The US markets experienced another volatile month in March, but managed to ignite a sharp recovery after reaching new lows on March 9. The Dow Jones Industrial Average, S&P 500 and NASDAQ finished the month up 7.7%, 8.5% and 10.9%, respectively. Investor sentiment turned cautiously optimistic following a report that Citigroup recorded a significant operating profit, excluding write-downs, for the first two months of the year. As a result, on March 10, the Dow, S&P 500 and NASDAQ climbed 5.8%, 6.4% and 7.1%, respectively.

Wall Street was further encouraged by the Federal Reserve’s plan, announced on March 18, to purchase $300 billion in long-term US Treasuries and $750 billion in US mortgages to help stimulate the economy. Then, on March 23, Secretary of the Treasury Tim Geithner announced a plan to help remove much of the toxic assets held by banks, leading the Dow, S&P 500 and NASDAQ higher by 6.8%, 7.1% and 6.8%, respectively.

Although much of the news was encouraging, the current economic situation remains dire. This month, US unemployment claims jumped to a record 5.56 million, while existing home sales and prices continued to decline. US consumer spending rose just 0.2% in February, after climbing 1% in January, according to the US Commerce Department. With significant financial losses and misplaced faith in the government, regulators and corporate American investors were quick to capture profits following the substantial climb. For the first quarter, the Dow, S&P 500 and NASDAQ are down 13.3%, 11.7% and 3.1%, respectively.

Amongst the market madness, all four of the IBO Stock Indexes traded higher for the month. The Diversified Instrumentation Index improved the most, climbing 7.5%, followed by the Process/Metrology/Motion Instrumentation, the Laboratory Instrumentation and Lab Consumables/Equipment Stock Indexes, which grew 4.7%, 4.5% and 3.4%, respectively.

Laboratory Instrumentation Stock Index

For the month, the Laboratory Instrumentation Index rose 4.5% to close at 393.81. Seventeen companies improved, while five companies declined. Affymetrix led the Index, soaring 54%, while X-Rite fell 19%. For the first quarter, the Index is up 0.9%, with Bruker leading the way, up 52% and X-Rite down 30%.

Several of the companies in the Index reporting earnings this month experienced mixed results, while most their forecasts were conservative. On March 3, Bruker reported EPS of $0.18 (see page 12), $0.06 better than analysts’ expectations, sending shares up 15.9%. However, the company returned half of its gains the following day as investors secured short-term profits. Caliper Life Sciences reported on March 12 an adjusted fourth-quarter loss of $0.02 a share, $0.04 ahead of analysts’ consensus, leading shares up 6.4%. The company also projected first-quarter organic revenue growth of 3% to $25–$28 million and full-year organic growth of 6%.

On March 18, Transgenomic reported a year-end loss of $0.01, compared to a loss of $0.04 for the prior year, while fourth-quarter EPS were breakeven, comparable to the previous year. Shares fell 10.3% the following day. On March 20, OI Corporation announced a 2008 EPS of $0.18 (see page 12), compared to $0.08 for the previous year. Yet the company’s cautionary outlook and a decline in backlog orders led shares lower by 20.1%.

In other news, on March 2, Waters announced a $500 million share repurchase program over the next two years, yet shares traded lower due to weak market conditions. Later in the month, on March 27, Waters jumped 9.2% on speculation the company would be acquired and that its first-quarter earnings would beat expectations. On March 4, Sequenom approved a Share Purchase Right Plan (see page 2), helping shares climb 3.8%.

On March 19, Barclays upgraded Beckman Coulter to “Overweight” from “Equal Weight,” citing strong recurring revenue and upside revenue growth, following the acquisition of Olympus’s diagnostics business in July.

Process/Metrology/Motion Instrumentation Stock Index

In March, the Process/Metrology/Motion Instrumentation Stock Index improved 4.7% to 193.41, with five companies trading higher and three companies in negative territory. Veeco Instruments improved the most, jumping 57%, while ICx Technologies declined 11%.

Year to date, the Index has declined 20.0%, making it the worst-performing IBO Index. Five companies are in negative territory, led by ICx, which is down 49%, while Strategic Diagnostics is up 21%.

