EXTR--CORRECTED - U.S. stocks seen sharply at open after good corporate results
In NEW YORK story headlined: ``U.S. stocks seen sharply at open after good corporate results'' read in paragraph 21 ... Extreme Networks Inc. (NasdaqNM:EXTR - news) shares were mauled after-hours, falling about 10 percent to $96-1/4, despite the computer networking equipment maker reporting first-quarter earnings that exceeded Wall Street estimates ... instead of ... Another laggard was Extreme Networks Inc. (NasdaqNM:EXTR - news), whose shares were mauled in after-hours trade, falling about 10 percent to $96-1/4, after the computer networking equipment maker reported first-quarter net earnings that misses expectations. (corrects to make clear that Extreme Networks reported earnings that exceeded Wall Street estimates, not missed estimates).
A corrected repetition follows.
By Haitham Haddadin
NEW YORK, Oct 19 (Reuters) - Wall Street is bracing for a very strong open on Thursday that could take the Dow above the key 10,000 level, with nervous investors seen comforted by a batch of upbeat scorecards from high-tech heavyweights.
The improved market sentiment comes in the wake of good earnings reported by software giant Microsoft Corp. (NasdaqNM:MSFT - news), top Internet services provider America Online Inc. (NYSE:AOL - news) and communications chip maker Broadcom Corp. (NasdaqNM:BRCM - news) -- which all best Street estimates, in addition to mobile phone giant Nokia Corp (NYSE:NOK - news) of Finland.
All three reported their quarterly results after the close of Wednesday's volatile trading session, during which stocks early on plunged to year lows with the blue chip Dow Jones industrial average (^DJI - news) plunging below the psychologically important 10,000 barrier, but it cut losses after solid earnings came from technology bellwether Sun Microsystems (NasdaqNM:SUNW - news) later during the session.
``It'll be more than firm, I'd say it'll be an extremely strong open and that'll be opposite to yesterday's open when there was absolute fear after the market broke 10,000,'' said Barry Hyman, chief market strategist for Weatherly Securities.
``We are going to scale to some upward heights here on the back of some good earnings reports,'' Hyman said, adding he saw the Dow easily climbing above 10,000 and staying there throughout the session.
With more than an hour to go to Thursday's open, Nasdaq 100 index futures for December were 95 points higher, or ``limit up'', at 3,250, S&P 500 futures were 11.50 points higher at 1,364.30 and Dow futures were up 85 at 10,128.
The Dow ended at 9,975.02, down 114.69 points, or 1.14 percent on Wednesday, the first time the index has closed below the 10,000 level since mid-March. The Nasdaq Composite Index (^IXIC - news) first fell almost 6 percent, or close to 200 points, early in the day to a new year low of 3,026.11 but ended down just 42.40 points, or 1.32 percent, at 3,171.56.
The broader Standard & Poor's 500 Index (^SPX - news), ended down 7.84 points, or 0.58 percent, at 1,342.13.
Wednesday's plunge came in the wake of disappointing sales growth at computing titan International Business Machines (NYSE:IBM - news), which reignited fears of slowing corporate profit growth.
But immediate after the close a slew of good reports came out. Among those Microsoft posted a quarterly profit that soundly beat Street estimates before including an accounting change, saying performance was solid across all its businesses and that it was bullish about its key product, Windows 2000. Microsoft shares rose to $56 on the Instinet electronic broker system from a Wednesday closing price of $51-3/4.
Meanwhile, Nokia's American Depositary Receipts Nokia Group (NYSE:NOK - news) were up at $35 from a close of $30 in pre-open U.S. trade. The company reported above-forecast third-quarter earnings and issued an upbeat outlook.
``One of the key stories out there was Nokia, because that is the leader in a very important sector that being wireless and that has a tremendous influence on the semiconductor and chip market, especially communications chips,'' Hyman said.
``That is going to help a lot of the semis and chips that are suppliers to that market,'' he added.
No. 1 Internet services provider America Online Inc. (NYSE:AOL - news) posted first-quarter earnings that doubled from a year earlier as subscriber, advertising and e-commerce revenues drove growth. America Online Inc. (NYSE:AOL - news) rose to $49-1/4 from a close of $46.91.
Broadcom, a high-speed communications semiconductor maker, reported higher-than-expected third-quarter profit also, on strong revenue growth fuelled by high-speed Internet access demand. It shares rose to $215 after-hours from a close at $209-3/8.
Texas Instruments Inc (NYSE:TXN - news), the leading maker of computer chips for mobile phones, said late Wednesday its third-quarter net income rose 31 percent, matching analysts' expectations. Its shares rose to $37-13/16 after hours from a close of $36-7/8.
``The earnings are being viewed by the market in the after-market as favourable,'' said Dan Ascani, president and director of research at Global Market Strategists Inc, Gainesville, Ga.
``We ought to see a favourable reaction to them tomorrow but there's some general concern among about whether the market has bottomed -- everyone seems to be fixated on this and institutions will selectively pick stocks.''
But Ascani said ``it's hard to say'' whether the Dow will stay above the critical 10,000 mark, because of lingering worries about future earnings.
Among less spectacular earnings, computer maker Apple Computer Inc. (NasdaqNM:AAPL - news), also after the Wednesday close, reported earnings that fell slightly short of already lowered estimates, after it warned of a sales shortfall. Apple Computer Inc. was down at $17-3/4 in pre-open trade from a close of $20-1/8.
Extreme Networks Inc. (NasdaqNM:EXTR - news) shares were mauled after-hours, falling about 10 percent to $96-1/4, despite the computer networking equipment maker reporting first-quarter earnings that exceeded Wall Street estimates.
Economic data to be released on Thursday include international trade figures for August, with forecasts calling for the deficit dropping a little to $31.76 billion from $31.89 billion in July. Also expected are jobless claims data for the week ended October 14, with the average forecast calling for a slight rise in the claims to 307,000 from 306,000 the previous week. Both reports are due out at 8.30 a.m. EDT (1230 GMT).
Wednesday's early plunge was also caused by economic data that showed higher-than-expected inflation at the consumer price level; and the market jitters were heightened as the euro, the single European currency, weakened further raising concern that it may hurt U.S. companies' exports. |
