Weekly Wrap

I'm in Scottsdale, Arizona with my kids who are on Spring Break. It's 85 and sunny every day. I'm in heaven. My golf game is improving (I've got a killer 5-iron shot and nothing else), and my skin is rapidly aging. Watching the market has been the last thing on my mind... but I've pulled together the big stories.

Jerri, (the wanna-be actress) got voted off Survivor. I can't believe she hung on this long. What I can't understand is, when is anyone going to notice that other girl Amber on the island? She's completely sailin' through without anyone even saying her name.

Oh yeah, market wrap.

It was another roller coaster week. It looked like we hit rock bottom on Friday of last week, until Tuesday of this week. Nortel Networks (NT), the biggest maker of fiber-optics, said that they expect a greater first quarter loss than they had originally anticipated. Like clockwork, the market tumbled on the news.

Tumbling seems to be the theme of late.

The other day I was talking to my brother-in-law and he said, "Joe Spade got riffed." I said, "Joe got what? Riffed?" And he said, "No, Reduction In Force.RIF'd." Aha, a new word for "layed off". If I knew who Joe was, I'd tell him it wasn't his fault, but a fact of the slowing economy. RIF'n is the latest trend.

Disney (DIS) announced that they would be RIF'n 4,000 people, or 3 percent of their work force. It will save them approximately $400 million dollars a year. LM Ericsson (ERICY) (the Swedish cell phone maker) will also be eliminating 3% of their employees, amounting to 3,300 jobs. This comes on the heels of Motorola (MOT) making the same announcement a few weeks ago.

American Greeting Corp. (AM) will be RIF'n 1,500 employees, or 13% of their work force. You'd think the card industry would be booming with all the depressing news. A little "Don't Worry, Be Happy, The Economy Will Come Back" card would certainly put a smile on my face. But, according to American Greetings, the slowing economy has put an end to impulse card buying. Vicious cycle.

Palm Inc., (PALM) the maker of the hand held computing devices said this week that they too would be laying off employees. They came out with their third quarter earnings this past week, beating market expectations, but they had to reduce their fourth quarter projections. The stock fell 28%. Does this even surprise you?

It surprised Julia Roberts. No, not the Palm thing, but winning the Best Actress for Erin Brockovich this past Sunday. Great movie. I love her. (Though I didn't love The Mexican.)

Today officially ends a three-month quarter, January to March. One of the stocks that had the biggest gains for the quarter is Advanced Micro Devices (AMD), which, if you can believe in a sky-falling tech industry, has risen 105%. To tell you the truth, I had never even heard of them.

Also doing well this quarter was Dillard's (DDS), up 86%, and Kmart (KM) up 79%. Kmart? Like people are impulse buying at Kmart? Or maybe they're stickin' to the necessities.diapers, formula, paper towels, and toiletries. But no cards. Kmart also has a new chief executive officer and I'm thinking I have to do a story on him next week. I will. Stay tuned. 

Other stocks up this quarter were Compuware (CPWR) up 60%, Apple Computer (AAPL) up 55%, AT&T (T) up 27%, Microsoft (MSFT) up 25%, and my favorite, Philip Morris (MO) up 9%.

One other positive note, Walgreen's (WAG) came out with their earnings this week and announced a 24% gain, ahead of Wall Street expectations. Doesn't it just make sense? We buy necessities and necessities only when the economy is down. Necessities and Philip Morris' beer. Oh wait, beer becomes a necessity when everyone and their brother is getting RIF'd. Nevermind.

Chick Karin

Closing Market Numbers