Ned Riley

But after all the corporate governance issues, there's a tendency now of erring on the side of ultra-conservatism in terms of what companies say about future quarters and that's going to continue.

I believe the group is going to be able to grow at least 8 to 10 percent in the future and I think the SP earnings are going to slow down to maybe 7 or 8 percent, ... So this group could have actually a premium growth rate and yet a discount to the market that's, at least, 50 percent, if not lower.

The rally in the first two weeks of January was based on expectations that we would have a decent reporting period. Largely, that's been true, with many earnings reports meeting or topping estimates. But unfortunately, the commentary about the future has been a huge downer. That's one of the things holding investors back now.

The report will give investors some feeling in terms of wage trends, and inflation,

We're back to looking at the fundamentals and, at least temporarily, avoiding gossip and rumors.

I also feel very strongly that Procter Gamble's strategy is not going to be linked only to Procter Gamble. We will see other Dow-type companies that either have some economic sensitivity or a slowing of revenue growth start to announce restructurings.

But the question is more about economic growth.

It seems like there was massive indifference on the part of buyers, ... There were positive macro developments, but the market didn't react, and then program trading kicked in during the last hour.

Clearly it is not much of a surprise. There was a very strong feeling he would try to establish himself as an inflation hawk.

For the rest of the month, the focus for the stock market will be on interest rates.

I think the story is going to be the same going forward. We're going to see the tech companies reporting well. But the high interest rates we've seen so far have undermined some of the financial stocks and drug stocks.

I do think he's trying to pull a leadership role here a little more than being the economist, and that leadership is trying to get people upbeat.

Technology needs to be the leader on the way up, because it was the leader on the way down. Even though the earnings reports are miserable, there's a light at the end of the tunnel. That's what investors are looking at right now.

Today's sharp selloff shows that there were more bears on vacation in August than we thought, and they've come back nasty.

This is the greatest time to buy these stocks when nobody wants them.

This has probably been the most-telegraphed rate cut of all time. The market had already anticipated this. Now they are asking How much more can I get

Any (profit) short-fall in that growth rate at 110 times earnings means there's some risk in these stocks.

These companies are actually growing, ... The whole group is growing somewhere between 10 and 13 percent relative earnings growth and the price-earnings ratios are about 13 to 14 times. It's one of the few groups out there that are actually selling at their growth rate in terms of price-earnings ratio. And, right now, it's strange -- people don't like the group. It isn't a hot group.

There's a pause today, but the bulls still have the upper hand. The economic releases continue to support the case for strong economic growth through 2004 and a continued recovery in the labor market. Yet there are still plenty of skeptical people out there, suggesting the market could continue to build on the gains.

Today the market anticipated possible problems over the weekend. If nothing happens, we might have a better Monday than we've been having.

I think what we have is a recognition by investors that there is some decent value at this price. But whether they have the intestinal fortitude to stay during further adverse times is still unanswered. Today, they seem to have rallied based on the expectation that there is cheapness in some of these stocks.

You're going to get a lot more volatility on a day like today, but some of this activity, in combination with the Microsoft announcement, has clearly accelerated the volume on the day.

What really happened today is the retail sales report set the right tone, ... It appears that consumer spending is down.

A lot of these stocks were much higher a year ago than they are today. Clearly, the bottom-fishing issue is important and real.

We're just beginning to see justification for the market's rise, with the earnings that have already come in. The next test comes tomorrow, with the banks. People will be looking to see if loan demand in the economy has picked up.