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November 4, 2000
A Cupful of Tea Leaves
A boatload of economic indicators came out this week. The concensus is
that the manufacturing economy is definitely slowing. The National
Association of Purchasing Managers indexes showed a decrease in prices paid
for raw materials, and drops in new orders, equipment purchases, backlogs,
and production. However, the slowdown is largely confined to basic
industries, and high techs are still going strong. While there was no job
growth in factories, the labor market remains tight. Non-farm productivity
rose 3.8%, still ahead of unit labor costs, and above expectations.
There she goes again. In early October, I wrote about strange trading in
Oracle stock, citing a huge volume of small trades and an ugly intraday dip
one day. Well, last Thursday ORCL got hammered again, with false rumors
flying around that its CFO had quit, and even that the CEO had died. A
trade showing a sharply lower price added to the frenzy. It was cancelled
by the NASD, which is investigating the cause. The volatility in the
market, and in ORCL, illustrates the importance of the old maxim, "Know thy
stock." Knowing a stock can offer up some attractive buying opportunities,
as well as keeping you on course in choppy waters.
FOR OTHER INSTALLMENTS OF ERICA'S COLUMN
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