RECAP & STOCKS TO WATCH FOR TUESDAY, 12- 12-00
Today, most of Wall Street’s attention was focused on “Indecision 2000” as the 2 teams argued in a closed-door session in front of the U.S. Supreme Court. Although the Court gave no indication as to when it would hand down its ruling, confidence slowly grew throughout the trading day. The Nasdaq Composite soared above and closed above 3,000 for the first time in almost a month, led by the semiconductors, software, and Internet stocks. The SOX, which posted a 12% gain on Friday, added another 5.8% today. Numerous analysts gave extremely bullish forecasts for the year ahead, encouraged by signs that the Fed is ready to start chopping rates. Ed Kerschner, chief global strategist at UBS Warburg, said that 2001 would be “one of the five most attractive opportunities of the past 20 years.”
The Nasdaq Composite finished with a 97- point gain to close at 3,014. Volume was a healthy 2.4 billion shares, with 92 stocks making new highs compared to 156 new lows. Blue chips squeaked out a gain as well, as the Dow finished with a 12-point gain at 10,725. Volume on the Big Board was 1.2 billion shares, with 247 stocks making new highs compared to 58 new lows.
This coming week is heavily weighted in economic reports, highlighted by the CPI report on Friday, which is expected to remain steady at 0.2% (excluding food and energy). Also on the menu is Retail Sales on Wed., the PPI on Thur., and Business Inventories, which will be closely watched after Cisco’s inventory concerns, on Thur. Once again, all of these reports could be overshadowed by “Indecision 2000.”
The fact that the market isn’t getting crushed on bad news further affirms that a good deal of the slower growth has been priced into the market, and that a short-term bottom has been hammered out. Given the scope of last week’s gains on the tier 1 stocks, we will continue to focus on money flow into the secondary tiers, and opportunities on pullbacks due to profit- taking on the tier 1’s. There is still a ton of cash that is itching to play this market. To add fuel to the fire, holding the 3,000 level will force shorts to cover positions. Next resistance is the 3150-3200 area.
The Nasdaq Composite: tradewindsonline.net
Earnings Spotlight: Oracle Corp. (ORCL) heads the list of earnings reports this week. The tech heavyweight is scheduled to report on Thursday. Other companies reporting on Thur. include CMGI, Inc. (CMGI), Adobe Systems (ADBE), Red Hat (RHAT), Verity (VRTY), and Biomet (BMET).
Sun Microsystems (SUNW): After the close, the company issued a statement saying that market rumors circulating over past sessions about alleged accounting irregularities at the firm “have no basis in fact and are false.”
Advanced Micro Devices (AMD): Company became the 4th semiconductor company to issue a profit warning within the last 2 weeks. For Q4, sees EPS be in the range of $0.50 to $0.60 per share, versus $0.68 consensus mean. Revenues will be flat to nominally higher from Q3 level of $1.21 bln. Company cites weak demand for consumer PCs in the U.S.
Microchip (MCHP): Company warns for Q3; sees sales to be below previous expectations, primarily due to the worldwide inventory correction in the distribution channel. Expects revenues to be flat with the $176.3 mln from Q2.
DoubleClick (DCLK): Company warns Q4 by a nickel to a loss of $0.03; dot-com customers as a % of revs now at 48%, down from 50% last qtr and 60% a year ago; putting tight cap on capital spending. They guided down revenue for Q4 and Q1 to $126-$129 mln and $115 mln from earlier guidance of $141 mln and $137 mln, respectively. Company still expects to be profitable for full year. |
