15:30 ET Dow +8, Nasdaq +28, S&P +3.85: [BRIEFING.COM] After an initial spike up, then down, the major indices have slowly
crept to their highs for the day as the text of the Fed announcement is digested. Techs have traded strongly since the announcement,
especially storage stocks. Seeing surges in EMLX, MCDT, QLGC as three storage companies report after the bell: BRCD, NTAP,
QLGC...Chips and chip equipment stocks also seeing a nice bounce as lower rates provide an incentive for companies to loosen the IT
purse strings...Outside of tech, homebuilders, auto components and tobacco posting some nice gains. NYSE Adv/Dec 1879/1176...
Nasdaq Adv/Dec 2182/1619.
15:00 ET Dow +25, Nasdaq +36, S&P +6.51: [BRIEFING.COM] Prior to the Fed's decision, the Dow was -54 and the Nasdaq +8...
Following the Fed's decision, the major indices are posting gains after an initial whipsaw response...So a 50 bp ease with no change in bias,
why isn't the market rallying, especially considering an increasing number of people thought a shift in bias would occur? Briefing.com believes
it's because there was nothing in the announcement that indicated the Fed sees a turn in the economy. There were plenty of comments that
indicate the Fed will be cutting rates again, but no positive economic comments.....The Fed's next meeting concludes on June 27, at which
another rate cut is a good bet given our view that the consumer will be the next leg down for the economy. It's important to note that the Fed
did not say that they are likely to cut rates again -- they never say that. Policy makers only indicated that the balance of risks lies on the side
of excessive economic weakness, not inflation...The Fed's economic view stands in contrast to the market's. They clearly put little weight on
recent consumer data, and appear to believe (as Briefing.com does) that the consumer will be dragging into the mire of falling corporate
profitability. They also put little weight on arguments that inflation is a risk or that long-term productivity growth is faltering -- these are bullish
indications for future rate cuts...What they do next is dependent entirely on the economic data from now until Jun 27. NYSE Adv/Dec
1840/1198... Nasdaq Adv/Dec 2125/1630.
14:30 ET Dow -38, Nasdaq +11, S&P -0.68: [BRIEFING.COM] The initial reaction to the Fed's 50bp cut was about +40 pts on the
Dow and +20 pts on the Nasdaq. However, the indices had traded slightly lower heading into the release. But over the next few minutes the
indices traded right back down to about where they were before the release, a whipsaw reaction...Specific comments from the release
-- The Fed made a number of comments making it likely more rate cuts are on the way. In fact, the text of the announcement is reminiscent
of a month ago with a focus on declining business investment spending given profit declines and the implications from reductions in equity
wealth. Slower growth abroad is also expected to weigh on the economy. Inflation concerns remain a second player given the growth
concerns. The vote on the discount rate cut was unanimous. "The Committee continues to believe that against the background of its long-run
goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward
conditions that may generate economic weakness in the foreseeable future." NYSE Adv/Dec 1749/1257... Nasdaq Adv/Dec 2000/1732.
14:15 ET Dow +4, Nasdaq +23, S&P +3.17: [BRIEFING.COM] As expected, the Fed has elected to cut the fed funds rate by 50bp
and maintain an easing bias. Comments indicate that additional rate cuts are likely...The initial reaction has market up sharply... More analysis
to follow shortly. NYSE Adv/Dec 1794/1199... Nasdaq Adv/Dec 2034/1676.
14:05 ET Dow -41, Nasdaq +11, S&P -1.29: [BRIEFING.COM] Seeing little action ahead of the Fed decision in 15 minutes...Techs
continue to be mixed with networkers and software stocks doing well generally. However, Ciena (CIEN 56.65 -3.30) has been unable to
recover from negative analyst comments heading into its release on Thursday. Brocade (BRCD 42.79 +2.70) is leading the storage group
higher heading into its release after the bell....Two giant retailers reported this morning in-line and $0.02 better than expected, respectively,
for WMT and HD. The former is the worst performing Dow stock while the latter is the Dow leader. The broadline retailers are following
WMT's lead as the group is very weak today. Kmart (KM -5%) and Target (TGT -4%) are among the weakest. The specialty retailers are
performing better...Oil stocks, which were the leaders this morning, have come under moderate pressure, but still in positive territory ahead
of President Bush's energy policy to be released this week. NYSE Adv/Dec 1718/1270... Nasdaq Adv/Dec 1984/1713.
