By Clyde Noel

Stock Report

This is a tough time for investors. The Dow closed lower for the fourth consecutive week, while the Nasdaq extended its losing exposure to five weeks. Even the Town Crier index absorbed a couple of body blows.

The big names are giving investors the willies. IBM, General Electric, Cisco Systems and Intel are all struggling over their earnings prospects.

Earnings are on the front burner of everyone’s mind, including people who don’t play the market. The key market factor people want to see is the beginning of healthy corporate earnings.

It won’t be smooth sailing for the next couple of weeks until more corporations report their earnings. Companies with good numbers will see their stocks respond favorably, but those that disappoint will take a further slide down the market tables.

The tech sector, in particular, has been taking some lumps. Tech companies, like Cisco and Oracle, confessed they wouldn’t be able to deliver the goods and were decimated. In the meantime, the rest of the tech market continues woozy.

Are companies with low prices a good buy, or is their valuation still too high? Consider several examples: BEA Systems at $12.06 a share, Cisco Systems at $15.30, Intel at $28.39, Sun Micro at $7.97 and Rambus at $7.40.

This is a rough time for investors with oil prices on the rise, uncertainty in the Middle East, no profit recovery and now we find numerous analysts have not been honest with their clients.

Financial analysts, whose advice is heeded by investors everywhere, are coming under a conflict of interest scenario concerning investor protection.

The latest act in the stock market theater goes back to the dot-com bubble burst of 2000. After those stocks tanked, critics questioned why so many Wall Street analysts maintained “buy” ratings on stocks long after they knew the companies were failing.

While these offenses involve many analysts, at many firms, the New York Attorney General is concentrating on Merrill Lynch.

In another conflict of interest phase, analysts on television are asked when they are interviewed, “Do you own this stock? Does your company have a position in this company?”

Today’s market is all about being in a right group of stocks that are bullish. Unfortunately our attention is drawn to those stocks whose stories are dramatic and draw other stocks along with sympathy.

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