Common Thread In Earnings Guidance Today–Will This Be The New Trend?

Stocks are mixed on tepid economic data.
Jobless claims for the week of 6/16 fell 20,000 to 314,000, slightly less
than expected. Existing home sales for May fell 0.7% to 7.13 million vs
7.2 million consensus. 

Fedex
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by 0.02; the company also gave a a weaker outlook.

General Electric
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11 businesses into 6 and also reaffirmed Q2 and FY numbers, saying it is looking
for double digit growth in 2006.

Chinese oil company CNOOC offered $18.5 billion for Unocal
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topping Chevron’s $16.5 million bid. The Chinese government owns 70% of CNOOC.
Unocal has 1.75 billion barrels in oil reserves; 57% of which are in Asia. The
US could block the deal because of national security issues.

DR Horton
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midcap index and replaces Veritas. The date will be announced by Standard
& Poor’s.Talk is also that Google will be added, but that can’t happen until the
company has been public for a year; this happens in August. Over $1 trillion is
indexed to the S&P 500, and when a stock is added, its shares often rise in
anticipation of institutions buying them later. This “index effect” has been
declining of late; according to Stand & Poor’s, the median excess return between
announcement date and effective date was 3.6% between mid-2002 and mid-2004,
down substantially from prior years. In 1999, Paine Webber strategist Ed
Kerschner said that the 35 stocks that were added to the S&P in 1998 appreciated
on average 9.2% during the first six days after being added.

Rising commodity prices are starting to show up in corporate guidance.
Fedex cited rising jet fuel costs, Del Monte cited increased steel
and energy costs and Family Dollar
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prices. For the past year, the Dow Transports have outperformed the Dow, but
that has not been the case in the last several weeks.

Strong sectors are:   Semis
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+2.39%   Gold  
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$HUI.X.X |
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+1.97%     Oil Services
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$OSX.X |
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Weak sectors are:   Airlines  
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-0.79%     Chemicals
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$CEX.X |
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-0.54%     Banks
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$BKX.X |
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Herman Miller (MLHR)
reported Q4 of 0.31 and guided higher.

Nabi Biopharma (NABI)
received Orphan Medicinal Product designation from the European Medicines
Agency.

Research in Motion
(
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rejected two NTP patents.

Best Buy
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dividend by 9%.

Bed Bath & Beyond
(BBBY)
beat by a penny.

Family Dollar
(
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Rite Aid
(
RAD |
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Goldman cut Gannett
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GCI |
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AG Edwards
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