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MORNING WATCH, Apr. 28
By Frederic Ruffy, Optionetics.com
4/28/2004 6:00:00 AM

http://www.optionetics.com/articles/article_full.asp?idNo=10298

Mixed corporate earnings news and ongoing concerns about rising interest rates seem to have set the table for a weaker open Wednesday morning. One hour before the opening bell, stock index futures pointed to losses for both the Dow Jones Industrial Average ($INDU) and Nasdaq Composite Index ($COMPQ). In addition, trading may be a bit cautious ahead of key economic data due out tomorrow and Friday.

Shares of Comcast (CMCSK) are set to trade higher after the cable television operator ended its $54 billion takeover bid for Walt Disney (DIS). Shares of Disney moved modestly lower on the news. Comcast also said that it swung to a profit in the first quarter. Net income rose to $65 million on revenues of $4.6 billion. CMCSK rose $1.85 to $30.70 following the news.

A large number of companies are reporting earnings this week and the results are expected to be well above year ago levels. As of yesterday, more than 300 members of the S&P 500 have reported profit results in the latest period. In addition, more than 75% have posted results that have topped expectations. Results are running nearly 25% above year ago levels, according to First Call.

Time Warner (TWX) and Anheuser Busch (BUD) are among the companies reporting results today. In addition, Bristol Meyers (BMY) is expected to trade actively after reporting an increase in first quarter profits thanks to higher sales of its cholesterol drug and its blood thinner. McDonald’s (MCD) said a weaker dollar and strong US sales helped push first quarter profits 56% higher. Costco (COST) may rise after declaring a 10-cent quarterly dividend. At the same time, RF Micro Devices (RFMD) may fall after lowering its sales forecast for the current quarter.

No economic reports are scheduled for Wednesday’s trading session. However, the widely watched Gross Domestic Product [GDP] numbers are due out before the opening bell Thursday. Weekly jobless claims and the employment cost index [ECI] are also due out tomorrow. Friday holds key data on consumer sentiment and manufacturing. Due to the recent rise in interest rates, which has been triggered by a series of strong economic reports this month, trading may be a bit cautious on Wednesday ahead of the data due out Thursday and Friday.


Frederic Ruffy
Senior Writer
Optionetics.com ~ Your Options Education Site