From Briefing.com: 5:51PM EMC Corp and Dell to create low-end storage product (EMC) 6.36 -0.40: Dow Jones reporting that EMC and Dell Computer (DELL) agree to create and sell a co-branded storage product targeting the low-end market; Dell will manufacture the product, which will include EMC software, and pay EMC royalties.
5:47PM Tuesday After Hours price changes vs 4pm ET levels: Not a great deal of news in the after hours session, but as is often the case, earnings announcements have been the main point of interest... In actuality, it has been a batch of earnings pre-announcements for the September quarter that have been the main point of interest tonight... Fairchild Semiconductor (FCS 10.08 -0.41) is one of the more notable companies to pre-announce its results, and to the chagrin of investors, its Q3 update isn't too encouraging as it believes revenues will now be flat to down slightly from Q2 levels versus previous guidance of flat to up slightly. FCS added that its visibility into Q4 remains limited
4:10PM Fairchild Semi lowers revenue guidance (FCS) 10.49 -1.58: -- Update -- Announces that Q3 revs now look to be flat to slightly down from Q2 levels, vs previous guidance of flat to slightly up sequential quarterly rev growth; Q3 gross margins are now expected to be down roughly 1% from Q2. "Currently our visibility into Q4 remains limited... the recent more conservative outlooks from industry-leading computer and retail electronics suppliers lead us now to believe the Q4 seasonal upturn will be very modest compared with past years and lower pricing may partially offset increased unit demand."
3:52PM Intel and SOX hover above 52-wk lows (INTC) 15.94 -0.73: -- Update -- Stock had traded in an extremely tight range of $16.05 to $15.98 over the past two hours, spending much of the time sitting right on support at $16.00. INTC clinging to this level as the SOX (286.33) eyes its 52-wk low of 282.75. Investors/traders will be playing close attention to this key level for the SOX the remainder of the day and tomorrow. Failure of SOX to hold this area would suggest a test of the $15.82 low is in the cards for INTC.
3:03PM Message of the Markets : Though Briefing.com still not a believer in the double-dip scenario, the message being sent by today's market action is that many investors are indeed fearful of another downturn in the economy; as the visceral reaction to the weak ISM data, the Consolidated Freightways bankruptcy news and the sharp rise in layoffs for the month of August, would suggest... Weakness in the Nikkei (plunged to lowest level in 19 years) and a soft dollar are also contributing factors behind the retreat, but the three-headed monster noted above struck at the heart of the market's concerns of a consumer/business led double-dip... The disappointing ISM data reinforced that business investment remains sluggish - not a big surprise, but not heart-warming either... Should note that business investment, though soft, is still running above last year's pace... Similarly, layoffs are well below last year's pace though the recent spike has investors worried that consumers will respond to the more unsettled employment outlook by tightening their purse strings... Though possible, if consumers didn't refrain from spending last year when the number of layoffs was much higher, why would they do so now - especially when many will be receiving a nice cash boost from recent round of refinancings... News that Consolidated Freightways had ceased operations and was declaring bankruptcy, while not a major event in and of itself (except for those that worked there), adds to the general concern over the rising number of high-profile bankruptcies and turbulent job market... Here again, the real rather than the headline impact is minimal... The demise of CF will simply create opportunity for expansion at other trucking outfits (notice today's jump in the sector)... Unfortunately, the creation of new opportunities/new jobs is dispersed, thus it doesn't received the visibility and front-page headlines accorded the bankruptcy... In sum, even though today's news is distressing - especially when delivered concurrently - it doesn't alter the economic outlook much at all... The whole of the data continue to support Briefing.com's contention that the economic recovery remains on firm footing... Rebound might not be as strong as some had hoped, but growth in the neighborhood of 1.5% to 2.5% is still the most probable outcome... Nevertheless, the rotation out of economically sensitive areas of the market into more defensive groups (gold, tobacco, beverage, utility, etc) is apt to continue until investors see more consistent evidence of economic health. -- Robert Walberg, Briefing.com
2:12PM KLAC edges up on guidance 31.47 -1.40: Stock has ticked up about $0.25 following wire reports that co sees Q1 orders flat to down 15% vs previous guidance of flat to down 10%. While the comments would appear negative on first take, investors seem to have been prepared for lowered guidance by recent cautionary comments out of brokerage firms. For example, Piper Jaffray last week said it expected KLAC to show a 10-15% sequential decline in orders.