13:30 ET Dow -27, Nasdaq +14, S&P +0.01: [BRIEFING.COM] We are now under the hour mark for the Fed decision. Remember
that the amount of the rate cut (Briefing.com expects 50 bp) is only half the story. Just as important, and perhaps more, will be the comments
made by the Fed. A shift to a neutral bias would send shivers through the market, even with a 50 bp ease. We believe there is ample
evidence in the economic data that additional rate cuts are warranted....All day, and for the last two session for that matter, the market has
been in hibernation awaiting the Fed's decision. The indices continue to hug the flat line on low volume....Of note, Cisco (CSCO +4%)
moving higher; Briefing.com hearing from CIBC World Markets that the company priced new employee options last night, but is consistent
with what Cisco indicated on its recent conference call and should not come as a surprise. Many nevertheless see this as a positive
development as it might indicate that Cisco management sees a bottom ahead. NYSE Adv/Dec 1718/1244... Nasdaq Adv/Dec 1979/1664.
13:10 ET Dow -26, Nasdaq +17, S&P +0.19: [BRIEFING.COM] The indices continue to trade sideways ahead of the Fed decision at
2:15 ET. Techs are generally higher, especially networkers and software. Cisco (CSCO +5%) trading strongly over last few minutes. Other
strong performers include B2B players Ariba (ARBA +8%) and Commerce One (CMRC+6%). Seeing strong movement in comm IC
stocks such as RFMD, AMCC, TQNT....Computer Sci (CSC) remains under pressure warning for fiscal Q1, but has rebounded off its low.
EMS space strong thanks to Celestica (CLS) reiterating guidance at CIBC Conference..Seeing rally in Xbox plays ahead of imminent Xbox
release; names include ERTS, THQI, ATVI, NVDA. However, Comverse Tech (CMVT) selling off as trading floor sources say it's due to
an article on an Israeli site which reports that Comverse has already laid off 450 employees in Israel alone despite announcing recently that it
only planned to lay off 200 in Israel and 200 elsewhere. NYSE Adv/Dec 1711/1249... Nasdaq Adv/Dec 1986/1623.
12:30 ET Dow -17, Nasdaq +10, S&P -0.12: [BRIEFING.COM] Nasdaq and Dow now trading sideways heading into Fed decision at
2:15 ET. Techs are mixed while some cyclical sectors are posting strong gains, particularly oil stocks ahead of President Bush's energy plan
to be unveiled Thursday. Stocks worth watching heading into their earnings releases after the bell today: ANF, AMAT, BEAS, BRCD,
NTAP, QLGC, SCMR....Goldman Sachs making upbeat comments on BEA Systems (BEAS 34.32 +1.33). Firm thinks BEAS could
report upside to license number and would be surprised if company lowers guidance in business areas other than service; also, solid quarter
creates risk of short-squeeze developing. NYSE Adv/Dec 1679/1240... Nasdaq Adv/Dec 1932/1587.
12:00 ET Dow -25, Nasdaq +8, S&P -0.91: [BRIEFING.COM] Fed. Fed. Fed. Market trading on light volume yet again today ahead of
the Fed's decision on interest rates this afternoon Briefing.com continues to expect a 50 bp ease. However, just as important will be the
Fed's statement on what it expects to do going forward. Even with a 50bp easing, a shift in bias to neutral would be viewed very negatively
by the market. On the day of the last eight FOMC meetings, when a policy announcement was made, the cash market traded with a
generally positive bias leading up to the announcement, but today has been mixed at best....Techs have been mixed today as networkers,
chips and chip equipment stocks are moderately higher. PC stocks have had little reaction to Merrill Lynch reducing its PC unit growth
forecast this year but an increase to next year. DELL continues to be firm's top pick. Also among techs, Ciena (CIEN 57.02 -2.93) is under
pressure on analyst concerns heading into its earnings release this weak...Most impressive move today from Qualcomm (QCOM 60.65
+3.73), both on NXTL's decision to switch to CDMA and China Unicom's (CHU 14.89 +0.19) telecom equipment deal which shows
China is serious about bulking up its network....Outside of tech, oil stocks are clearly leading to the upside ahead of President Bush's energy
plan to be unveiled on Thursday...Banks, tobacco, and paper also doing well while food and retail stocks are under pressure. NYSE
Adv/Dec 1623/1248... Nasdaq Adv/Dec 1899/1549.
