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COPYRIGHT 2004 FDCH e-media
Original Source: NIGHTLY BUSINESS REPORT
PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: The jury is in about the latest earnings reports on Wall Street, and the verdict is things are looking pretty good for corporate America, and they`re looking pretty good for the near future as well.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT ANCHOR: Going, going, Google: We`ll take a closer look at the auction process that Internet search engine Google will use to sell its shares to the public. We`ll tell you what to do to snag a piece of that hot IPO
KANGAS: It`s not exactly a win-win situation for Winn-Dixie (WIN). The grocery store chain slashes its workforce and sells off some of its assets in a bid to get itself back into the black.
PRATT: And tonight`s "Market Monitor" guest says his best advice these days is to bail out of bonds, and head into healthcare. He`s Larry Seibert, vice chairman and head of security selection at OAM Avatar.
KANGAS: I`m Paul Kangas.
PRATT: And I`m Suzanne Pratt. Susie Gharib is off tonight. This is NIGHTLY BUSINESS REPORT for Friday, April 30.
Good evening, everyone.
It doesn`t get much better than this for corporate America: Almost all of the companies in the Standard & Poor`s 500 have turned in their quarterly earnings, and the results are stellar. But as Erika Miller reports, investors should not necessarily expect an encore performance in the second quarter of this year and beyond.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: The curtain is falling on the first-quarter reporting season, and it`s ending on a high note. More than 80 percent of the Standard & Poor`s 500 firms have reported quarterly numbers. When those results are combined with forecasts for companies yet to report, earnings are running 27 percent ahead of last year. That`s double what Wall Street was projecting at the start of this year.
JOE COOPER, RESEARCH ANALYST, FIRST CALL: By and large, the biggest factor driving the recovery -- driving the profit recovery was the fact that the global economy is kicking in.
MILLER: One of the most encouraging signs this quarter is that more companies than usual are beating Street estimates, and they`re doing so by a wider margin. But investors are already focusing on the outlook for profits in the second quarter and beyond. Over the past two months, Wall Street analysts have been ratcheting up their estimates for second-quarter earnings. They now expect profits to be up about 17 percent in the period, followed by a gain of 12 percent in the third quarter and 14 percent in the fourth.
COOPER: The long-term average for profits in the S&P is to grow at 7 percent. We`re expecting double digits for all quarters this year and double digits next year, so an extremely rosy picture on the earnings front.
MILLER: The big question is whether the favorable earnings outlook will help boost the stock market or whether stocks will continue to struggle on worries of higher interest rates.
ROBERT ALBERTSON, CHIEF STRATEGIST, SANDLER O`NEILL: You`re going to have rising rates, and higher rates are bad for equity valuations. But if the earnings are that much better, it could very well be that the earnings carry the day and that`s what I expect.
MILLER: But with first-quarter reporting season almost over, analysts say the market`s focus will be squarely on interest rates next week. They say investors will pay close attention to the Federal Reserve`s meeting on Tuesday for any hints about the next policy move.
Erika Miller, NIGHTLY BUSINESS REPORT, New York.
KANGAS: Better-than-expected earnings from Avon (AVP), ChevronTexaco (CVX), and Procter & Gamble (PG) boosted the blue chips this morning. But weakness in the tech sector, especially the semiconductor...
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