The final trading day in February ended with a sharp decline across major US and international stock indexes. The Dow Jones Industrial Average, S&P 500 and NASDAQ declined 2.5%, 2.7% and 2.6%, respectively, while the Asia-Pacific and European equity markets ended broadly lower. The continued negative US economic data, including inflationary pressure, rising oil prices, a devaluating US dollar, disappointing corporate earnings, slowing GPD growth, flat consumer spending, and distressed financial sector and housing markets has all but convinced investors that the economy is currently in a recession. In spite of the overall bearish market environment, several analysts believe the markets may be at or close to a bottom, suggesting that many companies are trading at fair valuations. For February, the Dow, S&P 500 and NASDAQ finished lower, falling 3.0%, 3.5% and 5.0%, respectively. Year to date, the Dow is down 7.5%, the S&P 500 has lost 9.4% and NASDAQ has dropped 14.4%. Two of the IBO Stock Indexes eluded the market downturn to finish the month higher, while the Process/Metrology/Motion Instrumentation and Diversified Instrumentation Stock Indexes reflected the general market direction, ending the month down 6.0% and 4.0%, respectively. The Laboratory Instrumentation and Lab Consumables/Equipment Stock Indexes gained 4.2% and 5.2%, respectively. Laboratory Instrumentation Stock Index For the month, the Laboratory Instrumentation Index grew 4.2% to close at 648.03. Thirteen companies improved, nine companies declined and PerkinElmer traded flat. Bruker Biosciences led the Index, jumping 33%, while X-Rite and Sequenom both declined 16%. For the year, the Index has lost 7.4%, with 16 companies trading lower and seven companies improving. Harvard Bioscience leads the Index, up 22%, while X-Rite has declined 30%. In the current market environment only companies with positive earning reports and forecasts are being rewarded. On February 1, following the company’s strong earnings report, Dionex increased its 2008 EPS guidance by $0.10–$0.07 to $2.63–$2.69, sending shares up 10.9%. On February 6, Thermo Fisher Scientific reported adjusted fourth-quarter EPS of $0.76, $0.07 ahead of expectations, and boosted full-year adjusted EPS guidance to $3.05–$3.15, exceeding market estimates of $3.03 a share, sending shares up 7.6%. On February 8, Beckman Coulter announced adjusted fourth-quarter EPS of $1.08, $0.05 better than analysts’ expectations, and provided adjusted EPS guidance of $3.50–$3.65, inline with expectations, sending shares up 2.5% After the market close on February 28, both Bio-Rad Laboratories and Bruker reported better than expected fourth-quarter EPS (see page 12). Bio-Rad reported EPS of $0.97 beating estimates by $0.17, leading shares 6.0% higher, while Bruker surpassed EPS estimates by $0.02 to $0.13, sending shares up 6.2%. On February 5, Illumina announced adjusted fourth-quarter EPS of $0.28, $0.03 above analysts’ expectations, and guided first quarter adjusted EPS of $0.33–$036, well beyond analysts‘ expectations of $0.26. On February 7, Luminex reported fourth-quarter EPS of $0.30, including a one-time legal settlement of $11.5 million, but did not provide an adjusted result. On February 21, Sequenom missed fourth-quarter earnings by $0.03, reporting a loss of $0.16 a share due to increase stock based-compensation charges (see page 12), but provided strong revenue guidance for 2008 of 30%–37% growth. On February 1, Wedbush Morgan upgraded Dionex to “Buy” from “Hold.” On February 5, Canaccord Adams upgraded Illumina to “Buy” from “Hold.” Process/Metrology/Motion Instrumentation Stock Index In February, the Process/Metrology/Motion Instrumentation Stock Index fell 6.0% to 319.39, with only three companies improving and five companies loosing ground. Both Strategic Diagnostics and Veeco Instruments improved the most, gaining 9%, while ICx Technologies was down 16%. Year to date, the Index has fallen 19.3%, with Nanometrics leading all decliners and only Zygo in positive territory, up 2%. After the market