THE WEEK AHEAD: Tech Data, Palm earnings on deck
Investors will turn their attention to more earnings reports and economic data next week, hoping to find a catalyst to ignite the moribund stock market.
Wall Street certainly didn't get any spark Tuesday when the Federal Reserve cut short-term interest rates by another half-point. Most analysts were hoping for at least a 0.75 percent reduction in response to the sagging U.S. economy.
This latest cut in the federal funds rate brought this key benchmark for short-term loans down to 5 percent following earlier half-point cuts on Jan. 3 and Jan. 31.
"We're teetering on the edge of a recession and today's action by the Fed is a significant move toward pulling us back from the brink," Jerry Jasinowski, the president of the National Association of Manufacturers, told Reuters.
Next week, investors will take a look at the Conference Board's Consumer Confidence Index for March.
Traders were a bit perplexed last week when a similar measurement from the University of Michigan checked in at 91.8 in March, slightly higher than expected and better than the 90.6 level registered in February.
The Consumer Confidence Index, which is based on a survey of 5,000 U.S. households, fell to 106.8 in February, down from 115.7 in January. The index has declined in each of the past five months.
Wall Street will also get the final Gross Domestic Product figures for the fourth quarter after initial reports showed the value of all goods and services produced in the U.S. grew 1.1 percent between October and December, the slowest pace in more than five years.
At least four prominent technology companies report earnings next week:
• Micron Technology (NYSE: MU) will finally report its second-quarter earnings next week after delaying the report earlier this week in order to collect financial data from Micron Electronics (Nasdaq: MUEI), the PC maker that's now getting out of the box business following its $130 million merger with Web hosting company Interland.
The memory-chip manufacturer was expected to report its results after the bell Wednesday.
First Call consensus pegged Micron Technology for a loss of a penny a share in the quarter, but company executives said it will turn a slight profit in the quarter on sales of $1.05 billion.
During a conference call with analysts, Micron executives said average selling prices of its dynamic RAM (DRAM) chips fell 50 percent from the first quarter while gross profit margins tumbled to 19 percent from 49 percent in the prior quarter.
Last quarter, Micron missed analysts' estimates when it returned a profit of $352 million, or 58 cents a share, on sales of $1.8 billion.
Trading below $47 a share, Micron is well off its 52-week high of $97.50 set in July.
• Manugistics (Nasdaq: MANU) will check in with its fourth-quarter results next week.
Analysts are expecting a profit of 5 cents a share on sales of $81.2 million.
The maker of supply-chain management software pocketed $3.4 million, or 5 cents a share, on sales of $70 million in its third quarter.
Trading around $26 a share, Manugistics shares are off more than 60 percent from their peak of $66.06 in November.
• Palm (Nasdaq: PALM), the handheld computer maker, is expected to turn a third-quarter profit of a penny a share on sales of $474 million.
Last quarter, it earned $27.5 million, or 5 cents a share, on sales of $522.2 million.
Palm shares are languishing around $14 a share, down from a 52-week high of $67.38 established in November.
• Tech Data (Nasdaq: TECD) will also report its fourth-quarter numbers next week.
First Call consensus expects the computer equipment distributor to rake in 86 cents a share in the quarter.
In its third quarter, Tech Data topped analysts estimates when it earned $47.2 million, or 82 cents a share, on sales of $5.2 billion.
Tech Data shares are trading around $27, down from a high of $55.88 set in August.
• PALM estimates
• MANU estimates
• TECD estimates >