EARNINGS REVIEW- THERE'S A LOT TO LIKE IN THIS MARKET IN TURN-AROUND MODE

4/26/08 Saturday 5:27 pm CT

By Dave Harris

One major piece of news in the week ahead is the central bank's decision on rates Wednesday. We'll also get a reading on economic growth, or the GDP, for the first quarter. Meanwhile, earnings season is in full swing, and the market took notice of the generally positive reports so far. The major indexes brought in some decent gains last week, with the Dow 30 and S&P adding .4 and .5 percent.  

American Express (AXP) reported an ok quarter. The street was happy their profit fell ONLY 6 percent.  EPS was .84 cents. Starwood Hotels (HOT) had a better than expected quarterly profit of 44 cents per share. I think their raised guidance for the full year isn't priced into the stock properly. The P/E is around 20 and a little cheap. I would buy into the stock here at $53. Paper maker Kimberly-Clark (KMB) had somewhat disappointing results, but things are turning around in my view. Yes they face high cost for materials, but their marketing is top notch. It's hard to do cartwheels over Microsoft’s (MSFT) 11 percent profit loss in the quarter. But their guidance is re-assuring, and the PC division is hot! I like the stock at $29. Both earnings and revenue at McDonald’s (MCD) beat estimates earlier last week. That stock is a core-holding for any portfolio in my opinion. Let's not forget Ford (F). The company has been generally disliked on Wall Street for some time. Ford reported a $100 million quarterly profit on strong sales abroad. This could be a good point to buy into the stock because I see a turn-around here.  

So in addition to GDP and news from the Fed, this week's data includes consumer confidence Tuesday. Thursday is personal spending and income figures. Then Friday is the big jobs report with payrolls, work week and hourly earnings.  

The slew of corporate earnings continues with wireless company Verizon (VZ) on Monday. Burlington Northern Santa Fe (BNI) my favorite railroad, mall-owner Simon Property Group (SPG), and Waste Management (WMI) is due Tuesday. International Paper (IP), cereal producer Kellogg (K), cigarette maker Reynolds-American (RAI), the household products company Procter & Gamble (PG), and Starbucks (SBUX) is Wednesday. I would swap out of SBUX and put it into PG after the earnings reports. Thursday is drug store CVS Caremark (CVS) and Dow component Exxon Mobil (XOM). We close out the week with another energy company Chevron (CVX) and media corporation Viacom (VIA).