Ultimately, share buybacks can be responsible for growth, especially in times of flat earnings comparisons. Removing shares from the pool of outstanding stock and placing them in the treasury takes care of one side of the all-important earnings per share equation. Share buybacks can also serve as a favorable indicator that the company feels that "the price is right," reflecting confidence that the firm can earn a favorable return on investment in its own shares. Hardware and software giant INTERNATIONAL BUSINESS MACHINES CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> helped rally the market today, as well as its own share price by $9 3/8 to $99 3/8, after announcing that its board of directors has authorized the company to repurchase up to $3.5 billion of IBM stock. Newspaper conglomerate KNIGHT RIDDER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KRI)") else Response.Write("(NYSE: KRI)") end if %> rose $1 9/16 to $53 3/4 after announcing that it will repurchase an additional 3 million shares of its stock. STAC INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STAC)") else Response.Write("(NYSE: STAC)") end if %>, a data compression technology company, climbed $1 1/4 to $6 after announcing that its board has authorized a $10 million share repurchase. Rumors have been circulating that INTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> will announce a massive share buyback plan tomorrow as well.
The major Internet search engine and navigation companies all lost between 16% and 24% in trading yesterday. Today, they all rallied back, posting gains that virtually eliminated the prior day's losses. INFOSEEK CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEEK)") else Response.Write("(Nasdaq: SEEK)") end if %> rose $1 1/2 to $10 1/2, EXCITE INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %> gained $3 1/2 to $26, LYCOS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LCOS)") else Response.Write("(Nasdaq: LCOS)") end if %> climbed $4 1/2 to $25 7/8, and YAHOO! INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> was boosted $5 1/8 to $43 1/8. With no fundamental change in the fortunes of these companies or their underlying fundamentals, what accounts for the radical swings? Panic selling and program trading, followed by renewed confidence and optimistic buying! This group serves as an interesting proxy for the mania that has swept the U.S. markets over the last two days. This is further evidence that a renewed focus on individual company valuations is appropriate.
QUICK TAKES: MONSANTO CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %> extended its previously established plant genomics partnership with INCYTE PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INCY)") else Response.Write("(Nasdaq: INCY)") end if %> and announced a partnership with MILLENNIUM PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MLNM)") else Response.Write("(Nasdaq: MLNM)") end if %>, which helped Monsanto's share price up $4 5/16 to $42 13/16... Telecommunications and enterprise network products company GENERAL DATACOMM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GDC)") else Response.Write("(NYSE: GDC)") end if %> rose $9/16 to $6 3/8 after announcing that it had signed a multi-year agreement worth "up to $90 million" with LUCENT TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %>... Single family homebuilder STANDARD PACIFIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SPF)") else Response.Write("(NYSE: SPF)") end if %> added $15/16 to $10 3/4 after reporting 3Q EPS of $0.24 versus estimates of $0.20... After dropping 11% yesterday, SCHLUMBERGER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SLB)") else Response.Write("(NYSE: SLB)") end if %> rebounded $7 3/16 to $86 15/16 today after investors in the oilfield services firm realized that the previous day's loss did not reflect any fundamental change in its business. In addition, Morgan Stanley put the company on its "shopping list for recovery."
PATINA OIL & GAS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: POG)") else Response.Write("(NYSE: POG)") end if %> gushed $7/8 higher to $9 1/8 after reporting Q3 EPS of $0.01, versus a loss of $0.07 per share in its prior year period... Microelectronic circuits company AEROFLEX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ARX)") else Response.Write("(NYSE: ARX)") end if %> rose $3/4 to $10 3/8 after recording Q1 EPS of $0.08 versus estimates of $0.06... Insurance company EVEREST REINSURANCE HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RE)") else Response.Write("(NYSE: RE)") end if %> jumped $3 5/8 to $36 5/8 after reporting Q3 EPS of $0.76 last night, blowing away estimates of $0.69... Corporate news provider MEDIALINK WORLDWIDE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MDLK)") else Response.Write("(Nasdaq: MDLK)") end if %> reported Q3 EPS of $0.09, which helped its shares rise $1 5/8 to $16 3/8... Computer products re-seller MICRO WAREHOUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MWHS)") else Response.Write("(Nasdaq: MWHS)") end if %> gained $4 5/16 to $16 1/4 after posting a 3Q loss of $0.21 per share after a charge for settling litigation of $0.37... Programmable logic solutions company XILINX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XLNX)") else Response.Write("(Nasdaq: XLNX)") end if %> rose $5 11/16 to $37 5/8 after an upgrade from AG Edwards to "accumulate" from "maintain."
