RECAP & STOCKS TO WATCH FOR TUESDAY, 2-6-01
Nasdaq stocks slumped for a second straight day as traders bided time waiting for tech giant Cisco Systems’ earnings and guidance report, due out after the close on Tuesday. In the tech sector, chip stocks were the hardest hit on a report from the Semiconductor Industry Association that it’s unlikely that its projection of 22% growth in 2001 chip sales will be met due to inventory build-up. The SOX posted a 4.1% loss, its third consecutive losing day. However, the red ink was stopped as issues moved well off session lows before the close. The Dow finished with a triple-digit gain as investors rotated out of tech shares and into more defensive cyclical stocks, such as Coca-Cola, Eastman Kodak, DuPont, General Electric, Philip Morris, and AT&T.
The Nasdaq Composite slipped 17 points to close at 2,643. Volume was 1.6 billion shares, with decliners beating advancers by 22 to 16. Blue chips rallied as the Dow surged 101 points to finish at 10,965. Volume on the Big Board was 1 billion shares with advancers beating decliners by 16 to 14.
On Tuesday, all eyes will be on bellwether Cisco (CSCO), which is scheduled to report earnings after the close on Tuesday. The question is whether the market has already priced in a bad report, in which we can expect institutions to buy on any weakness, or will Cisco’s expected cautious forward guidance be a continuous black cloud?
From a technical standpoint, the Nasdaq Composite broke both its 20-day and 50-day Moving Averages. Next support stands at 2,500, a 62% retracement of the January 3rd to January 31st rally, with resistance at 2,900-3,000. The index was able to hold 2, 600 today and formed a “dragonfly doji,” indicating a possible reversal back up. Support on the DJIA stands at 10,700, and the index appears to be consolidating just under resistance at 11,000. The Semiconductor Index (SOX) broke support at 685, the index’s 20-day Moving Average, with new support at 635. Resistance stands in the 750 area.
The Nasdaq Composite on a daily basis: tradewindsonline.net
Earnings Spotlight: Another full week of earnings for traders to digest with the following companies due to report: Cisco Systems (CSCO), XO Comms (XOXO), CNET (CNET), and Micro Strategy (MSTR) on Tuesday, Aether Systems (AETH) and Electronic Data Systems (EDS) on Wednesday, and WorldCom (WCOM), Network Appliance (NTAP), and ONI Systems (ONIS) on Thursday, and Plug Power (PLUG) on Friday.
SERENA Software (SRNA): Company warns for Q4; sees $0.24-0.25; current EPS estimate is $0.25.
Commscope (CTV): Reports Q4 earnings of $0.43 a share, $0.01 better than the First Call consensus of $0.42, vs year-ago earnings of $0.38. Revenues rose 17.2%, to $247.97 mln from a year-ago of $211.65 mln. Company warns for Q1, seeing EPS of $0.32-0.36 vs current EPS estimate of $0.39.
Radware Ltd (RDWR): Reports Q4 earnings of $0.12 a share, $0.02 better than the First Call consensus of $0.10, vs year-ago earnings of $0.03. Revenues increased to $12.3 million, an increase of 145% compared with $5.0 million from the same period of 1999.
TriQuint Semi (TQNT): Reports Q4 earnings of $0.27 a share, $0.03 better than the First Call consensus of $0.24, vs year-ago earnings of $0.12. Revenues of $90.3 mln, represented an 83% increase over the $49.4 mln in the comparable period of 1999.
Computer Sci (CSC): Reports Q3 earnings of $0.72 a share, $0.02 worse than the First Call consensus of $0.74, vs year-ago earnings of $0.66. Revenues rose 12.9%, to $2.66 bln from a year-ago of $2.36 bln.
Razorfish (RAZF): Company announces restructuring that will include the elimination of approximately 400 positions worldwide.
Oxford Health (OXHP): Reports Q4 earnings of $0.59 a share, $0.10 better than the First Call consensus of $0.49, vs year-ago earnings of $0.32. Revenues rose 0.4% to $1.04 bln from a year-ago of $1.03 bln.
Affymetrix (AFFX): Reports Q4 loss of $0.06 a share, $0.05 better than the First Call consensus of ($0.11). Revenues rose 70.1% to $59.42 mln from a year-ago of $34.93 mln.
ADC Telecom (ADCT): Announces the acquisition of CommTech Corp, provider of end-to-end service order management, provisioning and activation software for communications service providers. ADC will issue approximately 13.25 mln shares of stock for CommTech. Based on ADC's closing price of $14.00 per share on February 2, 2001, the transaction would have a value of approximately $185.5 mln. |
