Good News From G.E.
Questionable accounting, mixed economic reports and positive guidance from General
Electric made for a somewhat choppy market.
The Dow slipped 1.66 to 9685.43; the Nasdaq fell 16.99 to 1838.54; the
S&P 500 lost 4.42 to 1090.02. The
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PowerRating) lost 4.29, or .79%.
Strong sectors were Gold and Silver
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two-year high, and Pharmaceuticals
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Telecommunications
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Internet [
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and Software
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General Electric
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selling shares in companies with complex balance sheets. “GE isn’t a
‘faith’ stock — it’s a performance stock,” CEO Jeff Immelt said in a
statement. GE rose 1.21 to 36.21.
The fiber optic sector was rocked by a warning from Ciena
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said Q1 profits would fall short, and that it would cut its workforce 12%. CIEN
said it expects earnings of between .19 and .22 per share; analysts had
previously forecast .11/share. CIEN closed at 9, down 1.12.
Wireless-service providers were weak, on concerns that new subscriber growth
will be weak, making it more difficult to pay down debt. The U.S.
telecommunications debt is estimated at $900 billion. After a modest report on
Monday, Sprint
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FON closed at 13.83, down 2.18. Sprint PCS
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wider-than-expected loss. PCS fell 2.77 to 10.99.
After falling the prior month, factory orders bounced back in December,
indicating the manufacturing sector may have already seen the worst of the
recession. Numbers from the service sector weren’t quite as rosy, with ISM index
slipping to 49.6 in January. A reading below 50 indicates contraction.
Tyco International
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PowerRating) continues in the spotlight, amid fears that a credit
crunch might threaten plans to split the company up. TYC’s senior debt was
lowered by both S&P and Fitch on Monday, pushing yields to junk bond levels.
After spending $80 billion in acquisitions over the past three fiscal years,
Tyco’s balance sheet has become difficult to analyze, some say. The most active
issue on the NYSE, TYC traded 174 million shares, down 6.80 to 23.10. The stock
has lost over 60% of its value.Â
After yesterday’s drubbing, Cephalon
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America Securities “Strong Buy” rating. The stock rose 1.97 to 57.96.