Markets down, earning up. That’s okay.
The performance of the controls industry in 2Q02 presented a muddled picture. The market price of the Control Engineering Index declined (10%) about as much as the Dow Jones Industrial Average (11%), but not quite as much as the Standard & Poor's 500 (13%). This article is an expanded version of the news analysis that appeared in the September 2002 issue of Control Engineering.
This article is an expanded version of the news analysis that appeared in the September 2002 issue of Control Engineering. Click here to view the original item.
Stock index
The performance of the controls industry in 2Q02 presented a muddled picture. The market price of the Control Engineering Index declined (10%) about as much as the Dow Jones Industrial Average (11%), but not quite as much as the Standard & Poor’s 500 (13%). As would be expected by the poor showings of the dot coms and the tech sectors, the NASDAQ plummeted by 21%.
Some confusion is caused by the fact that the increase in the CE Earnings Index that occurred increased during the quarter. This would seem to indicate that the controls industry will continue to do a little better than the rest of the market, whether the total market goes up or down. The same can be envisaged for the CE Market Value Index that may be coming out of its roller coaster routine for the past two years. This index stabilized somewhat, but it should still follow the rest of the markets.
The market meltdown in July-right after 2Q02’s results occurred-and the subsequent gyrations in August don’t bode well for what these index may look like at the end of 3Q02. It can only be hoped that the investing world does what the experts, analysts, economists and just about everybody is saying to do: Hold, hold, hold for the long run. It is not that the economy is doing badly. The buyers are still doing their job not only in general, but also in the controls industry as the earnings attest.
It looks like a wild ride for the rest of the year and holding on will provide thrills-and no doubt chills-not experienced for a long time.
-George J. Blickley, contributing editor
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