12:30 ET Siebel Systems (SEBL) 45.63 +2.92 (+6.8%): -- Technical -- A leader in the latest wave of buying but is thus far having minor
difficulty with a chart barrier near 46. Intraday support is at 45/44 but it will take losses all the way back through 42 to inflict any damage to
the short term bull bias. Next resistance is at 47.50/48.50 in front of the recovery high at 49.50.
12:09 ET Nasdaq Composite : -- Technical -- Falls shy to retesting yesterday's Fed related high (2125) and begins to weaken. However,
the pattern of today's turnaround is encouraging which suggests looking to supports at 2098/2095 and 2088, it tested, for signs of a possible
rebound.
11:59 ET Acxiom (ACXM) 17.21 +2.61 (+17.9%): Merrill Lynch raises near-term rating to NEUTRAL from Accumulate; believes new
method for recognizing Abilitec revenue improves earnings quality, predictability, and cash flow; as a result, convinced that ultimately market
will pay a higher P/E multiple for the business; firm establishes 12-18 month target of $24.
11:53 ET Check Point Sftwr (CHKP) 50.67 -4.24 (-7.7%): -- Update -- Goldman Sachs out in defense of Rec. List rated stock
following Lehman downgrade and amid speculation of change in relationship with Nokia; does not think that competitor comment that
economy could limit upside is news, noting that company has said this itself; with respect to Nokia relationship, firm's sources telling it that
Nokia is not building a CHKP replacement... Goldman would be a buyer on additional weakness in the name.
11:38 ET Honeywell Intl (HON) 51.05 +0.74 (+1.5%): Reuters reports that the EU has informed General Electric (GE) of competitive
concerns related to company purchase of Honeywell, citing sources. The Commission is worried that GE/HON would bundle its products to
dominate aircraft engines and related markets.
11:34 ET Ariba (ARBA) 6.96 +0.62: -- Update -- Hearing from sources at Goldman Sachs that while the firm believes IBM is the most
legitimate partner for Ariba, the rumor that IBM will acquire Ariba (see 10:51 comment) is probably untrue.
11:14 ET Asia Global Crossing (AGCX) 6.83 +0.82 (+13.6%): Thinly traded Asia Global Crossing -- a joint venture between Global
Crossing, Softbank, and Microsoft -- also being viewed as a beneficiary of 360Networks (TSIX) financial woes. AGCX owns the majority
stake in Pacific Crossing-1, a company building a subsea cable connecting Japan and the US. AGCX has traded 183K shares this morning;
10:51 ET Ariba (ARBA) 6.98 +0.64: Stock running on a retread rumor that IBM (IBM) will make a bid for the company; may happen
someday, but rumors of such a deal will be a recurring theme given the IBM/ARBA partnership and frequent speculation that Ariba cannot
survive as an independent company.
10:48 ET Global Crossing (GX) 13.91 +1.05 (+8.2%): Problems at 360Networks (TSIX) being viewed as a positive for competitor
Global Crossing. After the close, TSIX announced that it would suspend work on its 360pacific and 360asia projects and will meet
customer demand in those regions over the short-term buy purchasing capacity. TSIX also indicated that it would need to raise additional
capital.
10:30 ET Avanex (AVNX) 14.39 -0.36 (-2.4%): -- Technical -- Highlighted yesterday as it struggled to breakout above trendline
resistance while simultaneously testing support at its 50 day ma (14.8 today). Broke the latter in late trade and extended slide this morning.
Without a sustained recovery back through this area it will remain vulnerable. Next supports are at 13.8/13.6 and 12.9.
10:18 ET Check Point Sftwr (CHKP) 50.95 -3.96 (-7.2%): -- Update -- Technical -- Runs to a solid chart barrier in the 50 area in early
trade and now attempting to bounce. While it has considerable work to do to improve the short term bias, it is oversold on both an intraday
and daily basis (no buy signals yet). Next resistance is at 54.70. Failure to build on the rally exposes congestion at 46 and 44.5.
10:11 ET Sector Watch: Metals : Resurgence in the metals stocks this morning, with move paced by the gold/silver mining names.
