Last week, investors were served a full plate of earnings with a side dish
of Greenspan. Microsoft was arguably the stock of the week. The Dow member
received a boost at the start of the week, after Goldman Sachs noted it could
beat the mean Street estimate when it reported. Unfortunately, Microsoft not
only missed the average analyst prediction, but it also predicted lower first
quarter and fiscal 2005 earnings outlooks. Still, some analysts cautioned the
reduced forecasts stems from lost interest income due to its lower cash
balance. Microsoft will give back $75 billion in cash to shareholders over
four years through buying back its stock, lifting its quarterly dividend and
issuing a special one-time dividend. Meanwhile, the first part of Fed chief
Alan Greenspan's congressional semiannual report on monetary policy was met
with investor approval; however, enthusiasm waned by the next installment.
Motorola slumped despite posting strong quarterly results. "Motorola kind of
rolled over and the rest of the market followed," commented Robert Harrington,
co-head of U.S. stock trading at UBS's brokerage unit, to The Wall Street
Journal. "The earnings were OK, but people are worried about growth. Mr.
Greenspan said he isn't worried about the [economy's] growth slowdown in June,
but the market may be more worried than he is. If you are going to see slowing
economic growth, then earnings growth has probably peaked." Still, there was
some optimism in the market. Owen Fitzpatrick, head of the U.S. equity group
at Deutsche Bank Private Banking, said in a Reuters' news piece, "Definitely,
there's a little bit of bargain hunting going on, especially within
technology. We've seen some of the companies within that group report better
earnings, so that helps alleviate some of the concern ... At least, it shows
there's some hope out there."
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomson.com/financial .
SOURCE Thomson Financial Corporate Group
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