UPDATE 3-HP results top Street despite stronger dollar

by Robert MacMillan and Eric Auchard

SAN FRANCISCO, Aug 19 (Reuters) - Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz) results beat Wall Street targets, overcoming fears that slowing global economies and a stronger dollar would substantially weaken the world’s biggest computer and printer maker.

Shares rose 3.2 percent in after-hours trading on Tuesday after HP posted solid fiscal third-quarter international sales and said it expects fourth-quarter earnings also ahead of expectations.

“What we’re seeing here is that despite the concerns we had coming into the third quarter, they are not being overwhelmed by a currency hit yet,” said Jason Pride, director of research at Haverford Trust Co in Philadelphia.

Printer division results were not as rosy, but analysts were generally positive on the quarterly report.

HP reported net income for the fiscal quarter ending July 31 of $2.5 billion, or 80 cents a share, up from $1.78 billion, or 66 cents per diluted share, in the year-ago quarter. Read the rest of this entry »

Anchor Bancorp Drops 16%; Pioneer Drilling Up 8.4%

By Kejal Vyas

Renewed concerns over large financial firms and their ability to withstand a global economic correction trickled over to other sectors Tuesday, helping small-capitalization stocks close in negative territory.

Weighing on the financial sector was an avalanche of less-than-encouraging news, starting with several analysts warning about Goldman Sachs’s earnings.

Additionally, J.P. Morgan Chase said it is taking a $1.5 billion write-down on mortgage-backed securities, Morgan Stanley said it is buying back $4.5 billion in auction-rate securities and Wachovia revised its second-quarter loss lower.

Among small-cap financials, regional banks made up the biggest losers as Anchor Bancorp Wisconsin dropped $1.48, or 16%, to $7.97 after posting a 44% drop in fiscal-first-quarter net income. Not too far behind were shares of Sterling Financial, which slumped a dollar, or 10%, to 9.17.

Tuesday’s move for the sector halts a short-lived rotation into the financial sector as energy stocks have fallen in tandem with oil prices and investors seemed to have been testing the financial waters again.

“It’s like every time it seems like things are looking up, we get hit by another series of bad news,” said William Rutherford, president of Rutherford Investment Management. Read the rest of this entry »

More time and work needed for American economy to recover from present woes

In the past I have written in this column that it was going to take time and work to solve our present economic problems. We are in the midst of that process now. Still more time and work are needed.

After a slow start the Federal Reserve has found new energy, with some exceptions like their May and June exhortations regarding inflation that spooked the markets. Then it of course had to bail out Fannie Mae and Freddie Mac before the housing roof fell in. At its July meeting the Fed moved the prospect of rising interest rates further into the future, and managed to offend nearly everyone. At its recent August meeting, the Fed seemed to push interest rate increases even further into the future.

In the meantime, Congress and the Executive branch offered up a “stimulus” package that was swamped by the continuing high price of oil and falling house prices, and barely caused a ripple. Now both branches are back with a housing package that will have little impact.

As I said before, we cannot mount a recovery until the housing crisis is solved. The markets seem to understand this fact even if the deep thinkers in Washington and bank boardrooms do not. Read the rest of this entry »