Of the companies that the Fool reported on last night that were hurt by yesterday's "correction" on a lack of fundamental news, all are up today, including laser sensors and sensor systems company CYBEROPTICS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYBE)") else Response.Write("(Nasdaq: CYBE)") end if %>, which rose $2 7/8 to $28 3/8; contract electronics manufacturer SMART MODULAR TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SMOD)") else Response.Write("(Nasdaq: SMOD)") end if %> was buoyed $10 1/4 to $51 1/4; and firewall software company RAPTOR SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAPT)") else Response.Write("(Nasdaq: RAPT)") end if %> gained $1 1/2 to $14... Contract electronics manufacturer SANMINA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SANM)") else Response.Write("(Nasdaq: SANM)") end if %> jumped $14 1/8 to $78 3/4 after reporting Q4 EPS of $0.63, topping estimates of $0.56. Morgan Stanley upgarded the company to "strong buy" from "outperform," and BancAmerica Robertson Stephens initiated coverage with a "buy"... Today's Wall Street Journal "Heard on the Street" clolumn gave a number of stocks a boost as David Dreman was quoted as saying the following "technology" issues may be good buys in the wake of the selloff: INTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> rose $10 1/4 to $85, MICROSOFT CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> gained $4 5/8 to $133 3/8, COMPAQ COMPUTER CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> rose $6 3/4 to $67 1/4.
Oil and gas industry equipment supplier COOPER CAMERON CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RON)") else Response.Write("(NYSE: RON)") end if %> moved $3 3/16 to $72 5/16 after posting Q3 EPS of $0.70 versus estimates of $0.68... DATASTREAM SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DSTM)") else Response.Write("(Nasdaq: DSTM)") end if %>, a computerized maintenance management products company, gained $3 1/4 to $30 1/4 after announcing a stock split and Q3 EPS of $0.31 versus $0.21 in the prior year period... Digital signal processing software and integrated circuit maker DSP GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DSPG)") else Response.Write("(Nasdaq: DSPG)") end if %> rose $6 5/8 to $35 1/8 after Cowen & Co. upgraded the firm to a "strong buy" from "buy" on the heels of DSP's Q3 EPS report of $0.32, a couple cents ahead of estimates... Software company ELECTRONIC ARTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ERTS)") else Response.Write("(Nasdaq: ERTS)") end if %> gained $2 3/8 to $35 7/8 after Deutsche Morgan Grenfell initiated coverage on the company with an "accumulate"... Medical information systems company HBO & CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HBOC)") else Response.Write("(Nasdaq: HBOC)") end if %> launched $3 7/16 higher to $43 1/4 after Gruntal & Co. reiterated its "strong buy" on the firm, adding that it has a price target of $53.
Optoelectronics company UNIPHASE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UNPH)") else Response.Write("(Nasdaq: UNPH)") end if %> rose $14 to $71 after it was upgraded by BT Alex. Brown to "strong buy" from "buy"... Information technology outsourcing company INFORMATION MANAGEMEMT RESOURCES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMRS)") else Response.Write("(Nasdaq: IMRS)") end if %> added $2 1/16 to $26 1/16 on reporting Q3 EPS of $0.15, beating estimates of $0.14... Business communications platforms company INTER-TEL INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTL)") else Response.Write("(Nasdaq: INTL)") end if %> gained $3 1/4 to $25 1/8 after reporting Q3 EPS of $0.16... Infection prevention company STERIS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STRL)") else Response.Write("(Nasdaq: STRL)") end if %> rose $4 3/4 to $38 3/4 after reporting Q2 EPS of $0.44, in line with estimates... Hip clothier GADZOOKS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GADZ)") else Response.Write("(Nasdaq: GADZ)") end if %> gained $1 7/8 to $22 7/8 after being raised by BT Alex. Brown to a "strong buy" from "buy"... Computer animation company PIXAR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PIXR)") else Response.Write("(Nasdaq: PIXR)") end if %> rose $3 3/8 to $25 3/4 after posting 3Q EPS of $0.08, topping estimates of $0.02.
