A few worthwhile reads

Tuesday, August 26, 2003 | 04:25 PM

Some interesting articles out today:

Bloomberg European Share Rally Belies Economic Growth Slump

Aug. 25 (Bloomberg) -- Depending on which headlines you look at, Europe has two different economies right now. If you are reading the market reports, you could be forgiven for thinking that business in Europe is in great shape. Germany's benchmark DAX index has surged 22 percent this year and has gained about 60 percent since its lows in March. Spain's IBEX has added 19 percent this year, Sweden's OMX is up 20 percent, and Switzerland's SMI has increased 12 percent.

Looks like everything's rosy, right? Not exactly. Listen to the flow of economic statistics, and a very different story emerges.

Reuters Analysis: Is 'Perfect Storm' Brewing for Bush?

WASHINGTON - As the 2004 election nears, President Bush could face an international "perfect storm" -- more attacks in Iraq and Afghanistan, an overextended deployment of U.S. troops eager to come home, and blackening clouds over the Middle East, North Korea and Iran. The confluence of world events will test Bush's foreign policy leadership even as he must concentrate on the U.S. economy and other domestic issues that could determine whether he wins a second term.

Although most Americans still have a favorable opinion of the president, his job performance rating has slipped to 52 percent positive and 48 percent negative in a recent poll of 1,011 likely U.S. voters by Zogby International. This compares with a post-Sept. 11, 2001, peak rating of 82 percent positive.

STORM BREWING "A perfect storm (on security) is brewing for the rest of the year," said one military planner, referring to a catastrophic clash of three storms that menaced the U.S. Northeastern coast in 1991. In Iraq, a major lightning rod is the issue of troops -- whether the 139,000 U.S. military on the ground should be supplemented with more Americans or foreign forces.

CBS.Marketwatch A word of caution from Value Line

"the market, which was attractively valued six or nine months ago, now looks pricey, ... since much of the favorable news on the economy and earnings still lies in the future... The market has come too far too fast to continue along this road without some profit taking along the way. We would take a cautious investment posture now, as a result."

WSJ 'Small Is Beautiful' to Stock Funds

Mutual funds have been turning to smaller stocks to help generate better returns this year.

As the economy has begun to show signs of recovery, many fund managers investing in large-capitalization or midcap stocks have said goodbye to some of their bigger-company holdings that had given them shelter during the bear market. Instead, they sought companies whose market capitalizations -- or stock prices times the number of shares outstanding -- were smaller in search of stronger growth prospects.

Yahoo News Optimism Premature After Intel's Surprise Forecast

SAN FRANCISCO (Reuters) - Investors may have brought out the party hats a little too early after Intel Corp., the world's largest microchip maker, boosted its revenue target for the current quarter. Since its surprise announcement Friday morning, Intel executives have twice tried to dampen expectations for a strong recovery in technology spending. Taking the cue, investors have since cooled on technology stocks, especially shares of companies in the microchip industry. . .

The rally Intel sparked was short-lived. On Friday, stocks eventually fell back to mostly flat levels after a wave of optimism generated by Intel's announcement. Speaking in Taiwan on Monday, Intel Chief Executive Craig Barrett put the brakes on hopes that the company's higher revenue forecasts marked a turnaround in technology spending. "It's too early to suggest it is a total turnaround," Barrett told a news conference. His comments mirrored those of Andy Bryant, Intel's chief financial officer, who on Friday said the company might be among the last to declare an end to weaker business conditions. He similarly declined to call a recovery

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