WESTON, Fla., July 13, 2004 (PRIMEZONE) -- Financial issues were trading all over the board early Tuesday as earnings in the group were touched off by a rare miss from brokerage giant Merrill Lynch. And technology shares were mixed as results fueled concerns over the pace of earnings growth in the sector that has been at the forefront of the market's ascent over the past year. The software and semiconductor arena have been at the pulpit most often, with fresh warnings coming weekly. The Nasdaq Composite was up 12.28 points, to 1,976 after dipping heavily in the previous session, while the Dow Jones industrial average was higher by 21.42 points, to 10,240.87.
Also back at the forefront of investor's concerns is the price of crude oil futures, which seem intent on piercing the $45 mark. OPEC helped ease the price of crude back below $42 per barrel the last time it peaked, but many analysts feel they can only do so much going forward. The price of crude oil fluctuates and rises as trouble continues in the U.S.'s efforts in Iraq. Also damaging investor confidence were Commerce Department figures showing the U.S. trade deficit recently widened by 9.1 percent to a record $46 billion, much higher than what analysts were expecting.
Stocks on the move include Select Comfort Corporation (Nasdaq:SCSS), which announced preliminary second quarter 2004 net sales of $124.7 million, an increase of 22 percent compared to the second quarter of 2003. Select Comfort also announced revised sales and earnings guidance for 2004. For 2004, the company now expects sales of $560 million to $575 million and earnings per share of $0.88 to $0.93.
ChipMOS TECHNOLOGIES LTD. (Nasdaq:IMOS) which announced the pricing of the public offering of 7,000,000 common shares at $5.50 per share, with net proceeds from the offering of approximately $34.3 million. The Company has granted the underwriters a 30-day option to purchase up to 1,050,000 additional common shares to cover over-allotments, if any.
Compuware Corporation (Nasdaq:CPWR) which announced preliminary financial results for its quarter ended June 30, 2004. Compuware estimates its fiscal 2005 first quarter revenues will be approximately $286 million. The company expects earnings for the quarter to be break-even.
And MI Developments Inc. announced its intention to make an offer to acquire all the outstanding shares of Class A Subordinate Voting Stock of Magna Entertainment Corp. (Nasdaq:MECA) not currently owned by MID for consideration of US$1.05 in cash and 0.2258 of an MID Class A Subordinate Voting Share per share of MEC Class A stock.
The Federal Open Market Committee met last week, but it was at the previous 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 was 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." And they held true to the market's expectations last week, at the culmination of their latest meeting. Most analysts expect rates to continue moving higher, though slowly, for the next couple of years.
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