close on February 12, Veeco reported fourth-quarter adjusted EPS of $0.07, $0.02 ahead of analysts’ expectations, leading shares up 17.6%. The company expects adjusted first-quarter EPS of $0.00–$0.06. On the same day, AmTech Research upgraded Veeco to “Buy” from “Neutral.” On February 4, FEI announced adjusted EPS of $0.40 (see page 12), $0.14 better than analysts’ expectations, gaining due to a one-time tax benefit. The company guided first-quarter adjusted EPS down to $0.18–$0.25, well below the market’s expectations of $0.30, sending shares down 2.7%. Lab Consumables/Equipment Stock Index The Laboratory Consumables/Equipment Stock Index improved 5.2% in February to 495.30, with five companies improving and two companies declining. Sigma-Aldrich led the Index, climbing 11%, while Invitrogen slipped 1%. For the year, the Index is down 2%, with Techne and QIAGEN leading share price growth, both up 4%, while Invitrogen and Kewaunee Scientific are each down 10%. On February 1, the S&P’s Rating Services removed Pall’s credit rating from CrediWatch and affirmed its “BBB” corporate credit rating, leading shares up 3.0%. After the market close on February 5, Invitrogen announced adjusted fourth-quarter EPS of $1.05, $0.06 ahead of analysts’ expectations, and reported the settlement of several patent disputes (see IBO 2/15/08). The following day, Deutsche Securities upgraded Invitrogen to “Buy” from “Hold,” helping shares close up 6.4%. After the market close on February 11, QIAGEN NV reported adjusted EPS of $0.16, $0.02 better than market expectations, and forecasted adjusted 2008 EPS of $0.76–$0.80, leading shares up 2.2% the following day. On February 1, following the company’s earnings report, Millipore provided adjusted 2008 EPS guidance of $3.58–$3.63, which was below analysts’ expectations of $3.88 a share, sending shares down 7.9%. However, shares rebounded 4.0% on February 25, following FDA approval for Genentech’s Avastin, which is expected to benefit Millipore’s bioprocess unit. Diversified Instrumentation Stock Index The Diversified Instrumentation Stock Index declined 4.0% for the month to 101.57, with five companies trading lower and Roper Industries up 1%. Teledyne Technologies led all decliners, falling 14%. For the year, the Index is down 15%, with all companies in negative territory. After the market close on February 13, Agilent Technologies reported adjusted first-quarter EPS of $0.42, which was $0.06 better than analysts’ expectations, and forecasted second-quarter adjusted EPS of $0.46–$0.50, $0.03 below the average analyst’s estimate, leading shares down 2.8%. On February 7, Deutsche Bank upgraded Danaher from “Buy” to “Hold.” On February 20, Stifel Nicolaus initiated coverage of Teledyne Technologies with a “Buy” recommendation. On February 25, Sterne Agee downgraded Roper Industries to “Sell” from “Hold.” International In February, four Pacific Region companies traded higher, while JEOL declined 11%. Horiba was the only company to report a double-digit gain, climbing 13%. For the year, all five companies are trading lower. This month, 11 European companies improved and four companies declined. Analytik Jena AG and Biotage AB led all companies, both climbing 18%, while Cybio AG declined 30%. For the year, nine European companies show positive returns, while six firms are in negative territory. Whatman leads the way, up 39%, while Cybio AG has fallen 41%. On February 14, Analytik Jena reported fiscal first-quarter EPS of €0.27 ($0.39) compared to €0.16 ($0.21) last year, leading shares up 6.2%. On February 7, Biotage AB announced fourth-quarter EPS of 0.48 SEK ($0.07) compared to 0.12 SEK ($0.02) in the previous year, yet shares slipped 2.6%. On February 22, Spectris reported full-year EPS of £0.71 ($1.42) compare to £0.49 ($0.91) in the previous year (see page 12) and increased its dividend by 20% to £0.21 ($0.42), sending shares up 6.9%. On February 26, Techcomp reported full-year EPS of $0.04 compared to $0.03 last year (see page 12) and announced its first dividend of 0.12 SGD ($.09).