Gold/Silver Index (XAU) has rallied 4.7%. Stocks advancing in the group include Newmont Mining (NEM +8%), Anglo American PLC
(AAUK +7%), Glamis Gold (GLG +9%), Homestake Mining (HM +6%).
10:08 ET Nasdaq Composite : -- Technical -- Bounces off congestive support in the 2060 area mentioned in the Morning Movers story
but the best is has done thus far is fill the gap created off the open (2079). It has subsequently faltered and the inability to hold at the early
low leaves the door open to a secondary floor in the 2040 area. A breach of the early high faces a minor resistance at 2090 and then the
2100/2105 congestion zone.
09:53 ET Sirius Satellite (SIRI) 14.89 +1.09 (+7.9%): Early strength in subscription radio stocks Sirius and XM Satellite Radio (XMSR
15.18 +0.96, +7%) after SIRI disclosed in SEC filing that it is raising monthly pricing to $12.95 from $9.95.
09:49 ET Sector Watch: Semiconductor : The index (SOX at 605) has held up well near its the recent pullback low and 50 day simple
ma (595) with some buy side interest now developing in the sector leaders (NVLS, KLAC, AMAT). Also showing signs of life are LLTC
(+1.4%) and NSM (+0.9%).
09:44 ET Core Router Market : The latest report from consulting group Dell'Oro confirms that Cisco (CSCO 18.57 -0.17) continues to
lose ground to Juniper (JNPR 53.50 +0.35) in the core router market. Cisco's Q1 share fell to 59% from 65% while Juniper's rose to 38%
from 34% (AVCI rose to 2% from 1%). Though there had been recent talk of Cisco stabilizing its position, at least one rumor on this front -
that Cisco was winning business away from Juniper at Qwest (Q) - was apparently untrue; sources at CSFB said after a Juniper presentation
at their conference that Q was undecided on next-gen purchases and opting to upgrade JNPR routers with new cards for now.
09:41 ET Sector Watch : Broad based tech losses with networking, computer-hardware and Internet leading the way. Also in the red are
biotech, semiconductor, telecom, software, retail and banking. On the upside are gold, healthcare, drug, utility and oil.
09:37 ET Pharm Product (PPDI) 31.35 -0.29 (-0.9%): Company reaffirms guidance; announces that CEO Fred Eshelman has recently
sold approximately 790,000 shares of stock in a series of transactions; continues to hold a 5.15 mln stake in the company.
09:37 ET Krispy Kreme (KREM) 53.14 +3.74 (+7.5%): -- Update -- Gaps higher and establishes a new recovery high amid strong
volume in the wake of its earnings/guidance. Now eyeing its all time high at 54.25 (float 19 mln).
09:33 ET webMethods (WEBM) 21.86 -0.47 (-2.1%): Thomas Weisel Partners points out in pre-market research note that company's
most recent quarter was analyzed by CFRA; firm maintaining Buy rating, but notes that a CFRA review is usually a psychological negative.
In the report released yesterday, CFRA highlighted a surge in receivables and a slowdown in deferred revenue growth.
09:26 ET B of A Starts Foundries : Banc of America Sec initiates coverage of semiconductor foundries. Chartered Semi (CHRT),
Taiwan Semi (TSM), Tower Semi (TSEM) and United Microelectronics (UMC) all started with BUY ratings. Expect dedicated
semiconductor foundries to return to a long-term growth rate exceeding 26% as they emerge from the current cycle. The foundry sector is a
deep cyclical within technology since it is directly tied to wafer supply, as is typical in any cyclical business, the best buying opportunity is
always in the worst periods for fundamentals.
09:20 ET Gapping Down : TERN -12.5% (to write-down $575 mln of intangibles)... CHTR -10% (announces intent to sell $1.75 bln of
securities)... CHKP -9% (Lehman downgrade)...TQNT -9.5% (initial response to Sawtech acquisition is 'too expensive')... SCMR -9%
(customer TSIX slashes capex and warns of cash crunch)... AMCC -5% (impacted by Goldman downgrade of Comm ICs)... DELL
-2.5% (another firm cutting PC growth forecasts).
