RECAP & STOCKS TO WATCH FOR FRIDAY, 1-12-01
On Wednesday, Cisco (CSCO) issued cautionary statements, and the Nasdaq closed positive. After the bell on Wednesday, Yahoo! (YHOO) warned for FY01, and the Nasdaq closed even higher on Thursday. When stocks rally on bad news, it’s a sign that times are changing. Not to mention that the Nasdaq Composite had its 3rd straight positive close since August.
Large-cap stocks again led the charge including Cisco (CSCO), Dell Computer (DELL), Sun Micro (SUNW), JDS Uniphase (JDSU), and Microsoft (MSFT). The Dow, after being in the red most of the day, was able to finish positive, propelled by its tech components.
The Nasdaq Composite surged 116 points to close at 2,640. Volume was a heavy 2.7 billion shares, with 67 new highs compared to 26 new lows. Blue chips were pressured most of the day but rallied again in the last hour as the Dow gained 5 points to finish at 10,609. Volume on the Big Board was 1.3 billion shares with 178 stocks making new highs compared to 17 new lows.
The action the past few days has pushed the Nasdaq Composite and the Semiconductor Index (SOX) into tough resistance areas. With the bad news from Gateway (GTW) and Hewlett-Packard (HWP), traders may take some profits off the table. However, the scenario is beginning to shift to where fund managers, especially those that are light in tech stocks, will begin to buy the dips.
From a technical standpoint, the Semiconductor Index (SOX) pushed off of support at 630, with resistance in the 730-750 area. Support on the Nasdaq Composite stands at 2,500, with resistance at 2,800. The Nasdaq and SOX on a daily basis:
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America Online (AOL) and Time Warner (TWX): The FCC announced conditional approval of the marriage of the 2 companies, mostly requiring the companies to take steps to open AOL’s popular Instant Messaging service to rival providers.
Hewlett-Packard (HWP): Company warns for Q1. Sees EPS of $0.35-0.40 vs. current EPS estimate of $0.42; cites a worsening economic conditions and a deceleration in corporate and consumer IT spending in recent weeks, primarily in the U.S.
Ariba (ARBA): Reports Q1 earnings of $0.05 a share, $0.03 better than the First Call consensus of $0.02. Revenues rose 624.9% to $170.20 mil from a year-ago of $23.48 mil.
Company also issues upside pre-announcement for Q2. Sees EPS of about $0.06 and revenues in the range of $180-$185 mil; current EPS estimate is $0.04.
Gateway (GTW): Reports Q4 earnings of $0.12 a share, $0.25 worse than the Zacks consensus of $0.37, vs year-ago earnings of $0.38. Revenues fell 6.9% to $2.37 bil from a year-ago of $2.55 bil. Company to lay off 10% of workforce to cut costs. Cites a continued deterioration of worldwide PC demand and increasing pricing pressure, both of which are expected to continue at least through the first half of this year
Rambus (RMBS): Reports Q1 earnings of $0.12 a share, $0.01 worse than the First Call consensus of $0.13, vs year-ago earnings of $0.09. Revenues rose 190.5% to $34.72 mil from a year-ago of $11.95 mil. Note: Because of the Company's substantially increased level of profitability and limited tax reduction opportunities, the tax rate for fiscal 2000 has been increased to 40% from 35% last year. If the previous 35% tax rate were still applicable, the earnings for the quarter would have been higher by $0.01 per share.
TriQuint Semi (TQNT): Company issues upside preannouncement for FY00. Sees revenues above estimate; current EPS estimate is $0.79.
DoubleClick (DCLK): Reports Q4 net of breakeven, $0.02 better than the First Call consensus of ($0.02); revenues rose 41.2% to $132.30 mil from a year-ago of $93.69 mil. Company warns for Q1. Sees a loss of $0.07-0.09 per share vs current estimate of a loss of $0.06. Revenues expected to be $110-115, gross margin 52-55%. |
