From Briefing.com: Close Dow -54.46 at 10243.68, S&P -5.26 at 1091.00, Nasdaq +6.51 at 1725.56: The market entered the session with plenty of upside momentum as the averages had rallied considerably (as much as 7.7% Nasdaq Composite, 4.1% S&P 500 and 3.8% Dow) over the previous two sessions. However, cautious comments from Hewlett-Packard (HPQ -5.6%) after it reported slightly below quarterly EPS and revenue estimates last night (said does not see meaningful improvement in IT spending until 2003) and an above consensus inflation report helped to trigger a wave of profit taking. Downgrades in the oil service sector and weakness in oil prices (higher than expected inventory levels) added to the early weaker tone. The Nasdaq Composite was able to recover back to positive territory during the morning with biotech, semi, network and wireless pacing the way but the rest of the market did not accomplish the same feat until the afternoon. Unfortunately, the broader based advance (S&P 600 SmallCap retested its all time high) proved short lived with the entire market falling well off the highs in late trade. There was speculation that expiration related activity or possibly commentary from a Fed source triggered the selling but there was no confirmation of this. Keep in mind that after several days of a strong advance it takes relatively little to trigger a wave of profit taking particularly given the negative type of environment that has dominated for most of the last two months. Volume was relatively heavy with market internals slightly positive except of the NYSE up/down volume ratio. DJTA +1%, DOT +0.5%, Nasdaq 100 +0.4%, SOX -0.6%, S&P Midcap 400 -0.35, XOI +1.5%, NYSE Adv/Dec 1699/1499, Nasdaq Adv/Dec 1811/1690
3:30PM : The pattern of Dow and S&P under performing
3:19PM Intel (INTC) 30.29 +0.14: Lehman Brothers' Dan Niles responds to yesterday's contention (prompted by a Robertson Stephens upgrade to BUY from Mkt Perform) that INTC will try and forego a price cut on desktop PIV processors in Q3, thereby trying to increase ASPs. Firm believes that, assuming some elasticity of demand, this action will probably drive less units; points out that historically, as prices increased on DRAMs, PC OEMs have tried to cut back. With regards to INTC's current qtr, Lehman believes it has weakened and is now tracking to the mid-point of the current guidance (revs of $6.4-7.0 bln); stresses that this downward pressure, combined with a high valuation, should continue to drive the stock in the near term.
3:00PM Semiconductor Sector : -- Technical -- SOX has edged into the red on broad market sell pressure. Currently trading at 541, look for initial support at 530/533 followed by an additional floor at 524. To the upside, watch for initial resistance at 554 which represents the index' 100-day simple moving average
1:30PM CSFB Commun Conf (Day 1) : Firm believes AV's qtr will be backend loaded with 1% seq growth. CSGS continues to expect revenue of $660-690 mln (70% of which is under contract) and EPS of $1.90-$2.05 in 2002. TQNT reiterated its rev and EPS guidance of $60-$63 mln & $0.00-$(0.02); stated that previously highlighted strength in base stations has continued with further design wins in CDMA & GSM. Mgmt at EXTR still expects a seq revenue increase this qtr. FDRY reported that the momentum seen at the end of last qtr was continuing into May, with Apr revenues the best first month of a qtr in 6 qtrs.
1:14PM Nasdaq Composite Intraday : -- Technical -- Index has edged to the session's bestlevels on strong relative volume. From current levels, look for initial resistance at 1750/1754 followed by additional overhead at 1762. To the downside, watch for initial support at 1735 followed by subsequent support at 1722.
12:54PM ChipPAC (CHPC) 10.89 -0.62: Last night, company issued positive Q2 (Jun) pre-announcement and announced plans to sell 12 mln shares. Based on this news, Thomas Weisel is reiterating Buy and upping price target to $16 from $14. Firm is not surprised by pre-announcement as it is attributable to ongoing demand strength, excellent die support, and selective price increases. As for 12 mln share offering, assuming that the majority of proceeds would be used to pay down debt, firm believes such an offering would be immediately accretive. Also, believes a successful offering would remove lingering concerns regarding company's balance sheet, which firm expects to improve significantly in 2H FY02 through strong cash generation... Despite upbeat news and comments, CHPC trading down 5.4%.
12:36PM Hewlett-Packard (HPQ) 19.26 -1.24: Yesterday, company reported slightly lower than expected Q2 earnings results. The stock is trading down 6% today, despite some upbeat analyst comments... Merrill Lynch reiterated near-term Buy/long-term Buy, noting HPQ's quarter was mixed with revenue light but margins strong. Also, firm says the quarter provides support for the merger; Compaq's strengths in Intel servers and storage are critical. Merrill continues to recommend HPQ, and expects the stock to move into the mid-to-upper $20s. Prudential also reiterated Buy rating and price target of $24 as firm finds risk/reward attractive.
10:35AM Oracle boosted by rumors (ORCL) 9.17 +0.36: -- Update -- Heard early rumors that Oracle had made their numbers for the qtr ending in two weeks; follow-up talk has been that a sell-side analyst spoke with Oracle and the company appeared to be comfortable with estimates for the quarter, leading the analyst to make positive comments to clients. Obviously, this talk is all vague and difficult to verify, but it is lifting the stock this morning.
10:30AM Silicon Storage Intraday (SSTI) 12.17 +0.30: -- Technical -- Breaking above resistance at 12.00 to a new five-month high. Look for subsequent resistance in the area of 12.50. The favorable intraday tone would deteriorate on a failure at very near-term support at 11.85.
9:42AM Microsoft rev estimates may have to be trimmed-- Soundview (MSFT) 54.15 -0.73: -- Update -- Soundview in a pre-open note said that top-line numbers across the street may have to be shaved a bit after the co announced its Xbox price cuts; feels price cuts should not affect earnings ests.
8:53AM Oracle accused of defrauding Calif by legislator (ORCL) 8.81: In the ongoing dispute over Oracle's $95 mln software contract with California, CNET reported last night thata state Assemblyman accused Oracle and its partner Logicon of being "part and parcel of defrauding the state of California". This marks the first time that the blame for this much criticized deal has fallen on Oracle instead of state employees and politicians, though the emails that are the basis of the legislator's claim are not that damning, indicating only that Oracle and Logicon did not want to volunteer details until asked by state employees.
8:18AM Flextronics and Microsoft open Xbox plant in China (FLEX) 15.41: The companies also stated that the console manufacturing operation in Hungary would be relocated to Doumen, China. In addition to the Xbox operations at Flextronics' Guadalajara, Mexico, facility and the new operations in China, Microsoft will add another facility in Asia in the future.
7:43AM Anadigics upgraded at WR Hambrecht (ANAD) 12.02: WR Hambrecht upgrades to MKT OUTPERFORM from Mkt Perform based on the belief that the co is executing well in the CDMA PA space and has a solid broadband business. Price target is $16.
finance.yahoo.com^SOXX+^IXIC&d=t
Congrats on the MKSI! Let me know if and when you make any new moves. Especially initiating a new position.
RtS |