09:20 ET QLogic (QLGC) 42.51: -- Update -- Banc of America Sec upgrades to BUY from Mkt Performer, but cuts estimates: FY02
revenue estimate cut to $410.6 mln (down from $438.5 mln) and EPS cut to $1.05 (down from $1.15). Believe QLogic is well-positioned
for sequential growth starting in the September quarter given its strong product momentum.
09:12 ET i2 Technologies (ITWO) 19.95: Banc of America Sec initiates coverage with a BUY rating and $30 price target. Recent share
price weakness has created a great long-term buying opportunity in this leading company and is related to the following factors: 1) the
economic slowdown 2) soft i2 March quarter and lowered CY01 guidance of $1.3 bln in revenues (from $1.64 bln) and breakeven for
CY01 versus an EPS of $0.37 3) modest head count reduction.
09:06 ET Acterna (ACTR) 11.87: Verizon Communications (VZ) to deploy Acterna's NetOptimize Capacity Manager OSS to support
optimized performance of a variety of services on the carrier's national consumer data network. Nationwide deployment of the system is in
progress.
09:03 ET TriQuint Semi (TQNT) 26: -- Update -- CIBC upgrades to STRONG BUY from Buy; views SAWS merger as watershed
event for wireless component group and ups EPS estimates to $0.57 from $0.49 for FY01 and to $1.15 from $1.00 for FY02. Hearing
both positive and negative comments on this merger (see 8:49 comment for more).
08:57 ET QLogic (QLGC) 42.51: Salomon Smith Barney trimming estimates following earnings report; reduces JunQ est. to $0.24 from
$0.29, FY02 to $1.11 from $1.23, and FY03 to $1.36 from $1.50; says guidance is for JunQ revenues down 3%-8%.
08:49 ET TriQuint Semi (TQNT) 26: -- Update -- CSFB sounding a cautious note on the SAWS acquisition: says they are skeptical
about projected growth rates for the combined company given the trends in the SAW market towards direct conversion. Firm reiterates
HOLD rating on TQNT.
08:49 ET Pre-Paid Legal (PPD) 19.00: Discloses in SEC filing that the SEC's Division of Corporation Finance reviewed the company's
1999 and 2000 10-Ks. On May 11, PPD received a letter advising that it was the position of the Division that the company's accounting for
commission advance receivables is not in accordance with GAAP.
08:46 ET Sycamore Ntwks (SCMR) 9.32: -- Update -- Morgan Stanley says despite negative data points from the quarter and lack of
visibility, would be buyers of the stock. Though the next 2 qtrs could be challenging, SCMR's new products position them for a medium-term
recovery. Valuation looks attractive.
08:43 ET Jabil Circuit (JBL) 30.84: Morgan Stanley downgrades to NEUTRAL from Outperform as stock approaches firm's $32 price
target; would revisit rating on a pullback to the mid-$20s.
08:39 ET Gapping Up : RNWK+5.5% (Sony integration pact)... SAWS +4% (agrees to be acquired by TQNT in stock-stock deal;
seeing 16% premium eroded by pre-market weakness in TQNT)... BEAS +3.5% (lifts after reporting in line results and raising guidance)...
KREM +3% (tops estimates; raises forecasts, again)... BKHM +3% (benefiting from rumor that CY is kicking the tires).
08:35 ET Intel (INTC) 27.20: Hearing from sources at CSFB that the firm is saying that Intel's quarter is running 30% behind plan and
recommends selling the stock. INTC 26.85 pre-market.
08:31 ET Economic Data : April CPI rises 0.3%, compared to 0.4% consensus. The Core CPI (ex food and energy) rose 0.2%, in line
with expectations. Housing starts rose 1.5% to a 1.609 mln rate, slightly above the 1.6 mln rate anticipated by economists. Modest uptick in
the futures on back of numbers.
08:30 ET RF Micro Device (RFMD) 28.71: Trading down 1 pt pre-market amid fears that a merged TQNT/SAWS will be a formidable
competitor for RFMD; Bear Stearns' Ripple Effect notes that while RFMD supplies modules, it still doesn't have saw filters (does design
only). Other competitors noted by Bear: AHAA, ANAD, CNXT.
