09:15 ET: [BRIEFING.COM] Still looking for a gap down on this morning's open. S&P futures at 1253, trade 12 points under fair value
while Nasdaq 100 futures at 1900, trade 38 points below fair value and lock limit down. While CSCO's results will disproportionately
impact early market action, life goes on in other pockets of the market. Bank One (ONE 37.46) has been downgraded by Bernstein to
Market Perform from Outperform on expectations of higher credit card losses related to bankruptcies and rising unemployment. Worries of
this nature are beginning to surface more frequently following the unusually weak April employment data. Separately, Applied Materials
(AMAT 52.60) is getting a haircut courtesy of Morgan Stanley this morning. The firm is lowering estimates ahead of the company's May 15
earnings report.
08:45 ET: [BRIEFING.COM] Looks like a decidedly negative bias in pre-market activity this morning. S&P futures at 1253, trade 12
points under fair value while Nasdaq 100 futures at 1900, trade 38 points below fair value and lock limit down. Cisco Systems (CSCO
20.38) reported its third quarter numbers yesterday and beat previously lowered expectations. Guidance is what the markets were watching
and CSCO said it sees a bottom in business still one to two quarters away. Nonetheless, this is an improvement over prior statements that
the bottom wouldn't be seen for "at least three quarters". So on paper CSCO beat its number and tightened its guidance but the reality is it's
clear CSCO continues to operate in a difficult environment. The question at this point is whether today represents a simple "sell the
news" mentality or whether a meaningful shift in sentiment is likely to occur. Briefing.com favors the former. Separately, National
Semiconductor (NSM 25.00) warned for its current quarter last night. The company said a loss for the quarter is possible and sees a
resumption in normal order levels one to two quarters away. Again, NSM's warning is not anything unusual from the standpoint of the
sector, it's just a matter of how the markets react to the reality of these reports.
07:55 ET: [BRIEFING.COM] S&P futures -6.8, or 8.8 pts below fair value; Nasdaq 100 futures lock-limit -42. Have seen further
erosion in the futures in the past half hour; market continues to put an increasingly negative spin on Cisco report - CSCO now 19.32 from
roughly 19.70 last night.
07:20 ET: [BRIEFING.COM] This morning's fair value figures -- S&P 500 fair value: 1265; closed 2 pts below fair value. Nasdaq 100 fair
value: 1938; closed 5 pts above fair value. Current indications: S&P 500 futures are -6, or 8 pts below fair value. Nasdaq 100 is -40, or 35
pts below fair value... While Cisco came in a penny above lowered guidance, US and European investors disappointed that company does
not seem to be seeing a meaningful pick up in business.
06:13 ET: [BRIEFING.COM] S&P futures trading at 1255, 10.0 points below fair value, Nasdaq 100 futures trading at 1900.50, 37.5
points below fair value. The 30-year bond is up 11 ticks at 5.710%. The dollar is firmer against both the yen and the euro.
06:12 ET: FTSE -0.85%, DAX -1.31%: [BRIEFING.COM] European stocks lower as technology and telecom take another earnings
hit. Selling fueled by Cisco expectations for another decline in sales this quarter. Cisco also noted that European sales have dropped sharply.
Phone equipment makers such as Marconi, Alcatel and Ericsson all underperforming on the back of Cisco. Chipmakers also under pressure
following National Semiconductor’s announcement yesterday that fourth quarter sales will come in below expectations.
06:11 ET Nikkei -1.43%, Hang Seng +0.33%: [BRIEFING.COM] Asian stocks mostly lower with technology shares hit by Cisco.
Japan led the way lower as profit-taking helped to drag the Nikkei down 1.43%. NTT DoCoMo saw another round of better selling ahead
of its after-close earnings release. Korea's Kospi closed 2% lower on reports of heavy program selling. Local selling of telecom and
semiconductor shares also a negative. Singapore's Straits Times Index lost 0.8%, falling for the fourth consecutive session as semiconductor
stocks underperformed following the warning yesterday from National Semiconductor. |
