By Clyde Noel

Stock Report

Hopes for a summer rally are diminishing by the day as corporate profits weaken and the outlook for the second half of the year remains dismal.

At Monday noon, the Dow was slumping more than 125 points and the Nasdaq was pushing 2,000 on the downside again.

The earnings story was ugly in the first quarter as 930 companies issued earnings warnings.

The second quarter had a slight improvement, but was still dismal.

Technology companies aren’t expecting a turnaround overnight because people aren’t buying personal computers and many corporations have stopped buying new technologies.

For the week, the Dow Jones industrial average rose 37 points for a 0.35 percent rise, the Nasdaq composite index fell 55 points for a 2.64 percent drop and the Town Crier 50, a representation of companies led by local residents, lost 3.84 percent.

Many companies are taking advantage of the slow economy to take write-downs in their quarterly reports in hopes of favorable reports in 2002.

Last Friday’s profit warning from Microsoft is good indication that the economic turn-around is still a ways off. A report of slumping PC sales led to a drop of $2.39 in one day.

The Town Crier Stock index is down 16.82 percent for the year because of several down-sliding companies. Analysts believe the market will go nowhere and stay in a trading range for the rest of the summer.

For the remainder of the year, corporate guidance of companies is guarded.

Noel, a seasoned investor, covers the stock market for the Town Crier.