Amazon (AMZN): Nothing Will Satisfy A Bear Market

By Douglas A. McIntyre Published Jan 31, 2:23AM EST

Wall St. has gone through the looking glass into Wonderland with Alice. The world is upside down now. Awful results at firms like E*Trade (ETFC) and Countrywide (CFC) can make shares rally. Outstanding results at a place like Amazon (AMZN) can cause a sell-off. It happened earlier in the month to Intel (INTC).

Amazon has to be the envy of the retail world, both online and brick-and-mortar. Fourth-quarter net income rose to $207 million, or 48 cents a share, from $98 million, or 23 cents a share, in the fourth quarter last year. Sales climbed to $5.67 billion, from $3.99 billion. That was all during a bad patch for holiday sales, one worse than any since 2001. Gross margins at Amazon dropped a touch, but just a touch.

Amazon also gave a robust outlook for 2008 and its shares dropped 11% to $65.

None of that makes any sense. The last time Amazon reported earnings, the stock reacted by moving above $100. The current earnings were better in almost every way, and the stock trades down by a third from where its was in late October.

A market is only as good as its reaction to the best earnings it sees. In a bull market, very good earnings get outstanding stock market results. Even mediocre earnings can be countenanced.

In a bear market, there is no such thing as good news.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.