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The market has flipped-flopped today. The cyclicals, particularly the oil stocks, are feeling the pain. But the consumer and defensive stocks are holding onto some gains.

The bond market continues to get beaten up. The five year Treasury is now well over 5%. I’ll be honest. I don’t like the look of this market. I’m not pulling out, but higher long-term rates are like Kryptonite to any bull market.

From our Buy List, Respironics (RESP) reported earnings of 38 cents a share, which was a penny below estimates. However, that included three cents a share in stock-option expenses. This is the first quarter that firms have to report earnings after stock options. Wall Street seems to be a bit confused about which number to follow for which company. Since Respironics is up this morning, I’m going to assume they beat estimates. The company also reiterated earnings for this year of $1.46 to $1.48 a share.

Fair Isaacs’s (FIC) earnings weren’t so good. The company earned 40 cents a share, which was 12 cents below Wall Street’s forecast. Fair Isaac said it expects earnings of 44 cents a share for this quarter, and $1.75 for this year. This was below the company’s earlier projections. The stock is down about 7% today.

The market is waiting for tomorrow’s GDP report. This will be our first look at how well the economy did for the first quarter. The report for the fourth quarter was a dud. I’m inclined to think it was a temporary blip as a result of Katrina and Rita. I think the first quarter number could be very strong. The bond market seems to be thinking the same thing.

Posted by edelfenbein at April 27, 2006 10:44 AM