Ten days ago, for instance, Intel announced that the quarter's revenues would be 3 percent to 5 percent higher than in the second quarter. On Monday, Eastman Kodak said profits would be 20 to 25 cents below analysts' estimates. Many other Internet stocks were dragged along. After all, Priceline's revenue has more than doubled in the last year, and Intel was hammered even though revenue was up from the previous quarter. The economy is prospering.
Interest rates are low. . . .
As any parent who's been through a few Christmas mornings knows, happiness and misery are often a matter of expectations. The wonderful new bicycle is a huge disappointment if Junior expected a go-cart. So, too, with stocks. The cold facts, even if they are good news such as growing profits, only reflect the past. So anything that points to a future that is not as bright as expected takes on oversized importance.