From Briefing.com: Investors found little inspiration in the day's troika of economic data, which all came in below consensus. First, the Chicago PMI (December) checked in at 59.2 vs. consensus at 62.0. Consumer Confidence (December) came in at 91.3 vs. consensus at 92.5. Lastly, Existing Home Sales (November) declined to 6.06MM units vs. consenus at 6.33MM.
Investors responded to the economic data, which point to a moderating of growth, an easing of inflationary pressures and a lowering of the probability that the Fed will hike rates anytime soon, by seeking out faster growing tech shares even as they took profit in large cap tech following Monday's gains. At session's end, the Philadelphia Semiconductor Index (SOXX 509.81 -0.67) had eased 0.13% while the Briefing.com Tech Index (BTI) closed up 0.5%, and the Nasdaq Composite (IXIC 2009.88 +3.40) edged up a modest 0.17%. Among SOXX companies, decliners outnumbered advancers 1.6:1, with decliners shedding 1.0% and advancers tacking on 0.7%. This contrast against BTI companies, where advancers led decliners 1.1:1 with advancers gaining 2.9% and decliners losing 2.0%.
As previously noted on the Tech Stocks page, investors have little impetus to buy or sell tech given the generally high market valuations accorded tech shares. With no earnings reports scheduled until the first full week in January (01/05) (See the Earnings Calendar for scheduled earnings releases.), trading is likely to remain thin and volatile into the new year. We would take advantage of the volatility to buy into quality, attractively priced names / sell richly priced shares into strength as part of a rebalancing of the tech portion of the portfolio to a neutral market weight even though we remain moderately bullish on technology shares over the long-term. Please visit the Story Stocks page for the latest thinking on investment opportunities across market sectors, including tech.--Ping Yu, Briefing.com
Group % Change Avg % Change Advancers Avg % Change Decliners Ratio Advancers to Decliners *P/SG Ratio: Advancers *P/SG Ratio: Decliners
Philadelphia Semiconductor Index -0.1% 0.7% -1.0% 0.6:1 5.0 3.7
Briefing.com Tech Index(based on a composite of over 1000 tech companies) +0.5% 2.9% -2.0% 1.1:1 1.7 1.7
Audio & Video Equipment +0.3% 1.5% -1.5% 1.7:1 0.3 0.7
Communications Equipment +0.2% 2.4% -1.7% 0.9:1 1.6 2.0
Communications Services +0.7% 2.5% -1.9% 1.5:1 1.1 1.0
Computer Services +0.4% 3.2% -2.0% 0.8:1 1.8 1.8
Computer Sys & Peripherals +0.3% 2.5% -2.2% 1.1:1 1.3 1.4
Electronic Instruments & Controls +1.1% 4.1% -2.5% 1.3:1 1.4 1.1
Scientific & Technical Instruments +0.7% 2.2% -2.0% 1.9:1 1.2 1.5
Semiconductors +0.4% 2.3% -1.6% 1.1:1 2.6 2.7
Software & Programming +0.3% 2.7% -2.0% 1.0:1 1.8 1.6
*P/SG Ratio: (Price / Sales) / Sales Growth.
5:43PM Tuesday After Hours prices levels vs. 4 pm ET: Like the regular session, the after hours trade has been relatively flat and uneventful. The limited amount of corporate announcements has no doubt contributed to the extended session's ennui, and curbed trading activity tonight. Presently, the S&P futures and Nasdaq futures alike are flat with fair value, which is 1108 and 1473, respectively.
The following table covers the companies out with news, and the impact the event has had on their stocks:
After Hours Mover % Change Move Reason for Significance
Merck (MRK) unch Dow component submitted a New Drug Application (NDA) for Arcoxia, a treatment for arthritis/pains; Drug should maintain a place for the embattled drug company - which has seen 4 late-stage drugs fail this year - in the growing COX-2 market
Murphy Oil (MUR) -0.4% Oil and gas operations company warns for Q4 (Dec), says EPS should be $0.55-0.60 versus the Reuters Research consensus estimate of $0.67; Look for other exploration and production (E&P) stocks to be weak tomorrow
Spectranetics (00C0) +2% Medical equipment company announced it will make a one-time payment of $200,000 to the Special Receiver for Interlase Limited Partnership as part of a royalty dispute litigation settlement; Float on SPNC is 22.2 mln shares
Viisage Tech (VISG) -1% Provider of identification verification services adopted new accounting rule EITF 00-21, and withdrew prior FY03 guidance for lower revenue range; No analyst estimates are available for this company
Xerox (XRX) -1% Document equipment company filed a $2.5 bln mixed shelf offering for 'general corporate purposes' according to management
Tomorrow' s market features no earnings reports of note, and only one economic report: Jobless Claims for the week of December 27. The market expects the figure to decline for a third week in a row, by 3K this time, to 350K.
For complete coverage on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap pages. -- Heather Smith, Briefing.com
Rambus (RMBS) 29.77 +3.27 : American Technology Research provided some more color on RMBS's stock movement today (+13.1%) following reports that Micron may settle with the Dept of Justice (6:12). Firm notes that during RMBS's summer trial with the FTC, evidence emerged that MU may have colluded with other DRAM manufacturers to low-ball the price of SDRAM vs RDRAM (and thereby lowering the chances that Rambus's RDRAM would be accepted by the mkt). Today, RMBS is trading up on speculation that if MU settles with the DoJ, then this strengthens RMBS's case with the FTC (which is seeking to deny RMBS the billions of dollars in royalties it could reap from chipmakers such as MU and Hynix). While firm has no specific information on this, they think this line of reasoning is at least logical.
ChipPAC (CHPC) 7.74 +0.14 : WR Hambrecht initiated coverage of ChipPAC with a Buy rating and $9.50 target; firm believes the IC volume recovery in the industry remains intact, and business fundamentals at ChipPAC are improving; also, firm maintains a positive outlook for the co based on: 1) its dominance in the SiP packaging that focuses on cell phone mkt, 2) greater than 50% of revs come from advanced technologies such as CSP/BGA and flip chip, and 3) the Korea, China, and Malaysia assembly factories' ability to attract customers based on product and geographical preferences.
FormFactor (FORM) 19.75 +0.62 : Lehman believes that recent weakness in FormFactor shares has most likely been due to pressure in the overall semiconductor group, and lockup expiration. Firm thinks the decline has created a buying opportunity. Firm rates stock an Overweight and has a $24 price tgt.
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