Despite All the Angst, Earnings Outlook for '98 Still Sanguine

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The tech-stabbed

Nasdaq Composite Index

is continuing to bleed this midday as earnings worry becomes earnings panic, but one Wall Street group seems to be surprisingly calm about next year's earnings outlook: sell-side analysts.

Facing a near-recessionary slowdown in Asian economies, analysts have dutifully lowered their fourth-quarter earnings estimates, said Chuck Hill, director of research at

First Call

. Before the Oct. 27 stock-market commotion, analysts expected fourth-quarter earnings for the

S&P 500

to be up 12.2% year over year, Hill said; the expectation now stands at 8.8%.

But that level of caution hasn't yet extended to 1998 estimates -- even those for the first quarter. Analysts still expect first-quarter earnings to beat the year-earlier figures by a hefty 17.2%, Hill said. "It's unrealistic to think we're going to go from 8.8 to 17.2," he said. "I think you've got to be looking over your shoulder pretty damn hard on whether we're going to have more than the normal negative revisions in the first quarter."

Similarly, analysts have barely budged on their estimates for full-year earnings growth. Before Oct. 27, the consensus called for a 14.8% rise over 1997's numbers. The figure today: 14.3%. "That's in the category of business as usual," Hill said.

Maybe analysts are being swayed by the slackening in negative earnings preannouncements for the fourth quarter. That's right, slackening. With 266 preannouncements so far, said Hill, 51% have been negative. That compares with a three-year average of 58%, and figures of 61%, 61% and 57% in the first three quarters of the year, respectively.

Hill cautioned against reading too much into the lower proportion of warnings, and indeed, the marketplace is hardly acting reassured. Around 12:25 p.m. EST the Nasdaq was down 20, or 1.3%, to 1516, with big tech bellwethers getting pounded like the

Buccaneers

against the

Jets

as investors scrambled to lock in gains:

Dell

(DELL) - Get Report

was down 5 1/8 to 83 1/8,

Cisco

(CSCO) - Get Report

down 3 1/8 to 73 7/16,

Compaq

(CPQ)

down 4 to 52 1/4 and

Microsoft

(MSFT) - Get Report

down 4 1/16 to 132 5/8.

Intel

(INTC) - Get Report

was holding up slightly better, down just 1 to 69 1/2. Overall, Nasdaq decliners led advancers by a 23-to-14 margin.

The small-cap

Russell 2000

also was getting crushed, down almost 4 to 419, but the

Dow Jones Industrial Average

was up 41 to 7879 and the S&P 500 was up more than 3 to 957.

New York Stock Exchange

breadth was more positive than that on the Nasdaq, with losers ahead of winners by a 14-to-13 split.

********

The

American Stock Exchange

composite index was down more than 2 to 663

(as originally reported, this story incorrectly said the index was up nearly 2 to 502)

, getting no boost from the morning's big event:

Charles Woodson

, the star

University of Michigan

defensive back who yesterday won the

Heisman Trophy

, rang the opening bell.

The AMEX sponsored the Heisman this year as part of its effort to raise public awareness of ... well, of its very existence. As well as its position as a leading market for trading options and small- to mid-cap stocks. The Amex balcony before today's open was crowded with visitors, from the

Clifton (N.J.) High School Marching Band

to

Claudio's Kids

, a group of all-star Pee-Wee footballers from Staten Island.

"I was telling people all weekend, 'Yeah, we're going to see

Peyton Manning

on Monday,' " one woman remarked. Putting such confusion to rest, Woodson stepped up to the balcony podium and offered soft-spoken remarks that were drowned out by the vast room's poor acoustics. Then, precisely at 9:30:00, he gave the brass-colored bell in front of him three sharp hammer strikes, then thrust his hand into the air to cheers and applause.

The Clifton band wrapped up with Michigan's "Hail to the Victors" fight song and a couple of other tunes, as traders on the floor below scurried around without another upward glance. One of Claudio's Kids, staring raptly at his Woodson-autographed football as he trooped off the floor, received a gentle admonition from his coach: "Chris, make sure that dries before you touch it."