 |
||||||||
 |
||||||||
|
||||||||
|
Looking for a liftBy HELEN HUNTLEY, Times Staff Writer
© St. Petersburg Times The stock market suffered yet another bad day as Monday's news gave investors more reasons to worry about weak earnings and a slowing economy. But some analysts insist there could be a silver lining to the clouds of gloom: Stocks may finally be forming a bottom. In the lingo that technical analysts use, the major market indexes are retesting the lows set in July. The Dow Jones Industrial Average closed at 7,872.15, down 113.87 points and within easy striking distance of the year's low of 7,702.34. The Standard & Poor's 500 Index finished down 11.69 points to 833.70 Monday, not far from the low of 797.70. "What we've been waiting for since July is now playing out," said Art Huprich, technical analyst for Raymond James & Associates in St. Petersburg. "We probably will test the lows this week. Then we'll see what the mettle of the market is." He said there's a good chance that the worst could soon be over -- at least for the major blue-chip indexes. He is not so optimistic about the Nasdaq Composite Index, which hit a six-year low Monday. The technology-heavy index broke through its July low in August, then broke through its August low Monday, closing at 1,184.93, down another 36.16 points. "Nasdaq clearly hasn't hit bottom," Huprich said. Earnings warnings created a negative mood in the market Monday. JDS Uniphase lowered its outlook for the first quarter, touching off a selloff throughout the technology sector. Wal-Mart said September sales increases probably would be at the low end of previous estimates. Downbeat company reports are spreading concern that the batch of third-quarter earnings to be reported in October will be grim, especially compared with the turnaround that many investors had once hoped would materialize in the second half of the year. Such concerns were exacerbated by a weak economic report. The Index of Leading Economic Indicators, a key measure of U.S. economic activity, was down for the third straight month. The index, which is supposed to measure the short-term outlook for the economy, dropped 0.2 percent. Ken Goldstein, economist for the Conference Board, which publishes the index, said it indicates the "weak recovery could stall, especially if the consumer market starts to slow." The index includes indicators such as unemployment, manufacturers' orders and building permits. Some investors also were feeling anxious ahead of today's Federal Reserve meeting. Further interest rate cuts are considered unlikely. "We'll probably continue with a little volatility, but I'm looking for a turnaround by year-end," said Clearwater money manager Gloria Blackburn at Premier Investment Management. She said clients aren't very interested in putting new money to work in the market. "A lot of people have done bottom fishing already and seen that the prices actually were high compared to what happened later," she said. For those willing to invest, she recommends defensive stocks, such as consumer products and foods. Tampa money manager Fenn Giles of Florida Investment Advisers said the lower the market goes, the more attractive it looks. When a stock's price goes down but its dividend stays the same, the resulting higher yield often looks quite attractive compared with the low rates on alternative investments, he said. "I don't know if it is the bottom, but I think we're getting awfully close," he said. "People can almost look through any valley that's there and see some value in stocks at current levels." But investors are not lining up to buy just yet. "People are being awfully cautious," Giles said. "There are a lot of people out there who will not buy until the turn happens." -- Information from Times wires was used in this report. Helen Huntley can be reached at huntley@sptimes.com or (727) 893-8230.
 © 2006 • All Rights Reserved • Tampa Bay Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
From the Times Business report
From the AP
|