ICx Technologies reported on March 19 a fourth-quarter loss of $0.06 a share, compared to a loss of $0.32 a share a year ago and to analysts’ expectations of a profit of $0.01 per share. Shares declined 13.8% the following day. The company projected organic revenue to grow 14%–20% this year. On March 4, ICx announced a multiyear deal worth up to $40 million a South Korean company to develop MS for military use. Shares soared 23.7%.

Lab Consumables/Equipment Stock Index

The Laboratory Consumables/Equipment Stock Index grew 3.4% in March to 349.01, with six companies trading higher and two companies losing ground. Techne recorded the largest gain for the month, improving 12%, while Pall lost the greatest value for both the month and year, down 14% and 28%, respectively. For the first quarter, the Lab Consumable/Equipment Index has declined 4.2%, with five companies in negative territory and three companies trading higher, led by Life Technologies, which is up 39%.

On March 11, Pall reported adjusted fiscal second-quarter EPS of $0.38, $0.06 below analysts’ expectations, leading shares down 17.0% the following day. The company did not offer any new guidance for 2009. On March 3 and March 11, both Jefferies & Company and Wedbush Morgan initiated coverage of QIAGEN with a “Buy” rating, respectively. However, on March 13, QIAGEN declined 6.9%, following news that Hologic received FDA approval for two competing HPV tests.

Diversified Instrumentation Stock Index

The Diversified Instrumentation Stock Index improved 7.5% in March to 66.03, led by AMETEK, which climbed 18%. Four other companies improved, while Mettler-Toledo slipped 4%. For the first quarter, the Index is down 6.3%, with five companies trading lower, led by Teledyne Technologies, which has declined 40%. AMETEK is the only company in positive territory, having gained 4%.

On March 13, Robert W Baird downgraded Mettler-Toledo to “Neutral” from “Outperform.”

International

In March, all five Pacific Region companies in the IBO stock table improved, with Hitachi High-Technologies leading the way, rising 12%. Year to date, three companies have finished higher, with Horiba up 41%, while JEOL and Hitachi High-Technologies are down 3% and 4%, respectively. On March 12, Techcomp reported full-year EPS of $1.99 (see page 12), compared to $4.30 for the previous year, sending shares down 16.7%.

For the month, stock prices for eight European companies in the stock table declined, while prices for seven companies improved. Sartorius recorded the largest gain, improving 42%, while Oxford Instruments and Renishaw posted the largest declines, as each fell 13%. For the year, eight companies are in positive territory, led by Millbrook Scientific Instruments, which is up 64%. Seven companies are in negative territory, with Renishaw down 50%.

On March 4, Swiss firm Tecan reported adjusted full-year EPS growth of 2.9% to CHF 4.67 ($4.32), leading shares up 6.7%. The same day, UK-based Genetix announced adjusted 2008 EPS of 5.25 pence ($0.08), up 27.4% from 2007. The company also announced a 20% increase in its year-end dividend to 0.6 pence ($0.009) per share. Shares rose 2.7% the following day.

Shares of Renishaw plunged 9.9% on March 11 after the company announced that it expects to post an operating loss of £10 million ($13.8 million) for the second half of its fiscal year ending June 30. The company also plans to lay off 500 employees..

Chart: IBO Instrument Industry Stock Index

Lab Instrument Stock Index S&P 500

Mar-07 553.46 340.66

Apr-07 568.74 355.41

May-07 576.11 366.98

Jun-07 573.08 360.44

Jul-07 584.65 348.91

Aug-07 604.22 353.40

Sep-07 648.03 366.05

Oct-07 678.52 371.47

Nov-07 654.48 355.11

Dec-07 656.46 352.05

Jan-08 583.13 330.52

Feb-08 607.77 319.03

Mar-08 600.29 317.13

Apr-08 600.29 332.20

May-08 622.99 335.75

Jun-08 602.24 306.89

Jul-08 639.07 303.86

Aug-08 643.46 307.57

Sep-08 590.45 279.64

Oct-08 456.82 232.26

Nov-08 416.63 214.88

Dec-08 390.29 216.56

Jan-09 397.41 198.01

Feb-09 376.99 176.24

Mar-09 393.81 191.29