The Market Today

Finally, a strong day for the market! The S&P 500 is at its highest level in two months. Our Buy List had a solid day across the board. While the S&P 500 gained 0.84%, the Buy List was up 1.82%. Twenty-three stocks were up and only two were down. Today’s big winner was Golden West Financial (GDW) which jumped 5.2%. We also got nice returns from Progressive (PGR) and Quality Systems (QSII).
We got new highs from AFLAC (AFL), Fair Isaac (FIC) and St. Jude (STJ). Varian Medical (VAR) is oh-so-close to a new high. Commerce Bancorp (CBH) was downgraded by A.G. Edwards, but it still managed to close higher.
Outside our Buy List, Intel (INTC) announced a huge $25 billion share buyback, plus a dividend increase. I’d prefer to see companies pay out dividends rather than buy its own shares. If investors want to buy more shares, that should be their choice. Companies should be in charge of operations; investors should be in charge of profits. Several companies are loaded up with cash. Cisco (CSCO) has $14 billion and Microsoft (MSFT) has nearly $50 billion. In fact, Wall Street was expecting a dividend from Cisco yesterday but the company balked.
Today was also D-Day. Dell’s (DELL) earnings came out after the close. The Street hated its last earnings report, plus the company guided lower a few days ago. Every financial media outlet has pounded on the company, and the shares fell below $29.
The company just reported earnings of 39 cents a share which was in line with its reduced estimate. Sales were $13.9 billion, slightly below expectations. For next quarter, Dell said it will earn between 40 and 42 cents a share, and revenue will be between $14.6 billion and $15 billion. The company is also buying back $1.7 billion worth of stock.
The knock on Dell has been that it’s focusing on the high-end, while its competitors are hurting it on the low-end. I think these criticisms are very much over-rated. Kevin Rollins, the CEO, has said that Dell has to have a balance between the high- and low-end. Plus, margins are much better on the high-end.
Lemme see…a record trade deficit is announced, the dollar rallied and 10-year bond had one its best auctions in years. Pardon me while I burn all my economics books. The bond market actually dragged the entire stock market higher.
General Motors (GM) plunged to a 23-year low. The stock is lower than where it was when Ralph Nader took on the Corvair 40 years ago. Two other things to mention: Seeking Alpha has a great collection of conference call transcripts. Also, Booyahboy Audit is tracking Jim Cramer.
Also, please feel free to e-mail me at eddy@crossingwallstreet.com. I’m going to start a regular Q&A feature on the Web site.

Posted by on November 10th, 2005 at 4:37 pm


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.