08:28 ET ITT Industries (ITT) 46.04: Bear Stearns initiates coverage with an ATTRACTIVE rating and price target of $57; cites
company's favorable on-going business mix shift toward less cyclical, higher-margin platforms. ITT holds leading industry positions in the
water and wastewater, electronic components, and defense electronics and services industries.
08:24 ET Capex Cuts : This morning's Cisco rumors and the general pressure being seen in the telecom equipment sector are no doubt tied
to the continued bad news on the capex front: both Sprint (FON) and 360Networks (TSIX) announced capex reductions last night,
continuing a stream of such announcements over the past month.
08:21 ET Solly Fades Homebuilders : Salomon Smith Barney recommending that investors take profits in the recently hot homebuilding
group; firm out with downgrades of BZH, WBB, RYL, HOV (Neutral from Outperform); lowers SHLR and MDC to Outperform from
Buy.
08:20 ET Redback Ntwrks (RBAK) 15.60: Hearing from sources at CSFB that Redback presented at the CSFB conference last night,
and that there was more evidence of traction issues for RBAK's SmartEdge product vs Cisco's (CSCO) Cerent product. SmartEdge
revenues had been expected up sequentially but are not expected flat/down.
08:17 ET Cisco Systems (CSCO) 18.74: There have been rumors on European trading floors that Cisco may announce a cut in its order
book; these rumors are now making their way around US trading floors and have been reported by both Bloomberg TV and BridgeNews.
There is no confirmation of these rumors and they are unlikely to be true given that we're only two weeks into Cisco's July quarter. Cisco
down to 18.24 pre-market.
08:16 ET Charter Comm (CHTR) 23.86: Cable systems operator announces intent to offer $1.25 bln of Class A common stock and
$500 mln of Convertible Senior Notes.
08:15 ET ASM Lithography (ASML) 24.40: Goldman Sachs downgrades to MKT OUTPERFORM from Recommended List; feels the
shares should trend a little weaker as the outlook for 2H 2001 weakens; see little improvement from depressed levels in 1H 2002.
08:11 ET Chartered Semi (CHRT) 30.78: Banc of America Sec. initiates coverage with a BUY rating and 12-month price target of $42;
views CHRT as a good way to participate in the growth of the semiconductor foundry and the communication device business.
08:02 ET Brocade Comms (BRCD) 42.50: After the close, company reported Q2 earnings of $0.05, in line with reduced expectations...
Merrill Lynch slashes FY02 earnings forecast to $0.56 (p/e 76) from $0.92 and revenue est. to $0.723 bln from $1.21 bln to reflect more
realistic rates of growth; feels revised numbers are already priced into the stock.
07:53 ET BEA Systems (BEAS) 34.04: ABN AMRO upgrades to BUY from Add following earnings report last night.
07:47 ET Check Point Sftwr (CHKP) 54.91: Lehman downgrades to BUY from Strong Buy and lowers price target to $70 (from $110);
believes increasing competition from Cisco and others in the service provider VPN market is likely to cap upside to numbers and compress
multiple over time; recent price promotions suggest near-term customer demand remains an issue.
07:43 ET Comm IC Downgrades : Goldman Sachs downgrades communications chip names AMCC, PMCS, VTSS to MKT
OUTPERFORM from Trading Buy; more likely to see adverse news flow out of sector during the next six weeks; while stocks provide
interesting trading vehicles given volatility, believes high valuations and limited visibility will likely cause the trading range to trend lower in the
near-term.
07:37 ET Sonus Networks (SONS) 27.60: After the close, announced that Japanese carrier Fusion Communications has deployed Sonus'
voice infrastructure solutions as the foundation of its next-generation voice network, which began delivering live traffic last month.
07:32 ET Opening Indications : This morning's fair value figures -- S&P 500 fair value: 1253; closed 5 pts above fair value. Nasdaq 100
fair value: 1803; closed 14 pts above fair value. Current indications: S&P 500 futures are -9.0, or 4 pts below fair value. Nasdaq 100 is
-42.5, or 28.5 pts below fair value... Tech sector under pressure this morning after TSIX slashed capex plans by approx. $1.5 bln; a major
call on the communications chip space also weighing on tech.