1:56PM Standout Percentage Losers : FTE -14.5%, FLE -13%, ANDW -11%, HGSI -10.7%, MCDT -9%, ADBE -9%, V -8.7%, ALA -8.5%, TKLC -8.3%, VECO -8.2%, ESST -8%, CREE -7.8%, HAL -7.4%, ESV -7.3%
1:17PM Chart Watch : It is ugly out there today and the semi sector, often a key leadership sector, is once again helping pace the way on the downside. Cautious commentary out of Lehman on Intel (INTC 16.01) -- Q3 is slightly more back-end loaded than originally expected, which should lead the co to lower revenue guidance during their Sept 5 update-- has weighed on the sector today but we touched on the technical deterioration last week.
The sector has nearly completed a round trip back to its August low with INTC vacillating near the bottom of its now well defined two month trading range. The floor of this range is at the 52-wk low (15.82) and if this is taken out, it will leave the stock at its lowest level since March 1997. From a technical perspective this type of pattern can be played as a possible breakout with volume always important regarding a test or penetration of a key level. Note that the August rally retested the upper end of the range and the 50 day ema but the move was accompanied by below average volume (blue line is 65 day average volume level). The subsequent decline has also come amid below average volume. The key regarding a more sustained move will be if trading volume picks up as the issue vacillates near the low and then during a breakout. From a short term view there is a minor support at 15.5 but there is relatively little of interest thereafter until 14.25. A minor breach of support and a rebound back above on improved volume would argue for at least a near term bottom. -- Jim Schroeder, Briefing.com
12:40PM Networking Sector: In our last update on the networking sector, Briefing.com expressed reserve over the near-term prospects for networkers. We continue to believe the sector carries near-term risk, although the longer-term outlook is becoming more attractive on fundamental grounds. As we have been noting for over a year, capital spending by telecom carriers has fallen off dramatically, and the decline has affected many networkers. Yet at the same time, second quarter results in storage networking continued to suggest inventory is tightening in the aggregate while gross margins also showed signs of recovery. Moreover, inventory turnover appears to have hit its low point last year and has improved notably in the first half of the current year. So with the inventory and margin situation on the mend, investors will begin to look for the real key which is a resumption in revenue growth. While this makes sense as the next logical step in the progression, expect many investors to wait for firm signs of recovery before making a commitment to the group. The positive side of the broader picture is the industry should be insulated from any further screaming slides lower. Yet this year's capex cuts could limit the scope of any industry upturn inhibiting the quality of the group's recovery. Taken together, this means we have potential limitations to the sector's intermediate-term downside as well as its upside. While near-term concerns regarding earnings visibility and revenue growth cause us to remain somewhat cautious, we believe the investor with a longer-term time horizon will want to have an eye on the group's leaders. We are maintaining our rating on the group at Market Perform. -- Mike Ashbaugh, Briefing.com
1:00PM Sun Microsystems retests one-yr low of $3.50 set July 25 (SUNW) 3.51 -0.18:
12:48PM Linear Tech: long-term power management trends intact (LLTC) 24.95 -1.27: Prudential says that checks suggest power mgmt content will continue to increase, and the longer-trend of higher amperage and more distributed power is here to stay; reiterates Buy rating on LLTC as a leader in high-performance power mgmt, as well as their Hold rating on FCS due to a more difficult pricing environment near-term and a difficult environment in the co's discrete biz.
12:46PM CSFB on Semis : For sixth time in past seven months, July's semi revs growth, which came in at 2.9%, exceeded historical average; despite continuous surge in unit growth, semi stocks have depreciated by about 15% during last two months. Firm believes growth gap between semi stocks and units should narrow in 2H02, providing trading opportunities; continues to favor unit driven diversified cos with broad end-market and product exposure, including Buy-rated top picks: Texas Instruments (TXN 18.94 -0.76), Linear Tech (LLTC 24.92 -1.30), and Maxim Integr Prod (00C0 30.03 -1.58) in large caps; Integr Circuit Sys (ICST 16.89 -0.94), Intersil (ISIL 15.89 -1.03), Fairchild Semis (FCS 11.29 -0.78) and Marvell Tech (MRVL 17.95 -1.11) in mid caps; and Chippac (CHPC 2.77 -0.30) in small caps. Despite upbeat commentary, morning's disappointing ISM results are weighing on stocks.
