Business News

Great news after the closing bell

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by Peter Switzer

Another bad day at the office on Wall Street and some of my readers and clients who can’t help but think they’re short-term investors, when in fact they are long-term wealth builders, are possibly starting to worry with the Dow down 145.64 points to 10,152.8.

However, there was great news after the closing bell and it could be a precursor to what we will see after mid-July. And boy, I’m hoping so.

Right now, the US economic readings aren’t as flash as optimists would like and the US consumer and the housing sector have been slow to rebound but some big name US companies have kept the home fires burning for the ‘glass is half-full’ types like Yours Yruly.

Beating expectations

Enter Oracle which reported a big boost in profit beating the experts’ expectations. The great result suggests that spending on IT is still healthy and is a nice forward indicator for the overall economy.

Oracle’s earnings came in at 60 cents a share for the quarter and that’s better than analysts’ predictions of around 54 cents a share and last year’s actual result of 46 cents a share.

Importantly, revenue rose 40 per cent to $9.6 billion and so the nice number did not come from cost-cutting, which was the problem last year with many companies that beat expectations.

Look to earnings

The hope is that the upcoming company reporting season in the US will surprise on the high side and the European bank stress tests also prove to be better than expected. If that happens then today’s negativity is a buying opportunity and, frankly, looking at the share prices of some great names and great dividend payers, it’s exactly that!

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Friday, June 25, 2010