11:30 ET Dow -20, Nasdaq +16, S&P +0.97: [BRIEFING.COM] Indices continue to trade near the flat line ahead of the Fed meeting
this afternoon. Oil stocks continue to lead on the upside while techs are generally mixed and select cyclicals are on the downside, such as
machinery and airlines...Leading the fiber optic space is Sycamore Ntwks (SCMR 10 +0.61) on mixed comments from Morgan Stanley
ahead of its earnings report this evening. Firm said sales to key customers continues to be soft and there could be downside risk to firm's
JulQ estimates due to continued weakness from WCG...Recently maligned B2B stocks leading the software group today: ARBA +8%,
CMRC +7%....Hitting new 52-wk highs today: Applebee's (APPB 43.86 +0.56), Caterpillar (CAT 51.91 -0.91), General Dynamics (GD
79.39 +0.72), Lowe's (LOW 65.60 +0.80). NYSE Adv/Dec 1594/1213... Nasdaq Adv/Dec 1886/1499.
11:10 ET Dow -22, Nasdaq +13, S&P +0.35: [BRIEFING.COM] The indices have weakened since the last comment, especially on the
Dow. Despite reporting in-line results, Wal-Mart (WMT 52.98 -1.37) is the percentage loser on the Dow. Merck (MRK 75 -1.69) and
Hewlett-Packard (HWP 25.41 -0.49) are not far behind. Techs and retail stocks have weakened over the past 20 minutes. Machinery
stocks remain weak on Deere's (DE 38.06 -2.95) earnings report which came in 12 cents below consensus. Also, company
expects operating margins to be under significant pressure during Q3 and remain below year-ago levels in the 2nd-half....PDAs are weak
today as Prudential initiates coverage of HAND and PALM with HOLD rating...On the bright side, apparel retailer Pacific Sunwear (PSUN
23.30 +2.80) is up 14% on a Merrill Lynch upgrade after PSUN reported a penny above consensus. NYSE Adv/Dec 1548/1201...
Nasdaq Adv/Dec 1864/1402.
10:35 ET Dow -7, Nasdaq +23, S&P +2.43: [BRIEFING.COM] While the Nasdaq has rebounded modestly since falling in the first few
minutes of trading, the Dow has been all over the board. Overall, conviction is lacking as traders prefer to wait until the Fed makes its
decision this afternoon....Chip stocks have led the Nasdaq higher with RFMD +6% and SSTI +5% leading the percentage gainers... Despite
oil prices being up only slightly, oil services, integrated oil and oil exploration stocks are up strongly....Telecom equipment stocks are
generally higher on China Unicom's (CHU 14.90 +0.20) awarding of $1.5 bln worth in telecom equipment contracts to LU, MOT, NT,
ERICY and six others. Lucent (LU 10.08 +0.37) indicated that its agreement was the largest of the deals. Qualcomm (QCOM 61.07
+4.15) trading up as the CHU deal indicates China's willingness to upgrade its telecom infrastructure....Machinery, food and department
stores remain under pressure. SOX +1.1%... NYSE Adv/Dec 1490/1121... Nasdaq Adv/Dec 1771/1296.
10:00 ET Dow -7, Nasdaq +9, S&P +0.77: [BRIEFING.COM] Early strength being driven by a strong performance from the biotech,
retail and oil services stocks. Banks have turned around from a weak opening as all the major banks are in positive territory despite cautious
comments from Morgan Stanley. Firm believes the group is trading at the high end of its fair value range and notes credit quality and capital
market concerns. Separately, JP Morgan initiating coverage on three banks: BK, NTRS and STT, all with Buy ratings... While the
networkers are generally positive, Ciena (CIEN 57.93 -2.02) is weak on cautious comments going into Thursday's earnings report. While
firm expects CIEN to exceed sales estimates, firm concerned that management will convey a more cautious tone than in recent qtrs....CLECs
are weak in the early going in sympathy with Motorola's (MOT 15.16 -0.58) announcement that Turkish customer Telsim missed a $728
mln loan payment due April 30. NYSE Adv/Dec 1268/1138... Nasdaq Adv/Dec 1467/1316. |
