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Weekend Reading: Goodbye Microhoo!

Paul Kedrosky

05/04/08 - 02:16 PM EDT

Good Sunday, and welcome to another edition of Weekend Reading. First, a look back at the week that just finished, then a look forward to the week ahead, and lastly, some articles and papers worth reading.

The markets have declared a moratorium on subprime and recession worrying. The just-completed month of April was the first up month for the markets since November, and we now have had three consecutive weeks of gains. This week the Dow and the S&P 500 were up 1.3% and 1.2%, respectively, while the Nasdaq gained 2.2%.

Slightly weaker oil prices helped this week, as did an unexpected increase in oil inventories. While the Fed didn't put a halt to rate cuts, as many people hoped, we did benefit from a number of corporate reports that came in stronger than expected, as well as a stronger first-quarter GDP report than had been forecast. There is an increasing feeling out there, rightly or wrongly, that the current downturn will be less deep than many had forecast, leaving the big question of how long it will persist.

Looking forward to next week, the big news will come Monday with the inevitable plunge in Yahoo!'s(YHOO Quote) shares. Estimates vary, but it will likely fall back to the low $20s, at least, on news that Microsoft(MSFT Quote) has decided to stop banging its head on the rock of Yahoo's refusal to deal on an acquisition. Microsoft stock will likely climb on Monday, and Google(GOOG Quote) stock could do even better, given its role as spoiler here and how it will benefit from the news.

Turning to economic news, here are some things to watch on the week. We will see services, housing and productivity reports, as well as a Monday speech by Federal Reserve Chairman Ben Bernanke on mortgage delinquencies and foreclosures.

Turning to earnings, it will be another busy week. One of the most closely watched reports will be Cisco's(CSCO Quote), and expectations run high for the networking company. That said, weak results last week from Sun(JAVA Quote) should be making investors at least a little more nervous about the Cisco outlook.

Finally, here are some articles and papers worth reading:

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