By Clyde Noel
Stock Report
Although there’s little good news for investors, look for some cautious buying this week. After three weeks of falling prices on the Dow and Nasdaq, the pessimism will cease.
The conflict in the Middle East has the attention of investors, but advanced information on earnings are going to dominate the market the next several weeks.
An upbeat outlook from 3M pushed up the Dow last week while a profit warning from IBM pushed down the Nasdaq. The blue chip Dow industrials ended the week with a loss of 132 points or 1.2 percent.
The Nasdaq’s weekly loss was 88 points or 4.7 percent, while the Town Crier index fell 4.58 percent. An investment of $1,000 in each of the 50 stocks in the index indicates a loss of $835 since Jan. 1.
Double-digit losses were experienced by: BEASystems, down 10.50 percent; Legato, -14.43 percent; Nvidia, -13.20 percent; Rational Software, -18.13 percent; Symantec, -14.39 percent and Veritas, -19.90 percent.
Many of those losses were in sympathy with IBM because Goldman Sacks lowered its first-quarter revenue estimate on IBM, and Salomon Smith Barney downgraded the shares on a technical basis due to shares slipping below the 100 level.
The market is looking for good news, but most investors are holding their breath. The economic cross currents are confusing investors with the Federal Reserve looking at the interest rate next month and the weak 1st quarter recovery.
Gold is in vogue again since America’s battle against terrorism. Tensions between Israel and the Palestinians have made investors consider the precious metal.
If you haven’t noticed, the price of the precious metal has quietly moved over $300 an ounce. It has risen from $275 an ounce at the end of last year to its present level of more than $303 an ounce. Some investment advisers think it will go higher, but the only way to approach gold is through a mutual fund.
We need to readjust our expectations on making money on the market. We have been spoiled with 20 percent returns. Current portfolios show that equities may only provide 7-8 percent return in the immediate future so we have to look at 2002 as a base-building year.
Noel, a seasoned investor, covers the stock market for the Town Crier.
