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Hewlett Hopes to Beat the Street Again


Tech bellweather is one of Dow's most consistent players.

Minyan Morning Memo

One to watch: Founded in a garage by two newly minted graduates during the depths of the Great Depression, Hewlett-Packard (HPQ) has come a long way and is now the biggest technology company on Earth. (Incidentally, in common with Baskin-Robbins its name was determined by coin toss, an issue Johnson & Johnson (JNJ) never encountered.)

The tech bellwether and DJIA component is out with fiscal third quarter earnings after the close. It's tended to beat the Street under CEO Mark Hurd, a keen cost cutter who has overseen good growth after Carly Fiorina's contentious leadership. HP's iconic imaging business, while not quite the cash cow of old, remains a license to print money and the company is also of course the world's largest PC maker. It may lack Apple's (AAPL) "buzz" and faces heavyweight competition from IBM (IBM) as it expands in services, but the stock remains a Wall Street darling and should be well placed to ride a recovery.

What just happened: Suddenly, this summer's rally looks slightly less stellar after a worldwide stock sell off. Like so much else, yesterday's swoon was made in China and at the end of it all volatility was up but the Dow down 2%, its worst performance in six weeks. Language training company Rosetta Stone lost lots in translation, plunging 27.2% on a profit warning. Wynn Resorts (WYNN) was a loser again, following Friday's fall of almost 6% by sliding a further 7.4%. Healthcare was something of a safe haven. Andrew Cuomo wants to talk to Chuck, with New York's attorney-general suing Charles Schwab (SCHW) over auction rate securities.

What's happening: Asia ended up as Shanghai snapped back from its wost nosedive since November. Europe is in positive territory. Here at home, markets are heading higher at the open on the day space shuttle Discovery is scheduled to lift off. Despite shares having fallen for six of the past nine sessions, the Big Board clearly isn't crying over spilt milk since a company called American Dairy rang the opening bell. Doubtless a fine firm, if somewhat oddly named since it operates out of Beijing.

What will happen: In economics, at 8:30 AM Eastern a deflating development as core July PPI fell 0.1%, confounding expectations calling for a gain. U.S. housing starts slipped a more than projected 1% last month, though June's data were revised higher. We'll be learning about earnings from Analog Devices (ADI), Cardinal Health (CAH), Home Depot (HD), Saks (SKS), Target (TGT), TJX Companies (TJX) and Vestas Windsystems.

Happenstance: With all eyes on Hurricaine Bill, another Bill has lately been operating under the radar. Bond guru Gross, who made money aplenty preaching prudence, just bought a $23 million bayfront home which he promptly intends to tear down.
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