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MORNING WATCH, Apr. 26
By Frederic Ruffy, Optionetics.com
4/26/2005 6:00 AM EST

http://optionetics.com/articles/article_full.asp?idNo=12316

Stocks are set to open to the downside on concern about corporate earnings and ahead of a report on consumer confidence due out later today. Approximately forty-five minutes before the start of trading in New York, stock index futures indicated that the Dow Jones Industrial Average ($INDU) might lose thirty to forty points and the Nasdaq ($COMPQ) might drop four or five.

Tech stocks might fall early Tuesday. Shares of Lexmark International (LXK) tumbled after the computer company posted profits of 99 cents a share, compared to analyst estimates of $1.03. The stock was recently trading down $6.75 to $72.05 a share.

In addition, chip stocks slipped in overseas trading after Germany’s Infineon Technologies reported a larger than expected loss during the second quarter. In addition, the company sees “no major improvement,” according to reports out early Tuesday. Dutch chip equipment maker ASM International (ASMI) also posted disappointing results Tuesday morning.

In other corporate news Tuesday, American Express (AXP) is due to report earnings during today’s trading sessions. Analysts expect the financial services giant to post profits of 75 cents a share. US Steel (X) might show strength after posting profits of $3.01 a share and well ahead of analyst estimates of $2.31. Genentech (DNA) is heading higher following positive results from the company’s Herceptin cancer treatment. However, Silicon Labs (SLAB) is set to open sharply lower after the company warned on fourth quarter earnings and announced that the company’s president and chief executive has resigned.

On the economic front, crude oil prices are trading down, but that does not appear to be helping the market early Tuesday. Crude oil was recently down 52 cents to $54.05. However, the move failed to lift stock index futures, as investors seem more focused on the day’s earnings news.

In addition, investors are awaiting two economic reports due out later this morning. The Commerce Department reports March new home sales data at 10 a.m. ET. Economists expect a decline of approximately 3% to an annual rate of 1,192,000 units. The Conference Board is due to release its consumer confidence report for April at the same time. Economists expect the report to show a third straight decline to 98 from 102.4 the month before.


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