Despite sustained economic volatility during August, the US equity markets and US dollar strengthened. Investors were encouraged by better-than-expected manufacturing data, consumer confidence and durable goods orders for July, as well as falling crude oil prices, which declined 7% to end the month at $115.45 a barrel. On August 27, the US Commerce Department revised its second-quarter GDP figure up to an annualized growth rate of 3.3% from 1.9% due to increased consumer spending and higher exports. As a result, the Dow, S&P 500 and NASDAQ ended the month in positive territory, climbing 1.5%, 1.2% and 1.8%, respectively. However, economic growth was primarily supported by government stimulus checks and a low US dollar. Year to date, the Dow is down 13.0%, the S&P 500 has dropped 12.6% and NASDAQ has lost 10.7%. Following strong gains in July, only two of the four IBO Stock Indexes managed to sustain positive momentum. The Laboratory Instrumentation and Process/Metrology/Motion Instrumentation Stock Indexes improved 0.7% and 5.3%, respectively, while the Lab Consumables/Equipment and Diversified Instrumentation Stock Indexes declined 0.8% and 0.3%, respectively. Laboratory Instrumentation Stock Index For the month, the Laboratory Instrumentation Index gained 0.7% to close at 643.46. Fifteen companies improved, while eight companies declined. CombiMatrix led the Index, improving 28%, while Caliper Life Sciences declined 25%. Year to date, the Index has fallen 2.0%, with 12 companies improving, 10 companies declining and one company trading flat. Sequenom continues to lead the Index for the year, up 138%, while X-Rite has lost 65%. Several companies in the Index reported positive earnings this month. On August 5, MOCON reported second-quarter EPS growth of 12.5% to $0.18, leading shares up 7.4%. On the same day, Bio-Rad Laboratories announced that its adjusted second-quarter EPS grew 66% to $1.58 (see page 12), $0.50 better than analysts’ consensus. Shares climbed 12.2% the following day. After the market’s close on August 7, Luminex reported an adjusted second-quarter loss of $0.03 a share, in-line with expectations. Shares climbed 4.9% the following day. Other companies that reported earnings experienced mixed results. After the close on August 7, Dionex reported adjusted fourth-quarter EPS growth of 24.6% to $0.76 (see page 12), beating analysts’ estimates by $0.06. However, the company forecasted first-quarter EPS of $0.53-$0.56, well below analysts’ expectations of $0.65 a share. The following day, shares declined 7.4%. On August 11, OI Corporation reported second-quarter EPS of $0.07 (see page 12), compared to $0.10 in the previous year, sending shares down 5.5%. After the close on August 11, Harvard Bioscience reported adjusted second-quarter EPS of $0.08, in-line with expectations, and maintained its 2008 EPS guidance, yet shares declined 3.0% the following day. On August 6, Caliper Life Sciences reported an adjusted second-quarter loss of $0.07 a share, $0.04 below analysts’ consensus, but maintained its full-year EPS estimate. Shares traded marginally higher. After the market close on August 13, CombiMatrix reported a second-quarter loss of $0.54, $0.01 wider than the previous year. However, shares improved 2.2% the following day due to strong revenue growth. On the previous day, the company filed a $100 million common stock shelf offer, sending shares up 4.4%. Weisel downgraded Luminex to “Market-weight” from “Overweight” on August 18, leading shares down 1.6%. On August 27, Caris & Company initiated coverage of Sequenom to “Below Average,” sending shares down 3.7%. In other news, Illumina announced a public offering on August 13 of 3.5 million shares. Shares declined 4.3%. The offering, which increased to 4 million shares, closed on August 13 at a price of $87.50. Process/Metrology/Motion Instrumentation Stock Index For August, the Process/Metrology/Motion Instrumentation Stock Index jumped 5.3% to 379.52, with half the companies improving. RAE Systems led the Index, climbing 69%, while Nanometrics