MARKET SNAPSHOT--Tech strength emerges
Durable goods plunge 12.4%
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 9:27 AM ET Aug 24, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - Some strength is developing in the technology group Thursday but action in the broad market is likely to be stable when trading commences with no compelling reason to step up to the plate.
September S&P 500 futures edged up 0.70 point but were trading roughly 1.00 point below fair value, according to figures provided by HL Camp & Co. -- pointing to an open close to the unchanged mark. Nasdaq futures advanced by a modest 18.00 points, or 0.5 percent.
In shares trading before the opening bell, VA Linux Systems added 6 7/8 to 44 - a 19 percent gain. See Indications. The company (LNUX: news, msgs) reported after the close Wednesday a fourth-quarter loss of 10 cents a share, less than the First Call estimate of a loss of 15 cents.
WR Hambrecht upped VA Linux to a "strong buy" rating following the company's stellar earnings report and set a $60 price target. Saying the stocks' current valuation does not reflect its solid progress and renewed positive outlook. WR Hambrecht said the company exceeded their expectations for revenue growth rate, gross margins and movement towards profitability.
CS First Boston raised its fiscal year 2001 revenue forecast for VA Linux from $271 from $323 million and reiterated its "buy" rating and 12-month price target of $65.
Among other tech stocks seeing activity, Cisco Systems (CSCO: news, msgs) inched up 1/16 to 67 1/2 over the Island ECN, erasing earlier losses.
J.D. Edwards (JDEC: news, msgs) reported after the close Wednesday a third-quarter profit from operations of 2 cents a share versus the First Call estimate of 1 cent a share and a loss of 7 cents in the year-ago period. ING Barings called the results outstanding in a research note and said total revenues came in at the high end of the preannounced range at $261 million. ING said the company still lacks in valuation by over 50 percent versus its competitors while it continues to gain significant market share. The stock ended off 5/16 to 23 1/2.
Treasury focus
Treasurys were a touch higher, extending Wednesday's advance, with long-dated issues outrunning short-dated ones. The market picked up some steam on the weaker-than-expected economic figures.
The 10-year Treasury note gained 7/32 to yield ($TNX: news, msgs) 5.70 percent and the 30-year bond climbed 3/32 to yield ($TYX: news, msgs) 5.665 percent. See Bond Report.
On the economic docket, Thursday saw the release of durable goods orders for July, which plunged a surprising 12.4 percent compared to expectations for a 5.4 percent drop. Excluding defense, durable goods fell 6.8 percent. See full story. The fall in the figure was due to a record drop in transportation orders - which tumbled 31 percent - driven primarily by aircraft.
In other news, weekly initial claims added 4,000 to 314,000. Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, dollar/yen (C_JPY: news, msgs) recovered following Wednesday's sell-off, with the pair up 0.1 percent at 107.11. Euro/dollar (C_EUR: news, msgs) slipped 0.1 percent to 0.9015. View latest currency rates.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
