U.S. stocks posted mixed results last week despite generally positive
earnings and economic reports. The S&P 500 extended its winning streak to nine weeks, while a late afternoon sell-off on Friday prevented the Dow Industrials from doing the same. Home builders rebounded on the back of strong earnings and increased mortgage applications. Drug makers Johnson & Johnson and Pfizer both reported earnings above consensus estimates.

Financial stocks were stronger off of encouraging reports from
Wells-Fargo, Citigroup and JP Morgan Chase. E-bay posted another solid quarter of growth and forecasted earnings to be 50 percent higher in 2004.

Eastman Kodak announced a major restructuring, including a 20 percent reduction in its workforce. Its shares were up 12 percent on the news. Among the companies disappointing investors were AT&T, Segate Technology and Wyeth.

Telecom equipments names were also weaker, succumbing to profit taking after recent strong performance.

In merger news, Union Planters will acquire Regions Financial in a $6 billion deal. AT&T Wireless officially put itself up for sale and Cingular is reportedly a leading candidate to take over the struggling wireless operator. Looking ahead, earnings season continues and will be the main focus of investors. With over 160 S&P 500 companies having reported, 60 percent have exceeded expectations. On the economic front, the Fed meetings in the middle of week and the durable goods report also merit attention.

Stocks could be losing some near-term momentum as high expectations appear to be priced into current quotes and companies are opting to remain cautious on future guidance. However, for those with a longer-term horizon, sustained economic growth and low inflation bode well for the performance of equities.

”Weekly Index Performance:”

*DJIA: 10568.29(-32.22,-0.3%)
*S&P 500: 1141.55 (+1.72,+0.2%)
*S&P MidCap: 598.85 (+5.09,+0.9%)
*S&P SmallCap: 285.09 ( +4.94,+1.8%)
*Nasdaq Comp: 2123.87 (-16.59.,-0.8%)
*Russell 2000: 596.14 (+5.73,+1.0%)

”’Stanley Jacobs of MassMutual can be reached via email at:”’ mailto:ssjacobs@finsvcs.com ”’or via phone at 808-537-4591 x227”’

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