Brian.oco 0 Posting Whiz

Grasping, clawing, and scratching for a single slice, however thin, of good news out of the worst stock market week ever.

Okay. IBM’ earnings were actually pretty good. Tech spending for software and services – what Big Blue does best – is holding up, and if there is a soft landing spot in the stock market – one that will give investors a nice bounce into the next rally – the software side of the technology sector could be it.

One other piece of good news comes from utilities giant General Electric, whose third quarter earnings should also meet expectations – not a mean feat in this sour economy. That should give the stock market a shot in the arm today, global meltdown nothwithstanding.

Some other, more sobering, news from the economic front . . .

-- The global coordinated rate cut won't stop the recession, said Paul Donovan, senior international economist at UBS. “At some point too, even policymakers are going to have to accept; 'look we've put in place enough but we've had to pay for the massive stuff ups of the last decade.' And that's going to mean substantially higher unemployment, it's going to mean significant losses in pension funds. It's going to see massive losses in confidence right around the Western hemisphere, and increasingly it seems in parts of Asia as well. We're going to have to pay for it and as we pay for it, I think we're going to see stock markets selling off," James Shugg senior economist at Westpac Bank said.


-- The Dow's next downward stop could well be 7,500 points, predicts Ron Ianieri, chief markets strategist at the Options University. “And it won’t take too much to get there,” he tells CNBC yesterday.

One sector that could prove resilient to more downward movement in the stock market is medical technology stocks. Citi, taking time out from buying every brick on Wall Street, maintains a 'Buy' rating on Medical Technology Stocks BAX, COV and MDT.
One Citi analyst says, "Over the past two weeks, med tech has finally been dragged down by the broader market sell off. We still believe med tech is relatively well insulated from the current economic woes and expect another strong overall quarter for the space. In particular, we would focus on Baxter, Covidien, and Medtronic... Citi is lowering its target prices for all three stocks, however, as follows: BAX $72 (vs. prior $79), COV $57 (vs. prior $65), and MDT $57 (vs. prior $64.).

Just so you know Citi isn’t on an island by itself with medical technology stocks. Another big bank, UBS, has posted a “buy” tag on Baxter, which develops, manufactures and markets products that “save and sustain the lives of people with hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions,” according to the company’s web site.

Again, not much good news on the menu today, but medical tech stocks might just be today’s special.

I'll follow up with some more possible medical tech plays - hello Amgen - in my next post. Then it's off to the pub to wish "bon voyage" to the worst week in Wall Street history.

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