Today's Market: Flooded with Good News and Bad, Stocks Struggle for Direction

<LI>Lucent rises after missing lowered earnings targets, confirming job cuts.</LI> <LI>Compaq jumps after easily beating reduced earnings expectations.</LI>
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Updated from 9:24 a.m. EST

Investors were a bit weary after the latest flood of corporate earnings announcements brought some bad news since the market closed on Tuesday. Yesterday, the blue-chip

Dow Jones Industrial Average and the tech-soaked

Nasdaq Composite Index pulled off a hearty rally. In the past week, tech's been able to chalk up some decent gains.

We'll see if that happens later today. But, out of the gate, the major stock market indices were lower. The Dow was off 16 to 10,635. The Nasdaq was 8 lower to 2832. And the

S&P 500, which tracks the broader market, was down 2 to 1358.

Lucent Technologies

(LU)

, the beleaguered telecommunications equipmentmaker, this morning said that its

earnings were worse than expected. Lucent lost 30 cents a share in its first quarter, more than the 27-cent-a-share loss expected by analysts. The company also confirmed that it would slash 10,000 jobs and take a $1.2 billion to $1.6 billion restructuring charge. Still, the stock was up 1.3% to $19.13. It's well off its 52-week high that was closer to $71.

Lucent is not alone in slashing jobs. The newly merged

AOL Time Warner

(AOL)

reportedly has plans to

cut its workforce. And a host of smaller, Internet companies, including most recently

Excite@Home

(ATHM) - Get Report

and

MarchFirst

(MRCH)

, have been letting go employees as they try to race to the finish line of profitability. Excite and MarchFirst announced their layoffs last night, as

did PC maker

Gateway

(GTW)

.

Boxmaker

Compaq

(CPQ)

was skipping 15.1% higher after it reported earnings last night that surpassed estimates by 2 cents and revenue that was $200 million more than expected. Wow, right?

But

you have to remember the numbers it beat had been slashed back in

December when Lucent issued its latest warning.

While investors were focusing on the seemingly impressive numbers, Compaq was talking about its guidance for 2001 on a conference call. The company's CEO, Michael Cappellas, told analysts to expect revenue to grow 6% to 8% in 2001, well below estimates.

TheStreet.com's

Tom Lepri took a detailed look at the call in an

earlier story.

But all was not distorted or disappointing in other earnings announcements.

Siebel Systems

(SEBL)

was up 4.2% after posting shining earnings Tuesday after the close. The software company's fourth-quarter results were a nickel

better than expected, but the company did say its growth slowed. Siebel left its 2001 guidance unchanged, but hinted that its first-quarter revenue would beat expectations.

Also after the close, communications chipmaker

Broadcom

(BRCM)

beat

estimates by a penny and reported higher-than-expected revenue. The company's guidance for its next quarter said it would also beat estimates. Still, it was 4.1% lower this moring.

This morning, another stream of earnings announcements came out with stars going to blue-chips

DuPont

(DD) - Get Report

and

ExxonMobil

(XOM) - Get Report

, which both beat estimates. DuPont's estimates had been

previously lowered, though. ExxonMobil was helped by higher oil prices.

Drugmakers

Pfizer

(PFE) - Get Report

and

Bristol-Myers Squibb

(BMY) - Get Report

both reported earlier today. Pfizer's numbers were

in line with estimates, while Bristol-Myers managed to beat expectations by a penny.

There might be some sitting out today, however, as investors wait to hear what

Federal Reserve chair

Big Al says tomorrow when he addresses the

Senate

. His speech happens just two trading days before he and his crew meet up at the

Federal Open Market Committee. Investors are focused on the meeting, which concludes on Jan. 31, to find out the future direction of interest rates.

TheStreet.com's

Justin Lahart

yesterday took a look at how soggy sentiment is

blurring the outlook for an economic recovery.

Last week, it was practically a given that the Fed was going to cut rates by 50 basis points, but this week, as the country gets used to a new president and many earnings reports come out as predicted, word on the Street is the cut will be only 25 basis points, which is a quarter of a percentage point.

The earnings reports keep rolling off the presses, so check back to the site regularly for the latest news and market reaction.

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Bonds/Economy

The

Bureau of the Public Debt will issue its

Treasury buyback announcement. Also on Thursday, eyes will be on the latest

initial jobless claims. The benchmark 10-year

Treasury note was lately unchanged at 103 14/32, yielding 5.287%.

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International

The major European markets were on the slide since midday. They were boosted by computer and software companies, which were benefiting from positive earnings news Compaq and Siebel Systems.

The London

FTSE

was up 80 to 6294. The English market was also jumping for joy over some heavy hinting that the

Bank of London

is likely to lower interest rates in the next few weeks. According to minutes of the latest monthly meeting of the

Monetary Policy Committee

-- which was held on Jan. 11 -- four of nine members voted in favor of cutting the benchmark lending rate.

Meanwhile, across the channel, Paris'

CAC-40

was climbing 46 to 5886, and Germany's

Xetra Dax

was pulling off a slight rally, 9 higher to 6731.

The dollar was lately trading at 0.9228 euro.

Happy Chinese New Year! The celebratory mood didn't spill into other parts of Asia, however. Japan's

Nikkei 225

slid 91 points to 13894.

The yen fell against the dollar after a newswire reported that Lawrence Lindsey, economic adviser to President

George W. Bush

, said the U.S. would favor a weaker yen. Lindsey had said in talks with Japanese officials last week that the U.S. would tolerate the yen at 120 per dollar. The greenback was lately trading at 117.9 yen.

For more on the world stock markets, check out TheStreet.com's

global indices information.

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