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Great Expectations

Samsung meets them; eBay does not.

As go the annual rites, the stock market spent January and early February rewarding companies that had lived up to their promises and exacting punishment from those that had not. The big news: on February 9, Carly Fiorina was booted out of Hewlett-Packard for failing to deliver on the promise of the HP-Compaq merger. If you’d been watching HP’s stock, you wouldn’t have seen it coming: it slid a mere 1.9 percent from January 7 through February 4, presaging nothing. But that was just the point: the company’s board was tired of waiting for results. Its shake-up caused the largest one-day move in the stock in more than a year, a 6.9 percent gain.

The stocks of underperforming companies are more likely to fall than to rise, mind you. After coming up short in their fourth quarters, both Amazon.com and eBay suffered rampant selling. The online auctioneer lost nearly a third of its market capitalization over the four weeks ending February 4. Amazon was not far behind. Still, some companies began the year well. New it company Samsung Electronics led the charge, with perennial it company Apple Computer close behind. Sandwiched in between: video game maker Electronic Arts, which saw its quarterly revenue slip but still meet investor expectations in December, resulting in a stock price gain of 15.6 percent through early February. The company, whose stock has returned well over 1,000 percent in the last decade, might be inclined to quote Bonasera from The Godfather, who said, “I believe in America. America has made my fortune.” And it wouldn’t be inappropriate: on February 2, Electronic Arts announced that it was developing a video game of Francis Ford Coppola’s masterpiece. Duff McDonald

The TR Large-Cap 100 and Small-Cap 50 indices are updated daily online: www.technologyreview/trindex

You could almost see this one coming. Shares of ExxonMobil were hitting all-time highs in early February as investors celebrated the oil giant’s fourth-quarter profit of $8.42 billion—the largest quarterly profit ever reported by a U.S. company. This was humbling for analysts, who had expected earnings per share of $1.07. Reported earnings of $1.30 were more than 20 percent higher than that consensus.

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