WESTON, Fla., May 11, 2004 (PRIMEZONE) -- Stocks ended Monday with sizable losses, after suffering a bruising end to last week, after a volatile session that saw all the major averages dip yet again, to near-term lows. The Nasdaq Composite closed down 21.89 points, or 0.81%, to 1896.07, while the Dow Jones Industrial Average dropped 127.32 points, or 0.9%, to 9,990.82. The S&P 500 was down 11.58 points, or 0.2%, to 1,087.81.
Stocks highlighted for this session include Linktone Ltd. (Nasdaq:LTON) , a leading provider of wireless value-added services to mobile phone users in China, which reported strong results for the first quarter ended March 31, 2004. For the first quarter of 2004, Linktone reported record gross revenues of $9.4 million, an increase of 440% over first quarter 2003 revenues of $1.7 million, and a 41% increase over revenue of $6.6 million for the previous quarter. The Company's gross margin for the first quarter of 2004 increased to 65%, up from 59% in the first quarter of 2003 and 57% in the fourth quarter of 2003. Linktone is featured today as TheSUBWAY.com's Pick Of the Day!
Also sure to be closely watched on Tuesday is Cisco Systems Inc. (Nasdaq: CSCO), which is due to report first quarter earnings after the close. The stock hit a 52-week high in trading approximately two months ago, but has been fading since.
Investors will also be watching Pacific Sunwear of California Inc. (Nasdaq: PSUN), which announced that the company repurchased an aggregate of 2,223,700 shares of Pacific Sunwear common stock in the first quarter at an average price of $22.483, for approximately $50.0 million. These repurchases complete the authorization made by the company's board of directors on January 28, 2004. The company also announced that the company's board of directors has authorized the company to repurchase up to an additional $25 million of Pacific Sunwear common stock.
Also, Electronic Data Systems (NYSE: EDS) said late Monday it may cut its dividend by two-thirds in order to maintain its investment-grade credit rating, according to a SEC filing. The computer services company said it was also considering raising more than $1 billion of additional capital by issuing equity and/or equity-linked securities. But the talk of the town is still Google, which is expected to have an initial public offering in the near future, an event that will probably mimic the IPO environment of the late 90's. The Company is reportedly being very tight-lipped about its plans, but it will be interesting to see the reactions of some of the space's biggest players, like Yahoo!, and Amazon.com.
The latest Federal Open Market Committee meeting was held on Tuesday, May 4, 2004, where the FOMC changed its tune somewhat, saying in its statement that "The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal," the FOMC said in its statement. "Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured."
In plain terms The Fed is saying that conditions have improved to the point that rates can start moving up from their current historically low levels, but will probably do so at a measured, and even pace . . . no 50 and 75 basis point hikes in the near future. The Fed also said it "continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity." Regardless, many analysts are saying the first rate increase may come as early as June.
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