Earnings Season Arrives Amid This Morning's Holiday Lull

The bond market is closed for Columbus Day.
Author:
Publish date:

Finally, some numbers the market can sink its teeth in. Or at least gum for a while.

Yes, the long-awaited earnings season kicks off today. The one that was supposed to yank the market off its

Fed

watch post. The one that, according to

First Call/Thomson Financial

, analysts expect to yield earnings growth of more than 19% from last year.

Whether that kind of performance matters -- that is, whether it's already priced in, or whether it's trumped by fears that interest rates are going higher -- is what the market will start negotiating today. But it will have to negotiate without its much-needed guide, the bond market, which is closed today in observance of Columbus Day. Volume, thus, will likely be muted today.

Abbott Laboratories

(ABT) - Get Report

has already come out this morning in line with expectations.

All talk of strength aside, how much investors choose to focus on this quarter's negative surprises will also be a good litmus test of the market's psychology. This morning

Knight Trimark

(NITE)

was falling in premarket trading after warning that its third-quarter earnings won't make estimates.

Stocks weren't assuming anything this morning. At 9 a.m. EDT, the

S&P 500

futures were off 1.6, about a point below fair value and indicating a slightly negative bias to the open.

"You don't have the typical October moroseness over stocks," said Doug Myers, vice president of equity trading at

IJL Wachovia

. "At the same time, there's not exuberance in the market." Myers said that a lot of traders are waiting for the "vacillations and oscillations" of the gold and oil markets to sort themselves out. In the meantime, "you'll probably see volume stay on the light side as people decide not to decide."

Crude futures were lately quoted at $21.24 a barrel, up from Friday's $20.90 close. Gold was trading at $317.50 an ounce, down from Friday's New York close of $320.20.

Meanwhile, traders will be keeping one ear turned toward Phoenix, where Fed boss

Alan Greenspan

will speak at an

American Bankers Association

meeting at 10:00 a.m. EDT. A pointed phrase from Greenspan has roiled a thin market or two in the past, after all.

Global Crossing

(GBLX)

leads the morning's M&A news with its acquisition of the U.K.'s

Racal Telecom

.

U.S. foreign exchange markets are also effectively closed for the holiday. But the dollar trades on. Giving back some of its recent gains against the yen, the greenback was lately quoted at 106.73 yen. Traders betting on or against a quantitative easing of monetary policy by the

Bank of Japan

are looking ahead to the central bank's meeting this Wednesday.

Tokyo markets were closed today in observance of Taiiku-no-ki, or Health and Sports Day.

In Hong Kong, with all of this holiday observance putting a crimp on liquidity, the benchmark

Hang Seng

endured a volatile session, swinging between 12,913 and 13,150 to finally close down 119.70, or 0.9%, at 12,992.72. Some market participants were partially ascribing the weakness to worries over the pending sale of the Hong Kong government's blue-chip

index fund , a unit trust that holds the stock the government acquired during its $15 billion market intervention in August of last year.

The big European indices were recovering from morning weakness in early afternoon trading. Frankfurt's

Xetra Dax

was up 1.99 to 5421.25, while the Paris

CAC

was up 0.71 to 4722.64.

London's

FTSE

was up 9.2 to 6208.6 after falling back on the release of slightly stronger-than-expected factory gate price data.

Monday's Wake-Up Watchlist

By

Eileen Kinsella

and

Brian Louis

Staff Reporters

Mergers, acquisitions and joint ventures

Ask Jeeves

(ASKJ)

, a provider of natural-language, question-answering services on the Web, said

Microsoft

(MSFT) - Get Report

will expand its use of Ask Jeeves' "Corporate Question Answering Service" on Microsoft's personal online support site.

TSC

reported on the

deal in a story this morning.

Deutsche Telekom's

(DT) - Get Report

CEO told

Focus

, a German magazine, that Deutsche Telekom is pondering selling its 25% stake in

Global One

to

France Telecom

(FTE)

, according to a

Reuters

report.

German newspaper

Welt am Sonntag

said Deutsche Telekom is in talks with

SBC Communications

(SBC)

. However, the article didn't state whether the talks were regarding an alliance or a merger,

Reuters

reported.

Global Crossing

(GBLX)

confirmed it's buying

Racal Electronics'

Racal Telecom

for roughly $1.65 billion. The news was reported in today's

Wall Street Journal

and

Financial Times

.

Nokia

(NOK) - Get Report

said it will begin cooperation with

IBM

(IBM) - Get Report

in promoting and building mobile Net solutions.

Unisys

(UIS) - Get Report

announced a multimillion-dollar agreement with

Dow Jones

(DJ)

, publisher of the

Journal

, as part of a redesign initiative for the editorial and pagination processes.

Warnaco Group

(WAC)

has offered to buy

Authentic Fitness

(ASM) - Get Report

for $20.50 a share in cash, a 16.7% premium over Authentic Fitness' closing price Friday.

Earnings/revenue reports and previews

(Earnings estimates are from

First Call/Thomson Financial

.)

Abbott Laboratories

(ABT) - Get Report

posted third-quarter earnings of 38 cents a share, in line with the 15-analyst estimate.

Datastream Systems

(DSTM)

said it sees third-quarter earnings of between a 1-cent profit, or a 1-cent loss, well below the four-analyst estimate of 16 cents a share.

Fastenal

(FAST) - Get Report

reported third-quarter earnings of 45 cents a share, a penny shy of the six-analyst estimate of 46 cents a share, but up from a year-ago 37 cents.

Knight/Trimark

(NITE)

warned that it sees third-quarter earnings between 17 cents and 19 cents a share, citing slower trading. The 10-analyst estimate currently calls for earnings of 30 cents a share.

TSC's

James Cramer

had his

say on the preannouncement this morning.

New Era of Networks

(NEON) - Get Report

said it see third-quarter revenue to be about $30 million to $32 million, a record for quarterly earnings. The company said it expects to report a net loss, about in line with estimates. The 10-analyst estimate calls for a loss of 18 cents a share in the third quarter.

Private Business

(PBIZ)

said it expected third-quarter and annual earnings to fall below analyst estimates. The company said it sees third-quarter earnings between 4 cents and 5 cents a share, and fourth-quarter EPS between 4 cents and 6 cents. The two-analyst estimate calls for 7 cents and 11 cents, respectively.

Analyst actions

Morgan Stanley Dean Witter

upgraded

Chevron

(CHV)

to outperform from neutral.

J.P. Morgan

downgraded

Norfolk Southern

(NSC) - Get Report

to long-term buy from buy.

Morgan Stanley upgraded

Texaco

(TX) - Get Report

to outperform from neutral.

Miscellany

British Airways

(BAB) - Get Report

said it would buy 12

Airbus Industries

A318 planes for $471.4 million, and had options for an additional 12. The deal comes as a blow to

Boeing

(BA) - Get Report

, which had hoped to sell its own 100-seater, the 717.

DaimlerChrysler

(DCX)

said it will invest $27.5 billion in Germany over the next three years. The money earmarked for Germany is part of a $47.66 billion worldwide investment package announced earlier this year.

The "Heard on the Street" column in the

Journal

cites two new studies which show that employee options grants do not cut company net income by as much as previously thought.