RECAP & STOCKS TO WATCH FOR THURSDAY, 3-8-01
Profit warnings from both JDS Uniphase (JDSU) and Broadcom (BRCM) were overshadowed by bullish comments by Goldman Sachs strategist Abby Joseph Cohen that helped to propel the Nasdaq Composite and the Dow to their 3rd and 4th consecutive positive days respectively. Cohen raised her recommended equity exposure to 70% from 65%, while reducing her cash position to 0 from 5%. “We believe that attractive equity valuation has been restored and forecast year-end 2001 price levels of 1,650 and 13,000 for the S&P and Dow Industrials, “ Cohen said in a note to clients. This represents a 31% increase for the S&P and a 22% increase for the Dow from current levels.
The Nasdaq Composite gained another 19 points to close at 2,223. Volume came in at 1.77 billion shares, with advancers beating decliners by 20 to 17. Blue chips followed the techs as the Dow gained 138 points to finish at 10,729. Volume on the Big Board was 1.11 billion shares with advancers beating decliners by 19 to 12.
From a technical standpoint, the Nasdaq Composite has support at 2,100 with a downside gap between 2,163 and 2,200. The Nasdaq needs to break resistance at 2,300 for any type of follow-through rally, otherwise a lower high will have been put in. The Dow pushed through resistance at 10,700, the top of its trading range. The Semiconductor Index (SOX) is consolidating just under resistance at 650.
Yahoo! (YHOO): Company warned for Q1, guiding Q1 EPS to breakeven from the current consensus of $0.05, and revenues down to $170-180 mln from roughly $230 mln. Company cited weak economic and advertising environment and shift from dot-com to traditional advertiser base. Chairman and CEO Koogle will step down as CEO but remain as Chairman, and company will also buy back $500 mil in stock.
Krispy Kreme (KREM): Company announced it will begin trading on the NYSE on May 17 under the symbol KK.
TIBCO Software (TIBX): Company warned for Q1, seeing revenues of $80 to $84 mln vs. consensus mean of $88.45 mln. Company cited slowing U.S. economy, combined with delayed IT spending.
Cree (CREE): Company reaffirmed Q3 guidance of $0.18 and revenue of approximately $52 mln, but warned for Q4, seeing EPS of $0.14-0.16 vs. current EPS estimate of $0.20. Company cited increasingly competitive and slowing market for LED chips.
Tellabs (TLAB): Company warned for Q1, seeing EPS of $0.35-0.38 vs. current EPS estimate of $0.38. Tellabs projects first quarter sales in the range of $830 million to $865 million, compared with prior guidance of $865 to $890 mln. |
