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Wall St Week Ahead-All hands back on deck,.......... - 500 Beiträge pro Seite


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....................stocks seen rising
Sun Sep 02 00:56:00 EDT 2001




By Brendan Intindola
NEW YORK, Sept 2 (Reuters) - U.S. stocks are expected to rise
this week as Wall Street begins September by dusting off
vacation-idled desks to find stocks near five-month lows and a few
bits of encouraging economic data from late last week.
"It seems to me that the market is reading every bit of
information in the darkest possible shading. The pessimism is
setting the stage for the market to respond well when there is
news that is not as bad as the market fears," said Milton Ezrati,
senior economist and strategist at Lord Abbett & Co., an
investment management company which oversees about $40 billion.
"We expect the market to start recovering next week. A weekly
call is always problematic, but there will be more volume and the
bias should be up."
Trading this week will be cut to four days since the markets
are closed Monday, Sept. 3 in observance of America`s Labor Day
holiday.
Economic data, all covering August, set for release include
the monthly employment report on Friday, Tuesday`s National
Association of Purchasing Management`s index, and motor vehicle
sales announced on Tuesday.
Bob Robbins, chief investment strategist at SunTrust Robinson
Humphrey in Atlanta, said, "The NAPM numbers are going to be
pointing to a recovery in the economy and this is important
because this is the first time that real economic activity is
being shown to turn up out of six, seven or eight bad months.
"I am forecasting a significantly better than expected number
... and watch the new orders number, I think it will be
significantly better than expected," Robbins said of the NAPM
figures due Tuesday.
MANUFACTURING: PICKING UP A PULSE?
Last Friday, stocks ended a three-day rout that scalped
leading indexes to lows unseen since early April, and pushed the
Dow Jones industrial average (INDEX:$INDU) below 10,000.
Friday`s gain was built on new data showing signs of life in
the manufacturing sector: the U.S. government reported new orders
for goods ticked up 0.1 percent in July, well above an expected
drop of 0.5 percent.
Also, the Chicagoland Business Barometer rose in August to a
seasonally adjusted 43.5 from 38.0 in July, the National
Association of Purchasing Management-Chicago said.
At the same time, the University of Michigan`s closely watched
consumer sentiment index showed only a modest dip to 91.5 from
92.4 in June.
With this positive data, the focus is now sharpened for
Tuesday`s NAPM reading for August. The market is now expecting a
reading of 43.9 versus the prior month`s 43.6. A number below 50
indicates business activity is contracting.
MORE WALL STREETERS, LIGHTER MOOD?
Ned Reilly, chief investment strategist, State Street Global
Advisors, Boston, agrees recent sharp losses and an end to the
summer doldrums could lead to a positive week.
"I`m hoping that we would start a rally after the Labor Day
period because all of the players will be back. I think that they
should be in the frame of mind that stocks are pretty cheap at the
moment."
A diverse collection of stocks skidded to 52-week lows last
week, including Compaq Computer Corp.(NYSE:CPQ), Walt Disney
Co.(NYSE:DIS), Ford Motor Co.(NYSE:F), Sun Microsystems (NASDAQ:SUNW) ,
Starbucks Corp.(NASDAQ:SBUX) and Bank of New York Co. Inc.(NYSE:BK)
For the week, the Dow fell 4.5 percent, the Nasdaq tumbled 5.8
percent, and the S&P 500 declined 4.3 percent. Year-to-date, the
Dow is off 7.8 percent, to Nasdaq is 26.9 percent lower and the
S&P 500 has dropped 14.1 percent.
EARNINGS WARNINGS
Investors will likely have to digest more quarterly earnings
warnings, the kind of news that depressed last week`s market.
Specifically, fresh pessimism from Sun Micro and fiber-optic
leader Corning Inc. (NYSE:GLW) sent buyers running for the exits.
"The level of expectation out there has been diminished to
zero," Reilly said. "I can`t say the psychology could be any
worse. People are going to start looking at the glass one-quarter
full."
Reilly said that given the current negative market psychology,
earnings warnings will offer relief simply because the companies
are clearing the decks by going public with the news. For many
companies, investors have already marked down the prices of
stocks due to downbeat earnings expectations.
"I am hopeful that the pre-announcements will be forthcoming
and at least end the guessing and anxiety that was reflected in
stock prices in the last couple of weeks," Reilly said
"It is pretty well known that the third quarter (earnings) is
not going to show much improvement relative to the second, it will
probably mark the absolute low, and the fourth quarter will show
much more improved earnings," he said.
Companies, Reilly said, have had a long enough period of time
to reduce their variable costs, and manage once-bloated
inventories downward, "which was has been a very hard period for
most of these companies."
DATA POINTS: CARS, JOBS, NAPM,
In addition to Tuesday`s NAPM report, on Friday morning, the
market will get a look last month`s labor market. The average
forecast is for a 33,000 drop in non-farm payrolls, versus the
previous drop of 42,000, and 4.6 percent unemployment, compared to
4.5 percent in July.
Also, Tuesday will bring information about August car and
truck sales.

Copyright 2001, Reuters News Service


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