The stock market will face one of its most critical weeks in recent memory next week, as the Federal Reserve, Cisco , Dell
and Google all take center stage.
The stock market has spent all year in decline on concern about rising interest rates and a slowing economy. The major indexes closed at new lows for the year on Friday, battered by news that the economy produced 200,000 fewer jobs than expected last month.
That leaves the Federal Reserve in a difficult position when it meets on Tuesday. The Fed has signaled that it will raise rates slowly in an effort to stave off inflation, but raising interest rates in an economy that is already slowing is risky. Yet to do nothing might send the message that the slowdown could be more than a temporary blip, as the Fed has opined. How the Fed balances those concerns could have much to do with the market’s — and the economy’s — direction.
Amid fears of a slowdown in tech spending, Cisco will report its quarterly results after the close on Tuesday. Analysts expect earnings of 20 cents a share, up from 15 cents in the year-ago quarter, on revenues of $5.89 billion. As for Cisco’s outlook, analysts are expecting earnings of 20 cents a share on revenues of $6.02 billion for the quarter ending in October.
Dell will give investors another read on the tech sector after the close on Thursday. Analysts expect Dell to report earnings of 31 cents a share, up from 24 cents a year ago, on sales of $11.72 billion. They’re expecting even more from the October quarter: earnings of 33 cents on revenues of $12.51 billion.
As if that weren’t enough, next week may also see the debut of Google under the Nasdaq symbol “GOOG,” but that long-awaited IPO may be delayed a week or more amid publicity about the company’s failure to register shares with the SEC and logistical issues that may still need to be worked out. Longer-term, the Washington Post reported that Google faces the problem of some 263 million shares eligible to be sold by insiders within six months of the IPO, 10 times more shares than will be issued in the IPO. That could pressure the stock longer-term.
The Nasdaq plunged 44 points on Friday to close at 1776, the S&P 500 fell 16 to 1064, and the Dow stumbled 147 to 9815. Volume rose to 1.52 billion shares on the NYSE, and 1.69 billion on the Nasdaq. Decliners led 20-12 on the NYSE, and 24-6 on the Nasdaq. Downside volume was 85% on the NYSE, and 89% on the Nasdaq. New highs-new lows were 26-156 on the NYSE, and 12-297 on the Nasdaq.
MCI jumped 15% on better than expected results and a 10% dividend.
Ctrip , Neoware
, Sipex
and WebMD
rose after beating estimates.
NVIDIA , CNT
and Blue Coat
plunged more than 30% each on disappointing results.
24/7 Media , Corvis
, Emulex
, eSpeed
and Microvision
fell on their results.
Navteq’s IPO priced at 22, opened at 25, and added 1% from there. The company provides map data for major Web sites.
