companies punctuate the Chairman’s comments with weaker-than-expected corporate performance report cards.
The Dow is down 106 at 10,500, the Nasdaq Composite is down 41.10 at 2126.98, and the S&P 500 is down 14.06 at 1220.41.
JP Morgan Chase
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points from earlier losses and is trading up 1.96 at 43.13. The announcement that JPM would buy back $6 billion of its stock is in large measure responsible for the rally in the face of negative news.
Also in blue-chip financials, the Dow’s worst-performing stock, American Express
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Media bull AOL Time Warner
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In the sectors, gold and silver
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PowerRating) +3.12%, is leading as the dollar-denominated metal rallies on a decline in the value of the dollar in the wake of Greenspan’s lowered assessment of the US economy. Drugs
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On the downside, Internets
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PowerRating) —2.97% are lagging sectors.