It was a mood-swing week on Wall Street, though I don't think there's anyone left out there who feels confident enough to tell you what the market's going to do next. (Well, it will fluctuate, of course.) Beaten down by last week's producer price index number and the myriad misreadings of Alan Greenspan's comments, stocks came roaring back this week after the consumer price index for September was reasonable and Microsoft reported blowout numbers--no doubt all due to Slate, in some complicated way that not even we can fully comprehend. But then IBM came in on Wednesday night with a melancholy forecast for the next six months, which sent stocks tumbling for much of Thursday until they just stopped. It was actually an impressive feat of discriminating between good and bad stocks on the part of the market, instead of the perhaps more common "Kill 'em all and let God sort 'em out" approach.
I hope nothing else important happens between the time I write this and you read it, but if it does, just ask the closest 7-year-old about it. He'll probably give you a version much like the one in the previous paragraph. And so, on to the Cocktail Chat!
1. "AOL announced that it would be investing $800 million in PC maker Gateway, and that it would be entering a partnership with Gateway that should give AOL easier access to people who buy Gateway PCs, and Gateway easier access to AOL customers. Since Gateway's company mascot is a cow, speculation has immediately arisen that its version of the online service will be called America MOOnline."
1a. "Think of that as a Henny Youngman joke for the age of the New Economy."
2. "IBM met Wall Street estimates but saw its market capitalization drop by a staggering $40 billion after it warned that its sales in the next two quarters, well into next year, would be sharply lower because customers are so worried about the Y2K problem. Curiously, other tech giants, like Sun Microsystems, Microsoft, and EMC have said that Y2K concerns are having little or no effect on their business. But this does raise an interesting question: What will be the latest date that a company mentions Y2K as a reason for poor performance? I'm guessing July 2002."
3. "Tobacco companies' stock prices dropped yet again, with Philip Morris plummeting 24 percent in two days and R.J. Reynolds falling 15 percent. Director Michael Mann must be astonished at the powerful effect the early screenings of his anti-tobacco-company movie The Insider have had. Though it's possible that a Florida jury handing down a verdict in a class-action suit that could mean the companies will be shelling out even more multibillion-dollar payments might have something to do with the downturn."
4. "Gillette, which in the past year has made a habit of letting Wall Street down, did so again Thursday when it announced that sales in the next quarter would be lower because it was going to trim its inventory of razor blades. Gillette also said it was contemplating selling off some of its poorly performing divisions. Reuters reported that Gillette's shares were 'bludgeoned' in after-hours trading. Presumably with a 'blunt, heavy object'?"
5. "A bus-stop ad for a personal-injury lawyer here in Brooklyn tells potential clients to call this number: '1-877-I-CAN-SUE.' Doesn't Matlock have that on his business card, too?"
6. "Martha Stewart Omnimedia went public Tuesday and nearly doubled in its first day of trading, after some dubious trading shenanigans in its first hour. According to the New York Times, 'The offering was hot in large part because the founder of the company is so well known.' Ah, yes. I'd almost forgotten that legendary chapter in Graham and Dodd's Security Analysis: 'On the Importance of Fame in Valuing Stocks.'"
7. "Drug maker Eli Lilly saw its profits rise 15 percent in the most recent quarter, meeting estimates, but its shares fell nonetheless when it announced that Prozac sales were down significantly. Count depression as yet another casualty of the booming U.S. economy."