Semiconductor capital equipment maker INTEGRATED PROCESS EQUIPMENT CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IPEC)") else Response.Write("(Nasdaq: IPEC)") end if %> added $4 to $23 7/8 after reporting Q1 EPS of $0.24... Managed health care concern COVENTRY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CVTY)") else Response.Write("(Nasdaq: CVTY)") end if %> rose $1 5/16 to $14 15/16 after posting Q3 EPS of $0.08 versus estimates of $0.07... AML COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMLJ)") else Response.Write("(Nasdaq: AMLJ)") end if %> announced that it had received Federal Communication Commission (FCC) approval to market its new amplifier for the U.S. and international cellular marketplace, boosting the stock $15/16 to $6 9/16... BDM INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BDMI)") else Response.Write("(Nasdaq: BDMI)") end if %> climbed $1 5/8 to $22 1/2 today on announcing the receipt of a competitive contract from the U.S. Army valued at $28 million... Syracuse-based ONBANCORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ONBK)") else Response.Write("(Nasdaq: ONBK)") end if %> gained $6 3/8 to $65 1/4 after agreeing to merge with Buffalo-based FIRST EMPIRE STATE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FES)") else Response.Write("(NYSE: FES)") end if %> in a deal valuing OnBanc at $67.13 per share in First Empire stock or $69.50 per share in cash.
Online and offline publishing company CMP MEDIA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CMPX)") else Response.Write("(Nasdaq: CMPX)") end if %> fell $6 1/4 to $18 1/8 after reporting Q3 revenues of $114 million and EPS (before charges) of $0.26, matching estimates. Goldman Sachs cut its rating on the company to "market outperform" from its "recommended list." Let's compare CMP with another online media company -- CNET INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNWK)") else Response.Write("(Nasdaq: CNWK)") end if %>. CNet's market cap of about $392 million is approximately $30 million higher than that of CMP. CMP has been around since 1971, with very well respected trade magazines like EETimes, Electronics Buyers News, and Information Week and has been run as a profitable company for years, while CNet was incorporated in 1992 and hit the airwaves and the ether in 1995. CNet doesn't run itself for profitability yet, while CMP regularly runs a profit and increased its operating margin last quarter. With 13 times the revenues of CNet, is CMP undervalued or is CNet overvalued? (Even backing out the bonus of having Ronald Reagan Jr. as a co-host of a CNet TV show.)
SLM HOLDING CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SLM)") else Response.Write("(NYSE: SLM)") end if %>, which operates the Student Loan Marketing Association, lost $9 1/2 to $146 after Prudential Securities cut its rating on the company to "hold" from "buy." Carla D'Arista of Friedman, Billings, Ramsey & Co., a firm that specializes in financial services and has been perhaps the most successful in covering SLM, continues to rate SLM a "buy," estimating 1998 EPS of $12.05. D'Arista says investors have yet to recognize the accomplishments of the new management, which last quarter "...downsized the balance sheet by $5 billion... repurchased 2.3 million common shares or 4% of shares oustanding, and reduced headcount by 4% and senior managers by 40%." Investors might do well to consider looking at a company that is just getting underway with an "early 1990s-style" restructuring that is run by a management team that was voted in on pledging to increase return on shareholders' investment through continued share buybacks.
