Patrick Fitzgibbons chatted on AOL MarketTalk on Wednesday, May 3. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).

OnlineHost:

Live from New York, N.Y., please welcome Pat Fitzgibbons, markets editor,

TheStreet.com

. Pat can answer questions about the markets and investing. Pat does NOT offer individual stock commentaries or recommendations.

SageMoola:

Good afternoon and welcome to MarketTalk, Mr. Fitzgibbons!

P Fitzgibbons3:

Hi, everybody. It's great to be here.

Question:

Have earnings generally been strong this reporting period, and if so, why the heck does this market continue to experience weakness?

P Fitzgibbons3:

Earnings actually have been pretty strong overall. There have been a couple of disappointments. I think overall the market has suffered due to other kinds of disappointments and there are interest rate concerns. There are some concerns about supply of IPOs. I just don't think anybody has a real handle yet as to what

Greenspan

is going to be doing.

Question:

Would you avoid

AT&T

(T) - Get Report

in light of yesterday's earnings warning?

P Fitzgibbons3:

I can't really make a comment on individual stock, but I think AT&T still met its numbers. It gave kind of a daunting look ahead but it's still a very strong company. There was nothing in the numbers that suggest they will not remain a strong company.

P Fitzgibbons3:

I think what happened yesterday shows that even during a strong earnings season, just hitting your estimate can often not be enough. They met the analysts estimates for the quarter but still got whacked on future expectations.

Question:

What are your views about internet plays like

TROY

(TROY)

and

SGAI

(SGAI)

?

P Fitzgibbons3:

Again, I can't recommend individual stocks, but the Internet sector has come under a lot of pressure of late and investors really need to be careful of the names that they're choosing.

P Fitzgibbons3:

There are still quality names in the sector, but as the

Barron's

article a couple of weeks ago showed, there are still some concerns that these companies will be around in the next couple of years. Certainly a quality company like

TheStreet.com

will be around, but we can't be certain about everybody.

Question:

How many basis points are already driven into the market? Do you see a relief rally after May 16?

P Fitzgibbons3:

It really depends on what happens on May 16. Right now a 50-basis-point increase, there are a lot of people who are expecting that. I think if there's a 25-basis-point increase, the market could have some struggles going ahead because there are a lot of investors who think that gradually raising rates is sufficient. And that Greenspan has been more or less unsuccessful in this sort of gradual approach to rates.

Question:

Thoughts on B2C in general?

P Fitzgibbons3:

B2C is a sector that investors need to be very careful about. Last year's darling, B2B, certainly had a great 1999 and has suffered a little bit during 2000, or in some cases, has suffered a lot.

P Fitzgibbons3:

Whether it's B2C or B2B or any of the sort of easy acronyms we're using in the market right now, the best way to really pick the names is to do research, see if they have earnings, see what their future looks like. It's a very volatile time in the market, so you need to be prepared with your investments to deal with that volatility.

Question:

Do you recommend that investors build their CASH position these days and come back after summer when the bull resumes its course?

P Fitzgibbons3:

The summertime tends to be a more quiet time during the market, but during quiet times there's often more volatility. So, if you foresee increased volatility and a fear that you're going to need cash for whatever reason, then certainly you need to make that decision.

P Fitzgibbons3:

I don't think it's reasonable that just because summer's over the bull market will return. The fall tends to be a busier time, but I don't think that every year it is guaranteed that the market will have a better time.

Question:

If

SLE's

(SLE)

profits are higher than expected, why hasn't their stock price risen??

P Fitzgibbons3:

Sara Lee. There could be all kinds of reasons that their stock price has not risen to reflect their earnings. They're in the food business, and they make a great pound cake, but the food sector itself is going through kind of a difficult time right now.

P Fitzgibbons3:

It looks like there's going to be quite a number of mergers in the months and quarters going ahead. There was an interesting announcement this morning that

Unilever's

(UL) - Get Report

bid to purchase

Bestfoods

(BFO) - Get Report

for about $18 billion was rejected. That's a pretty big announcement, because Unilever has been buying up just about everything.

P Fitzgibbons3:

I think that things are going to have to shake out a bit more in the food sector before we really know where those stocks are going. I think Sara Lee will either be a beneficiary or a victim of all that.

Question:

What's your prediction for the market?

P Fitzgibbons3:

If I could make a prediction on the market I certainly would not be working at all, I think I'd be on the golf course in August trying to figure out which club to use. Seriously, up until the May 16 meeting of the

Fed

, the market will continue to be a little volatile.

P Fitzgibbons3:

I think volumes will likely slow a bit and then it might pick up a bit between May 16 and Memorial Day. Following Memorial Day, you get the summer slowdown. Depending on where rates go, I think that the market will be very focused on next quarter's earnings as they have been on the earnings season that just passed.

P Fitzgibbons3:

One of the real reasons that earnings didn't get the acclaim this quarter everyone thought they should was because of these rate hike worries. If those worries are put aside, you may see a more stable trading environment.

SageMoola:

Thank you very much for joining us today, Mr. Fitzgibbons!

P Fitzgibbons3:

Thanks very much. Thank you for all the great questions and I'll see you on

TheStreet.com

.