A government report indicating an increase in factory orders failed
to create excitement in the stock market, as stocks slipped in today's
shortened trading session. Does this surprise us? No way!
The manufacturing sector has been in a deep slump all year -- through
May, factory orders for 2001 were down 4.8% from the same period
last year. In fact, even though orders increased in May, they were
down 6.2 percent from May 2000. And, the National Association of
Purchasing Management just reported that in June the manufacturing
sector declined for the eleventh month in a row -- reflecting that
the sector is still in recession.
Plus, the stock market continues to be battered by disappointing
earnings warnings. Late yesterday, chemical giant DuPont lowered
its second quarter earnings estimates, citing a global economic
slowdown, poor demand, and a strong dollar. And the list of companies
issuing warnings continues to grow: Axsys Technologies ... Epiphany
... i2 Technologies ... Broadvision ... Internet Security Systems
... Multex.com ... Payless ShoeSource Inc. ... Rational Software
... Roadway Express Inc.
Until investors are assured that earnings will improve, there is
no light at the end of the tunnel.
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