RECAP & STOCKS TO WATCH FOR THURSDAY, 3-1-01
The Nasdaq Composite took a new leg down on Wednesday as Fed Chief Greenspan’s testimony before the House Financial Services Committee left traders and investors disappointed that an inter-meeting rate cut is unlikely. All sectors bled red, with the most pronounced declines in the chip, software, and Internet sectors.
The stock market, which has reacted to every eye blink by the Fed, moved lower following Greenspan’s testimony, in which he admitted that consumer confidence had weakened and “will require close scrutiny in the period ahead,” but the data suggests “that consumers have retained enough confidence to make longer-term commitments.”
The Nasdaq Composite fell another 55 points to close at 2,151. Volume was 2.08 billion shares, with decliners outpacing advancers by 23 to 14. Blue chips followed the techs as the Dow lost 141 points to finish at 10,495. Volume on the Big Board was 1.1 billion shares with decliners beating advancers 17 to 14.
A term that we haven’t heard for awhile will probably surface again soon- “value stocks.” Many of the tech stocks are going to be seen as value stocks vs. their growth rates, granted that they don’t issue more cautious future guidance.
From a technical standpoint, the Nasdaq Composite broke support at 2,200, with next support at 2,000 and resistance at 2,300. The Dow reversed off the doji it formed on Tuesday, and appears to be in a trading range between 10,300 and 10,700. The Semiconductor Index (SOX) broke support at 550, with new support in the 500 area.
Lam Research (LRCX): Company warned for March quarter, saying revenues could decline as much as 15% which would result in an impact to earnings. Attainment of previous guidance of $480.0 to $490.0 mln in revenue is at risk. Companies that could be affected by this warning include AMAT, KLAC, and NVLS.
Gateway (GTW): Company warned for Q1, seeing EPS about breakeven before charges vs. current EPS estimate of $0.17. Company also restated 2000 results and announced the sale of $500 mln in receivables.
3Com Corp (COMS): Company warned for Q3, seeing revenues below estimates. Revenues will be in the range of $625 to $640 mln, with pro forma net loss anticipated to be approximately $135 to $145 mln. 3Com attributes its sales shortfall primarily to U.S. economic conditions and the continuing impact of the slowdown in the telecom sector that have led to reduced demand for products across most of the company's business segments
WorldCom (WCOM): CNBC reported that The Wall Street Journal said WCOM is cutting 6-7% of workforce. |