ACC CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACCC)") else Response.Write("(Nasdaq: ACCC)") end if %> fell $3 1/2 to $26 1/8 after the competitive local exchange carrier and private branch exchange telecom company reported Q3 EPS of $0.28, but said new ventures will hurt upcoming results and delays in local access provisioning will keep local loop revenues below plan for the fourth quarter. ACC also announced a deal to acquire interexchange carrier US WATS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USWI)") else Response.Write("(Nasdaq: USWI)") end if %> via a stock swap and that the acquisition will be accretive to EPS in fiscal 1998.
QUICK CUTS: Women's clothing retailer PAUL HARRIS STORES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PAUH)") else Response.Write("(Nasdaq: PAUH)") end if %> was pounded for a $4 17/32 loss to $15 31/32 after BA Robertson Stephens cut its rating on the company to "long-term attractive" from "long-term buy," believing October same-store sales growth did not match September's torrid 12% gain in same-store sales... UNIT CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UNT)") else Response.Write("(NYSE: UNT)") end if %> lost $1 1/8 to $12 7/16 on reporting Q3 EPS of $0.09, up 12% over last year but below the analysts' estimate of $0.10... Telecom systems management hardware and services company ALLEN TELECOM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALN)") else Response.Write("(NYSE: ALN)") end if %> dropped $3 9/16 to $18 3/16 on announcing a 29% rise in Q3 operating income (before acquisition write-offs last year) and EPS of $0.29, in line with estimates. However, BT Alex. Brown lowered its rating on Allen to "market perform" from "buy"... BORG-WARNER SECURITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOR)") else Response.Write("(NYSE: BOR)") end if %>, which offers security services under the Wells Fargo and Burns brand names, fell $1 1/8 to $17 3/16 after reporting Q3 EPS of $0.19. The company said its electronic security business lagged expectations.
Specialty property & casualty insurer ACCEPTANCE INSURANCE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AIF)") else Response.Write("(NYSE: AIF)") end if %> fell $1 11/16 to $24 1/2 on reporting Q3 EPS of $1.22, below the mean estimate of $1.30. The company again achieved a superior combined ratio of 82% and a 21% increase in per-share book value from last year's third quarter... CENTRIS GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CGE)") else Response.Write("(NYSE: CGE)") end if %> lost $1 5/16 to $21 3/16 as the insurer reported a net loss of $0.39 per share before investment gains, better than the mean per-share loss estimate of $0.44... Engineering and training software company ANALYSIS & TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AATI)") else Response.Write("(Nasdaq: AATI)") end if %> declined $2 5/8 to $21 on reporting Q2 EPS of $0.39 (before a gain), up 11% over last year... Fountain softdrink equipment manufacturer LANCER CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: LAN)") else Response.Write("(AMEX: LAN)") end if %> took a spill, losing $1 1/4 to $12 7/16 on reporting Q3 EPS of $0.11, missing the mean estimate of $0.16... SAGA COMMUNICATIONS (AMEX; SGA) lost $1 9/16 to $20 7/16 even though the broadcaster reported a 40% rise in third quarter EPS of $0.14. Analysts were looking for EPS of $0.17.
FOOL ON THE HILL
An Investment Opinion by Jim Surowiecki
The Specs on Speculation
The crisis in Hong Kong's equity market, which in turn roiled stock markets from Frankfurt to Mexico City, was caused in the most direct sense by uncertainty about the strength of the Hong Kong dollar. As speculators attempting to test Hong Kong's commitment to its currency began selling HK dollars, the possibility of a Hong Kong currency devaluation panicked equity investors. In addition, the tactics Hong Kong's Monetary Authority had to use to avoid devaluation had ripple effects throughout the economy, driving up interest rates and shrinking liquidity. That had powerfully negative consequences for Hong Kong's already sketchy real estate market, which is one of the strongest engines of the island's economy. It was, in other words, a vicious circle.
The really confusing part about all of this to most American investors concerns the waves of currency crises that have beset Asian economies since the early summer. In the simplest terms, the key questions are: What does it mean to speculate in a currency and why does currency speculation work?
