Markets head south

Frontline Solutions, Sept, 2004 by Margot Crabtree

For our trading session ended July 30, the major markets and the Frontline Ticker trended south, moved by consumer pullback, continuing terrorist threats, and a sharp spike in oil prices. Consumers kept their hands in their pockets this month, setting the Gross Domestic Product at a 3% annual gain for the April--June quarter. This was less than the 3.6% increase economists were expecting, and significantly off the 4.5% annualized growth rate at the beginning of the year. "We're looking at a more pronounced than expected slowing of economic activity, mostly because of the shockingly small increase in consumer spending," said Moody's Investors Service chief economist John Lonski in New York.

[GRAPHIC OMITTED]

The Frontline Ticker slid 70.54 points, or 7.32%, and closed at 893.49. Of the 47 stocks tracked in our index, declining issues outpaced advancing issues by a count of 41 to 6.

Demand for its software sent Kronos ahead this month by 2.72 points, or 6.60%. For the company's fiscal third quarter, Kronos reported net income of $11.2 million, or $0.35 per share, versus net income of $8.4 million, or $0.27 per share, in the year-ago quarter. This the 98th straight quarter in which the company's revenue has been higher than for the same quarter in the previous year. It's also the 69th consecutive quarter of profitability. Kronos chief executive Mark Ain cited sales of the company's Workforce Central 5, rolled out in March. Kronos closed at 43.92 and was our top dollar gainer.

Wall Street battered Cognex stock, kicking it down 8.40 points, or 21.83%. Though earnings were in line with analysts' estimates, revenues came in below estimates, at $54.5 million, versus the consensus estimate of $55.6 million. Cognex reported net income of $10.9 million, or $0.23 per share, for its second quarter ended July 4. Comparable income for the year-ago quarter was $3.3 million, or $0.08 per share. Cognex also raised its quarterly dividend by 33%, to $0.08 per share. Cognex ended at 30.08 and was our top dollar loser.

Shares of Proxim tanked after a federal ruling ordered the company to pay Symbol Technologies $26 million in interest and damages. In September, a jury said that Proxim infringed on Symbol Technologies' wireless patents. Proxim lost 0.31 points, or 26.27%, and closed at 0.87. Proxim was our top percentage loser.

[GRAPHIC OMITTED]