Today’s Market

Yuck! That wasn’t pretty. The market dropped over 123 points yesterday. The commodity sector, and oils in particular, were hardest hit. The Dow Energy index dropped 3.6%, and the tech index lost 3.1%.
It seems as if there was almost a delayed reaction to Tuesday’s big drop in oil prices. Oil is now at a two-month low, and I think it’s headed even lower. As oil falls, lower fuel costs will help the better airline stocks, particularly my favorite Frontier Airlines (FRNT). Remember, the price of crude peaked before the hurricanes hit. Oil is already down another $1 a barrel this morning.
Some of our health care stocks got dinged yesterday when Wright Medical (WMGI) said that its third-quarter earnings will be significantly below Wall Street’s estimate. The stock got nailed for a 20% loss. This spilled over into some of our medical stocks like Medtronic (MDT), Stryker (SYK) and Biomet (BMET). However, Wright is a very small company and its problems shouldn’t be taken as a reflection of the entire industry.
This morning, Wal-Mart (WMT) said that Hurricane Katrina will shave one penny a share off earnings. Also, GE (GE) said that it will hit the high end of its third quarter forecast of 44 cents a share. The company said that earnings for the entire year will come in at $1.81 to $1.83 a share.
The market should rally today, but the big news will be tomorrow’s employment report and next week’s earnings.

Posted by on October 6th, 2005 at 9:25 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.