[Newspoetry] (fwd) Your Money: Fear Factors
Bryan Cribbs
bdcribbs at ojctech.com
Mon Jun 10 01:41:59 CDT 2002
I've never actually seen Fear Factor....
but in the words of some game show, we must be
scared. Don't sweat, our economy is moving
sideways...
1. What to Watch: Fear Factors
==============================
For yet another week, look beyond the economy for reasons
why the stock market is moving. Look to the Middle East,
where violence exploded once again. Look to the border of
India and Pakistan, where the threat of war continues,
despite continuing diplomatic efforts to diffuse the
tensions. Look to American courthouses and Congressional
committees, as investigations of corporate impropriety
continue to take center stage in the business world. And, as
the end of the second quarter draws near, look to companies
confessing that they may not hit their earnings targets.
Andersen, Tyco, a bus bombing: for investors, it was another
week of fears and frayed confidence. The situation was then
made worse by Intel on Thursday when the chip maker warned
that it would not meet its targets for sales or gross profit
margin in its second quarter.
All of this worked together to overshadow increasing
evidence that while the American economy may not be soaring,
it is steadily improving.
The Institute for Supply Management, an industry trade
group, reported last week that its factory index rose to
55.7 in May, from 53.9 in April. New orders and production
increased and factories reported the strongest demand for
exports since May 2000.
On Tuesday, Alan Greenspan, the chairman of the Federal
Reserve, told a meeting of bankers in Montreal that economic
events "look increasingly positive."
Then on Friday, the government reported that the nation's
unemployment rate in May slid to 5.8 percent from 6 percent,
and that businesses had added 41,000 jobs to their payrolls
after putting on 6,000 more positions in April, the first
back-to-back gains since the recession began in March 2001.
Nonetheless, by week's end, the Standard and Poor's 500-
stock index had lost 39.61 points, or 3.7 percent, to
1,027.53, bringing its loss for the year so far to 10.5
percent.
"The problem still lies in the geopolitical situation," said
Bryan Piskorowski, market commentator for Prudential
Securities Inc. "That's what's been leading the sideways-to-
downward action over the last couple of weeks. All said and
done, I'm hard-pressed to find an upside catalyst,
especially heading into the month of June."
This week, a number of reports should shed further light on
the condition of the nation's economy. On Wednesday, the
Federal Reserve releases its Beige Book report on the state
of the economy in regions around the country. On Thursday,
data will be released on retail sales and inflation at the
producer level in May.
On Friday, look for three measures of growth in the
manufacturing sector: business inventories for April and
factory capacity utilization and industrial production for
May. Also out will be a preliminary look at consumer
confidence in June from the University of Michigan.
The news is expected to be positive in these reports. But it
might not matter that much on Wall Street, at least not
right now.
-- Dan Bigman, Business Editor, NYTimes.com
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