schaeffer's market recap

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    Market Recap

    With economic news noticeably absent this afternoon, investors turned to
    the wave of earnings news that washed over the Street. The major market
    indexes passed the session mired in the red despite several positive
    reports. Bear Stearns (BSC) and Lehman Brothers gave investors a taste of
    what's to come with the release of fourth-quarter earnings. BSC pummeled
    the Street's profit forecast of $1.81 per share with earnings of $2.19 per
    share. Lehman Brothers also slipped past the consensus estimate of $1.57
    with a quarterly profit of $1.71 per share.

    Elsewhere in the earnings realm, FedEx reported second-quarter earnings
    before charges of 87 cents per share, coming in short of the Street
    estimate of 90 cents per share. The company also expects third-quarter
    earnings to come in at 60-70 cents per share compared to the consensus
    outlook of 68 cents per share. Retailer Best Buy also got into the act,
    posting a third-quarter profit of 37 cents per share, which met the
    analysts' estimate. The firm now anticipates fourth-quarter earnings of
    $1.34-1.39 per share, falling just shy of expectations for a gain of $1.41
    per share.

    Turning to tech stocks, we find that California Micro Devices tacked on
    more than five percent in trading after stating that its expects third-
    quarter sales to come in at $16.2-17 million. The company set its earnings
    outlook at between six and nine cents per share versus the Street estimate
    of four cents per share. 3Com also saw some brisk trading ahead of
    tonight's earnings release. Analysts are currently anticipating a loss of
    14 cents per share.

    The Dow Jones managed to muster some late-day gains after struggling most
    of the day in negative territory. The average finished the day 15 points
    higher at 10,145. Of its 30 components, only 13 succeeded in pulling into
    the positive column. Among today's winners were Alcoa, Caterpillar, Home
    Depot, Wal-Mart Stores, and Exxon Mobile. The Nasdaq Composite tumbled
    three points this afternoon. In fact, its recent weakness has drawn its 10-
    day and 20-day moving averages into a bearish cross.

    Levels to watch for in Thursday's trading :


    Dow Jones Industrial Average (INDU) - support at 9800; resistance at 10,
    200


    S&P 500 (SPX) - support at 1049; resistance at 1080


    Nasdaq Composite (COMP) - support at 1880; resistance at 2000


    For a more in-depth market recap analysis, go to:
    http://www.schaeffersresearch.com/commentary/market_recap.aspx

 
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