The essential point about currency speculation is that money is simply a commodity, like gold or coffee or oil. The prices of most commodities are allowed to float freely. Even though central banks may have large reserves of gold, for instance, they don't seek to keep the price of gold at a certain level. Instead, it floats, and the price is determined by the world market. Many countries, though, want to keep their currencies stable, and they want to avoid the possibility that a sudden change in the climate of world opinion could dramatically reduce the value of their currencies. In order to maintain that stability, smaller countries commit themselves to pegging the value of their currencies to the value of a larger country's currency. In practice, this means pegging to either the U.S. dollar, the German mark, or the Japanese yen.
Pegging can be done either loosely, which is what most Southeast Asian countries have done, or tightly, which is what Hong Kong does. In either case, though, the principle is the same: a country's central bank commits itself to selling dollars and buying its own currency in order to keep the exchange rate within a given band of value. In Hong Kong, for example, the Monetary Authority will exchange one U.S. dollar for 7.8 Hong Kong dollars or vice versa.
Now, if investors believe that the peg is solid, and that a country's central bank has deep enough foreign-exchange reserves, there's no economic motivation to challenge the currency. If the Hong Kong dollar is going to be worth the same three weeks from now as it is today, buying it or selling it short makes no sense as a speculative gamble. On the other hand, if speculators suspect that the currency is vulnerable because of thin foreign currency reserves and a weak commitment to the peg, then there's an incentive to gamble. If you sell the Malaysian ringgit or the Thai baht short today and two weeks from now they end up devalued, you can make a healthy profit. And unless you've sold them very, very short, there isn't much downside risk because the very peg you are trying to break limits how far the currency can appreciate.
Why, though, would a government's commitment to the peg waver? The most likely scenario, and the one that led to devaluation throughout Southeast Asia this summer, is a situation where the currency that serves as the peg -- in this case the U.S. dollar -- is very strong while the financial fundamentals in your own country are weak. Thailand, for instance, had the baht pegged to the U.S. dollar, but Thailand's economy was not as financially sound as the U.S. economy. Its banking sector was seriously unstable, its growth rate, though still high, was slowing, and the government was feeling increasing pressure to cut interest rates in order to boost employment. Under these circumstances, keeping the baht in step with the dollar was difficult. And that made the speculators come a-calling.
This doesn't mean that the arrival of the speculators was inevitable, or that they were simply messengers bringing bad news. Just as short-sellers in equities do, speculators do their best to convince the world that a collapse is not merely likely, but necessary, and in doing so they encourage others to become bearish. They want to create a stampede. If it works, a currency can collapse almost overnight, as everyone begins to sell it in exchange for dollars.
Still, in just about every case speculators can only work that bearish magic if there are real reasons to doubt the central bank's commitment to the peg. If people know that the currency will have the same value in dollars next month that it does today, they won't demand dollars today. The principle here is the same as in any run on a bank, namely people don't want their money until they think they won't be able to get it.
Now, the irony of the Hong Kong situation is that all indications are that Hong Kong's government -- which is really to say China -- is unswervingly committed to maintaining the peg, and it has in the last two weeks successfully beaten off currency speculators. The problem is that in this case the cure was a particularly painful one. On Thursday night, for instance, the Monetary Authority sent interest rates skyrocketing to 300% overnight and 50% for three months. They have since returned to less stratospheric levels. But as with the U.S. economy, rising interest rates bode ill for equities, and as a result the Hong Kong stock market, which has historically been incredibly volatile, simply fell apart. Hong Kong stocks had initially fallen on fears that the bank wouldn't maintain the peg, but then continued to fall when investors realized what it might take for the bank to maintain the peg.
Thus the relationship between currency speculation and equity markets. As for what this all means for U.S. companies, the answer is: it depends. On one level, the slowdown in Asian growth that we should see over the next year, a slowdown due both to currency deflation and to the banking problems that continue to plague the region, should have a mild ripple effect on the U.S. economy as a whole, perhaps somewhere between 0.3% and 0.5%. While that is not ideal, the slowdown may very well mean that the Federal Reserve will not raise interest rates next month or until the new year, and that is good news for the stock market.