and Strategic Diagnostics each fell 17%. Year to date, the Index is down 4.1%, with Nanometrics leading all decliners, down 63%, and only FEI Company and Veeco Instruments trading higher, up 9% and 1%, respectively. On August 12, ICx Technologies reported a second-quarter loss of $0.26, $0.03 better than analysts’ expectations. The firm also reaffirmed its 2008 guidance (see page 6), leading share up 7.6% the following day. On August 14, Zygo announced adjusted fiscal fourth-quarter EPS of $0.06, in-line with expectations, yet shares fell 3.6% the following day. On August 29, RAE reported a second-quarter EPS loss of $0.01 compared to a loss of $0.05, yet shares traded flat. In other news, on August 11, Veeco Instruments settled a patent suit against Asylum Research (see IBO 8/15/08), sending shares up 4.8%. Lab Consumables/Equipment Stock Index The Laboratory Consumables/Equipment Stock Index declined 0.8% to 511.67, with four companies improving and three companies trading lower. Kewaunee Scientific improved the most, climbing 26%, while Sigma-Aldrich fell 7%. For the year, the Index is up 1.3%, with five companies in positive territory and two companies trading lower. Techne leads the Index, having gained 17%, while Kewaunee Scientific is down 28%. After the market close on August 4, QIAGEN reported adjusted second-quarter earnings growth of 25% to $0.20 a share (see page 12), $0.01 ahead of analysts’ expectations. The company also increased its 2008 EPS outlook to $0.79–$0.80 from $0.74–$0.78, leading shares up 7.5% the following day. On August 5, Techne announced adjusted fiscal fourth-quarter EPS of $0.70, $0.03 ahead of analysts’ consensus, sending shares up 1.7%. After the close on August 26, Kewaunee Scientific reported EPS growth of 42% to $0.38, sending shares up 14.9% the following day. Diversified Instrumentation Stock Index The Diversified Instrumentation Stock Index slipped 0.3% in August to 113.36, with four companies declining and only Danaher and AMETEK trading higher, up 2% and 1%, respectively. Agilent Technologies declined the most, falling 4%. For the year, the Index is down 5.1%, with four companies trading lower and two companies advancing. Teledyne Technologies leads the Index, up 17%, while Mettler-Toledo is down 8%. After the close on August 14, Agilent Technologies announced adjusted third-quarter EPS growth of 30% to $0.53, $0.03 better than analysts’ expectations. The company also maintained its fourth-quarter EPS guidance of $0.58–$0.62. Shares traded relatively flat. International In August, four Pacific Region companies traded lower, while Shimadzu improved 4%. JEOL led all decliners, falling 11%. For the year, four companies are down, led by Horiba, which has fallen 47%, while Shimadzu has gained 3%. On August 7, Shimadzu reported second-quarter results (see page 12). Shares climbed 7.9% the following day. On August 14, Techcomp announced first-half results (see page 12), sending shares down 21.4%. On August 25, Horiba reported first-half earnings, leading shares down 1.8%. This month, nine European companies improved and five companies declined. Millbrook Scientific Instruments led all companies, climbing 55%, while Exiqon fell 8%. For the year, five European companies have positive returns, while nine firms remain in negative territory. Renishaw leads the way, up 34%, while Cybio has fallen 60%. On August 4, Analytik Jena reported fiscal third-quarter results, which sent shares up 2.5%. On August 7, Genetix reported six-month results, sending shares up 3.8%. On August 8, Biohit reported its second-quarter results and shares rose 7.5%. Tecan’s six-month report on August 13 lead shares down 0.6%. On August 22, Spectris reported results for the first half of the year. Results shares slipped 0.8%. Chart: IBO Instrument Industry Stock Index Lab Instrument Stock Index S&P 500 Aug-06 474.86 312.96 Sep-06 487.70 320.28 Oct-06 530.09 330.37 Nov-06 535.19 335.81 Dec-06 539.64 340.05 Jan-07 564.40 344.83 Feb-07 537.67 337.29 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