Wall Street Eyes Another Cut
01/26/08 - 10:35 AM EST
Joanna Ossinger
"Stocks are seeking equilibrium. They were grossly oversold" at the beginning of last week, says James Manfredonia, head of cash trading at Bear Stearns. "I expect many names to move sideways as people decide what the next quarter or two will bring. People will start to focus on the back end of the year" as well as on interest rates and the economic-stimulus package being offered by Congress.
If next week ends higher "and we see some more follow-through buying, that could go a long way toward helping psychology," Rotblut says. Last week, which was shortened due to a holiday on Monday, saw the Dow Jones Industrial Average gain 0.9%, the Nasdaq fall 0.6% and the S&P 500 add 0.4%. Market watchers are also likely to continue parsing the developments at French bank Société Générale, which said a few days ago that a rogue trader had cost the institution about $7.2 billion by making giant, unauthorized trades. On the economic-data front, job metrics are taking center stage. The ADP employment report comes out Wednesday, and then Friday the government's nonfarm payrolls and unemployment-rate data will be released. With so much focus on whether the economy will fall into recession, "the jobs report is critical," says Alan Gayle, senior investment strategist at Trusco Capital Management. "There is expectation that the economy is continuing to add a modest number of jobs." But, he cautions, "we're so close to zero on a lot of these numbers that we could see a lot of market volatility from them" because while the difference between a few thousand jobs up or down may not be significant on its own, the market's perception of the number changes drastically if it's positive as opposed to negative. On the earnings front, attention is shifting away from the beleaguered financials, which tend to report during the earlier part of each profit season, so the picture could improve. "If we continue to get good earnings news, we could continue this rebound" in the stock markets, Rotblut says. A number of Dow components will be reporting this week, including McDonald's(MCD Quote - Cramer on MCD - Stock Picks), Verizon(VZ Quote - Cramer on VZ - Stock Picks) and American Express(AXP Quote - Cramer on AXP - Stock Picks) Monday, 3M(MMM Quote - Cramer on MMM - Stock Picks) on Tuesday, Altria(MO Quote - Cramer on MO - Stock Picks) and Boeing(BA Quote - Cramer on BA - Stock Picks) Wednesday, Procter & Gamble(PG Quote - Cramer on PG - Stock Picks) Thursday and Exxon Mobil(XOM Quote - Cramer on XOM - Stock Picks) on Friday. The blue-chips have benefitted in recent months from strong global growth and the weak dollar, even as the U.S. economy has been sluggish, so their performances could offer clues as to whether the bullish international picture is still intact. The consumer, which represents about two-thirds of the spending in the U.S. economy, will be in focus. Mastercard(MA Quote - Cramer on MA - Stock Picks) and Western Union(WU Quote - Cramer on WU - Stock Picks) report Thursday, with airlines JetBlue(JBLU Quote - Cramer on JBLU - Stock Picks) and Northwest(NWA Quote - Cramer on NWA - Stock Picks) reporting on Tuesday and Midwest Express Holdings(MEH Quote - Cramer on MEH - Stock Picks) on Thursday. Auto-sales data on Friday and a Tuesday Conference Board update on consumer confidence will add to the flood of information. Also, several tech bellwethers report, with Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) on Tuesday, Amazon.com(AMZN Quote - Cramer on AMZN - Stock Picks) on Wednesday and Google(GOOG Quote - Cramer on GOOG - Stock Picks) Thursday. With the tech-heavy Nasdaq having gotten pounded so much in recent days, investors are likely to be looking to these three giants for their take on where the entire tech sector is headed over the rest of the year. |
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