RECAP & STOCKS TO WATCH FOR THURSDAY, 2-1-01
The major indexes diverged today as traders and investors digested the latest decision by the FOMC to cut short-term rates by an expected 50 basis points, and also to retain its easing bias. Volatility increased dramatically on the news, as a battle ensued between those who had been looking to sell the news, and those who were looking to buy the dips. Chip stocks once again showed resilience, even after a warning by Applied Materials (AMAT), which said revenues would be 7-10% below expected levels, causing it to miss Q1 EPS estimates.
The Nasdaq Composite sank 65 points to close at 2,772. Volume was 2.4 billion shares, with 138 new highs compared to 18 new lows. Blue chips managed a small gain as the Dow added 6 points to finish at 10,887. Volume on the Big Board was 1.2 billion shares with 256 stocks making new highs compared to 3 new lows.
Although the rate cut was expected and factored somewhat into the markets, the bigger picture shows that the Fed is acting aggressively to keep the economy alive, which should help to maintain the recovery we’ve seen in stocks.
From a technical standpoint, the Nasdaq Composite has formed another “evening star” on the daily chart, indicating a short-term reversal. Support on the Nasdaq Composite stands at 2,700-2,680, with resistance at 2,900-3,000. Support on the Semiconductor Index (SOX) stands at 675, the index’s 20-day Moving Average, with resistance in the 750 area.
The Nasdaq Composite on a daily basis: tradewindsonline.net
Earnings Spotlight: This week is another heavy earnings week with the following companies scheduled to report: Avocent (AVCT), Sprint FON (FON), Incyte Pharms (INCY), Silicon Storage (SSTI) on Thursday.
Kana Comms (KANA): Company's CFO, Brian Allen has resigned for personal reasons. Kana is actively searching for a replacement, and, in the interim, CEO Jay Wood will assume the role of CFO. The departure follows the unexpected resignation of former CEO, Michael McCloskey earlier this month.
Digital Lightwave (DIGL): Reports Q4 earnings of $0.40 a share, $0.14 better than the First Call consensus of $0.26, vs year-ago earnings of $0.13. Revenues rose 94.2% to $33.92 mln from a year-ago of $17.47 mln.
StorageNetworks (STOR): Reports Q4 loss of $0.36 a share, $0.08 better than the First Call consensus of ($0.44). Revenues rose 577.7% to $21.24 mln from a year-ago of $3.13 mln.
Wink Comms (WINK): Reports Q4 loss of $0.47 a share, $0.06 worse than the First Call consensus of ($0.41). Revenues rose 240.4% to $1.74 mln from a year-ago of $0.51 mln. Company warns for FY01, seeing loss of $1.75-1.85 vs current EPS estimate of ($1.27).
Cerner (CERN): Reports Q4 earnings of $0.21 a share, $0.02 better than the First Call consensus of $0.19, vs year-ago earnings of $0.09. Revenues rose 33.2% to $119.57 mln from a year-ago of $89.74 mln. Company issues upside preannouncement for FY01, seeing EPS of $0.80-0.85 vs current EPS estimate of $0.79.
webMethods (WEBM): Reports Q3 earnings of $0.05 a share, $0.04 better than the First Call consensus of $0.01. Revenues rose 237.5% to $59.38 mln from a year-ago of $17.59 mln. |