07:26 ET Tiffany & Co (TIF) 33.69: Posts Q1 earnings of $0.20 a share, 2 cents above consensus, vs yr-ago net of $0.20; sales declined
3% to $336.4 mln.
07:20 ET Sycamore Ntwks (SCMR) 9.32: WR Hambrecht feels that major capital spending reduction announced last night by 10%
customer 360networks (TSIX) dramatically underscores the near-term risk profile for Sycamore Networks, which counts a number of
emerging carriers as customers; sees little in the way of catalysts for shares over the near term; expects stock to tread water in the high single
digits.
07:17 ET Whole Foods (WFMI) 53.16: UBS Warburg upgrades to BUY from Hold after meeting with management; believes that WFMI
can beat its own sales targets for the 2nd-half given management's emphasis on providing conservative guidance and its desire to over-deliver
relative to expectations.
07:09 ET Drug Makers : National Institutes of Health (NIH) issues new cholesterol standards that could potentially triple U.S. sales of
cholesterol lowering drugs to nearly $30 bln per yr. Stocks to watch: MRK, PFE, BMY.
07:01 ET Packaging Corp (PKG) 14.24: Containerboard and corrugated products maker will be added to the S&P MidCap 400 Index
on a date to be announced; will be replacing Chris-Craft Industries (CCN).
06:55 ET RealNetworks (RNWK) 8.80: Announces strategic alliance to imbed RealNetworks software in the PlayStation 2 gaming
console; will allow current and future PlayStation 2 owners to access streaming and downloadable audio and video content.
06:45 ET Krispy Kreme (KREM) 49.40: Reports Q1 earnings of $0.20 a share, 3 cents above consensus, vs yr-ago net of $0.13;
system-wide sales increased 35.8% to $140.4 mln; same-store sales rose 11.4%... Raises full yr guidance to $0.77 (mean $0.70) and
outlook for next yr to $1.00 (mean $0.87).
06:37 ET Sprint FON (FON) 21.58: Lowers Q2 outlook to $0.28-0.30, compared to the current First Call mean est. of $0.32; shortfall
blamed on lower-than-expected profit contributions from the Global Markets segment.
06:17 ET U.S. Markets : S&P futures trading at 1248.20, 4.8 points below fair value, Nasdaq 100 futures trading at 1782, 21.0 points
below fair value. The 30-year bond is up 20 ticks at 5.862%. The dollar is mixed, weaker against the euro, but stronger against the yen.
06:16 ET European Markets : FTSE -0.75%, DAX -1.58% -- European stocks hit by another tech underperformance. Most bourses
down over 1% on concerns that central banks may be ready to let up on the monetary accelerator. ASML weighed down following the
decision by Goldman Sachs to downgrade the company’s shares. Not to be outdone, UBS cuts its 2001 earnings forecast for ASML by
more than 30%. Media companies have also suffered from concerns about declining ad revenues.
06:15 ET Asian Markets : Nikkei -2.56%, Hang Seng +0.65% -- Asian stocks mostly lower in response to the subdued reaction of US
stocks to the Fed’s 50 bp rate cut. Japan led the way lower with the Nikkei off more than 2.5%. Tech issues sold off on the back of
disappointing earnings from electronic component maker Murata Manufacturing Co. Shares in Taiwan were dragged down by a 1.7%
decline in Taiwan Semiconductor Manufacturing, which itself was hit by weak guidance from Applied Materials. Hong Kong was one of the
few bright spots with China-related shares outperforming, while Korea’s Kospi lost 1.5% on heavy foreign selling in the futures market.
00:03 ET Bookham Tech (BKHM) 4.86 +0.20: In an article about Cypress Semi's (CY) move into MEMS (micro-electro-mechanical
systems) technology used in optical switches, optical site Light Reading reports that rumors have circulated that CY will make another move
into optical by acquiring Bookham Technology (BKHM). |
