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Wall Street hopes for clear winner

Wall Street investors would be happy with having a clear winner -- George Bush or John Kerry -- by the opening bell on Wednesday, no matter who it might be.
/ Source: The Associated Press

Does Wall Street like Bush or Kerry? At this point, investors would be happy with having a clear winner by the opening bell on Wednesday, no matter who it might be.

The stock market hates uncertainty, and a second straight election decided by the courts could drive stocks lower for weeks — possibly until someone is inaugurated on Jan. 20. With the contest between President Bush and Sen. John Kerry just as tight as the 2000 race, and thousands of lawyers from both parties primed to pounce on even the smallest improprieties, only a solid Tuesday night showing by one of the candidates would likely forestall a downturn in the markets on Wednesday.

Regardless of the outcome, the election will likely overshadow a number of important economic reports and earnings releases in the week ahead, including the jobs creation report for October and earnings from media giants Time Warner Inc. and News Corp.

Last week, a sharp drop in oil prices persuaded buyers to re-enter the market, producing one of the best weeks of 2004. The Dow Jones industrial average had its first back-to-back triple-digit gains since May 2003, and posted three straight positive days for the first time in more than two months.

For the week, the Dow rose 2.76 percent, the Nasdaq climbed 3.13 percent and the S&P 500 added 3.14 percent.

ECONOMIC NEWS:

Friday’s job creation report from the Labor Department will be anxiously awaited, and could either help or hinder the market as it digests the election results. Analysts expect 160,000 new jobs to have been created in October, up from September’s disappointing 96,000. Unemployment is expected to remain steady at 5.4 percent.

On Monday, the Institute for Supply Management will release its manufacturing index for October, a measure of the economy’s manufacturing strength. The index is expected to dip slightly to 58.3, down from September’s 58.5 reading.

ISM will then release its non-manufacturing index for October on Wednesday. The index, which measures strength in the services sector, was expected to climb to 58.3, up from 56.7 in September.

The week will also bring reports on how consumers feel about spending — on Wednesday, automakers report their October sales, while the nation’s big retailers release their monthly results on Thursday.

EARNINGS:

Media stocks will be under scrutiny in the week ahead as two major media giants report their earnings Wednesday.

Time Warner Inc. is expected to post a profit of 14 cents per share before Wednesday’s session, up from 11 cents per share in the same quarter a year ago. The stock has traded in a tight range all year, falling from its high of $19.04 on Jan. 21 to close at $16.64 on Friday, a drop of 12.6 percent.

News Corp. — parent of Fox broadcasting, the 20th Century Fox movie studio and a variety of media properties — will report after Wednesday’s session. The company is expected to earn 31 cents per share, up from 29 cents per share a year ago. News Corp. has fallen sharply since its Feb. 17 high of $39.48, dropping 18.3 percent to close at $32.26 on Friday.

Other notable companies reporting in the coming week include:

  • Insurance giant Prudential Financial Inc., scheduled to report Tuesday afternoon, expected to earn 78 cents per share, up from 70 cents per share a year ago;
  • Cell phone equipment maker Qualcomm Inc., slated to release its earnings after Wednesday’s session, expected to earn 29 cents per share, compared with 14 cents per share a year ago;
  • Generic drug maker Barr Laboratories Inc., scheduled for Thursday morning, forecast to earn 48 cents per share, up slightly from 46 cents per share a year ago; and
  • Semiconductor producer nVidia Corp., expected to release earnings Thursday afternoon, expected to earn 8 cents per share, down from 12 cents per share a year ago.