More directly, companies that export a great deal to Asia will clearly be hurt, since the currency devaluations will make U.S. goods more expensive there and since the sharp drops in equity markets will make companies there more cautious about capital expenditures. On the other hand, U.S. companies that have plants in Asia should be helped, since labor and raw material costs will drop. (This is actually a complicated question, since currency conversions also play into it.) The important thing to keep in mind is that although Asia is a sizable market for U.S. exports, net exports to Asia remain only a relatively small part of the U.S. economy as a whole. For all of the talk about globalization, U.S. companies still do the vast majority of their business at home and in Europe. Expect the next few months to be terrifically volatile, but in the long run it's hard to see this as much more than a curious blip on the American radar. Which probably has something to do with why the market came back today.
SEAGRAM COMPANY and HSN, INC.
Regarding combination of television assets
(800) 558-5253 (password: 330 9589) -- replay through 10/28
(416) 626-4151 (password: 330 9589) -- replay for international callers
APERTUS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APTS)") else Response.Write("(Nasdaq: APTS)") end if %>
(800) 633-8284 (reservation # 3280075) -- replay through 10/29 @ 1:00 pm EST
OLSTEN CORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OLS)") else Response.Write("(NYSE: OLS)") end if %>
(800) 475-6701 (code: 361620) -- replay through 10/29
(320) 365-3844 (code: 361620) -- replay for international callers
CYBERCASH INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYCH)") else Response.Write("(Nasdaq: CYCH)") end if %>
(888) 566-0175 -- replay through 10/29
AVID TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AVID)") else Response.Write("(Nasdaq: AVID)") end if %>
(402) 220-0105 -- replay through 10/29
BJ SERVICES CO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BJS)") else Response.Write("(NYSE: BJS)") end if %>
(402) 220-9379 -- replay through 10/30
GENZYME <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GENZ)") else Response.Write("(Nasdaq: GENZ)") end if %> and GENZYME TRANSGENICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GZTC)") else Response.Write("(Nasdaq: GZTC)") end if %>
(800) 633-8284 (code: 3265950) -- replay through 10/30
(303) 248-1201 (code: 3265950) -- replay number for international callers
FORCENERGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FEN)") else Response.Write("(NYSE: FEN)") end if %>
(800) 411-5828 (code: 362389) -- replay through 11/3
(612) 321-9419 (code: 362389) -- replay for international callers
MORROW SNOWBOARDS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MRRW)") else Response.Write("(Nasdaq: MRRW)") end if %>
(402) 220-4249 -- replay through 11/4
10/29/97 (Wednesday)
ECSOFT GROUP PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ECSGY)") else Response.Write("(Nasdaq: ECSGY)") end if %>
11:00 am EST
(800) 266-1762 -- live US, toll free
(212) 676-5383 -- live US
+44 (0)171 335 1400 -- UK freephone
0500 701 087 -- UK
10/29/97 (Wednesday)
BANCO FRANCES DEL RIO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BFR)") else Response.Write("(NYSE: BFR)") end if %>
3:00 pm EST
(719) 448-2082 -- live (code: 394466)
10/29/97 (Wednesday)
BUSINESS OBJECTS ADS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BOBJY)") else Response.Write("(Nasdaq: BOBJY)") end if %>
(800) 633-8284 (code: 3195088) -- replay through 11/3
10/29/97 (Wednesday)
COMPUSA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPU)") else Response.Write("(NYSE: CPU)") end if %>
(800) 642-1687 -- replay from 1:00 p.m. EST for 24 hours
(706) 645-9291 -- replay for international callers
10/30/97 (Thursday)
MARKWEST HYDROCARBON INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MWHX)") else Response.Write("(Nasdaq: MWHX)") end if %>
4:00 pm EST
(719) 448-2006 -- live
THIS WEEK'S CONFERENCE CALL SYNOPSES
RAINFOREST CAFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %> Call
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