10:18AM Technical Levels: In our last review of the Nasdaq, we set our final resistance point in the range of 1,419 to 1,423. With the benefit of hindsight, the index did indeed top out at 1,422.95 on a closing basis which matched up relatively well with our expectations. So why is the 1,423 level an obvious resistance point? In a nutshell, because it had been notable prior support. Namely, it happens to coincide with three points of interest over the prior five years -- 1) the September 11th-induced reaction lows which bottomed at 1,423, 2) the reaction lows of October 1998 which bottomed at 1,419 and 3) the ordinary course of its original uptrend during the Summer of 1997. At any rate, since topping out at 1,423, the index has been in the midst of a six-day sell wave or consolidation phase. In terms of likely candidates for support, look for a potentially notable floor on a closing basis in the broad range of 1,277 to 1,290. This area approximates a 62% retracement of the prior leg higher, and also matches up relatively well with congestion over the prior six weeks. If 1,277 should fail on the close, the 1,240 to 1,247 range looks like the next 'good candidate' for subsequent support -- that's followed by significant support at 1,206 which represents the index' August 5th closing low. With each of the former support points laid out, keep in mind that 1,277 appears to be the best candidate for at least a near-term bounce. If the index should put together a meaningful move higher, watch for significant resistance in the range of 1,339 to 1,347 which brackets the index' 50-day simple moving average as well as its 20-day exponential moving average. -- Mike Ashbaugh, Briefing.com
10:18AM New 52-Week Lows : Chartered Semi (CHRT)... Teco Energy (TE)... UTStarcom (UTSI)... National Semi (NSM)... PMC-Sierra (PMCS)... Tibco Software (TIBX)... Pathmark Stores (PTMK)... Semtec (SMTC)... Lam Research (LRCX)... LTX Corp (LTXX)... Varian Semi (VSEA)... Retek (RETK)... Robert Half (RHI)... Albertsons (ABS)... Goodyear Tire (GT)... Wilson's Leather (WLSN)... Vishay Intl (VSH)... Ashland Inc (ASH)... Celera Genomics (CRA)... Agilent (A)... Herman Miller (MLHR).
10:01AM Nasdaq Composite Intraday : -- Technical -- The index is vacillating near the worst level of the morning and just above support in the 1281/1277 area (62% retrace of the entire recovery rally/congestion). First step to helping improve the bias is a push through resistance at 1296/1300 with a secondary short term ceiling at 1312/1315. Failure leaves the door open to next support at 1268/1265.
9:41AM ISM Index seen rising to 51.8 : The economic indicators regain top billing this week. The 10 ET report from ISM is eyed for evidence that sentiment among manufacturers is falling as orders aren't providing a strong enough kick. The sharp 10+ point decline in the key new orders component in July contrasts with the stunning rebound in July capital goods orders... With equities lower this morning amid concerns the ISM Index could miss consensus, a stronger than expected reading (consensus 51.8) could lead to a snapback recovery in the major averages.
9:16AM Chartered Semi looks to raise $633 mln through rights offering (CHRT) 11.85: Co reiterates guidance for Q3 and announces plans to raise approx. $633 mln through an eight-for-ten rights offering to existing shareholders. The rights to the ordinary shares will be priced at US$5.71, a 52% discount to Friday's closing price). Pursuant to the rights offering, approx. 1.11 bln new ordinary shares will be issued.
finance.yahoo.com^SOXX+A+ALTR+AMAT+AMD+BRCM+CHPC+CHRT+DELL+EMC+FCS+ICST+INTC+ISIL+KLAC+LLTC+LRCX+LSCC+LSI+MOT+MU+MXIM+NSM+NVLS+PMCS+SMTC++SUNW+TER+TXN+XLNX+^VIX+^IXIC&d=t
Thanks for the CSFB link!
RtS |
