Lots news this AM.
08:49 ET Pre-Paid Legal (PPD) 19.00: Discloses in SEC filing that the SEC's Division of Corporation Finance reviewed the company's 1999 and 2000 10-Ks. On May 11, PPD received a letter advising that it was the position of the Division that the company's accounting for commission advance receivables is not in accordance with GAAP.
08:46 ET Sycamore Ntwks (SCMR) 9.32: -- Update -- Morgan Stanley says despite negative data points from the quarter and lack of visibility, would be buyers of the stock. Though the next 2 qtrs could be challenging, SCMR's new products position them for a medium-term recovery. Valuation looks attractive.
08:39 ET Gapping Up : RNWK+5.5% (Sony integration pact)... SAWS +4% (agrees to be acquired by TQNT in stock-stock deal; seeing 16% premium eroded by pre-market weakness in TQNT)... BEAS +3.5% (lifts after reporting in line results and raising guidance)... KREM +3% (tops estimates; raises forecasts, again)... BKHM +3% (benefiting from rumor that CY is kicking the tires).
08:35 ET Intel (INTC) 27.20: Hearing from sources at CSFB that the firm is saying that Intel's quarter is running 30% behind plan and recommends selling the stock. INTC 26.85 pre-market.
08:31 ET Economic Data : April CPI rises 0.3%, compared to 0.4% consensus. The Core CPI (ex food and energy) rose 0.2%, in line with expectations. Housing starts rose 1.5% to a 1.609 mln rate, slightly above the 1.6 mln rate anticipated by economists. Modest uptick in the futures on back of numbers.
08:30 ET RF Micro Device (RFMD) 28.71: Trading down 1 pt pre-market amid fears that a merged TQNT/SAWS will be a formidable competitor for RFMD; Bear Stearns' Ripple Effect notes that while RFMD supplies modules, it still doesn't have saw filters (does design only). Other competitors noted by Bear: AHAA, ANAD, CNXT..
08:24 ET Capex Cuts : This morning's Cisco rumors and the general pressure being seen in the telecom equipment sector are no doubt tied to the continued bad news on the capex front: both Sprint (FON) and 360Networks (TSIX) announced capex reductions last night, continuing a stream of such announcements over the past month.
08:21 ET Solly Fades Homebuilders : Salomon Smith Barney recommending that investors take profits in the recently hot homebuilding group; firm out with downgrades of BZH, WBB, RYL, HOV (Neutral from Outperform); lowers SHLR and MDC to Outperform from Buy.
08:20 ET Redback Ntwrks (RBAK) 15.60: Hearing from sources at CSFB that Redback presented at the CSFB conference last night, and that there was more evidence of traction issues for RBAK's SmartEdge product vs Cisco's (CSCO) Cerent product. SmartEdge revenues had been expected up sequentially but are not expected flat/down.
08:17 ET Cisco Systems (CSCO) 18.74: There have been rumors on European trading floors that Cisco may announce a cut in its order book; these rumors are now making their way around US trading floors and have been reported by both Bloomberg TV and BridgeNews. There is no confirmation of these rumors and they are unlikely to be true given that we're only two weeks into Cisco's July quarter. Cisco down to 18.24 pre-market.
08:02 ET Brocade Comms (BRCD) 42.50: After the close, company reported Q2 earnings of $0.05, in line with reduced expectations... Merrill Lynch slashes FY02 earnings forecast to $0.56 (p/e 76) from $0.92 and revenue est. to $0.723 bln from $1.21 bln to reflect more realistic rates of growth; feels revised numbers are already priced into the stock.
07:53 ET BEA Systems (BEAS) 34.04: ABN AMRO upgrades to BUY from Add following earnings report last night.
07:47 ET Check Point Sftwr (CHKP) 54.91: Lehman downgrades to BUY from Strong Buy and lowers price target to $70 (from $110); believes increasing competition from Cisco and others in the service provider VPN market is likely to cap upside to numbers and compress multiple over time; recent price promotions suggest near-term customer demand remains an issue.
07:43 ET Comm IC Downgrades : Goldman Sachs downgrades communications chip names AMCC, PMCS, VTSS to MKT OUTPERFORM from Trading Buy; more likely to see adverse news flow out of sector during the next six weeks; while stocks provide interesting trading vehicles given volatility, believes high valuations and limited visibility will likely cause the trading range to trend lower in the near-term.
07:37 ET Sonus Networks (SONS) 27.60: After the close, announced that Japanese carrier Fusion Communications has deployed Sonus' voice infrastructure solutions as the foundation of its next-generation voice network, which began delivering live traffic last month.
07:32 ET Opening Indications : This morning's fair value figures -- S&P 500 fair value: 1253; closed 5 pts above fair value. Nasdaq 100 fair value: 1803; closed 14 pts above fair value. Current indications: S&P 500 futures are -9.0, or 4 pts below fair value. Nasdaq 100 is -42.5, or 28.5 pts below fair value... Tech sector under pressure this morning after TSIX slashed capex plans by approx. $1.5 bln; a major call on the communications chip space also weighing on tech.
07:20 ET Sycamore Ntwks (SCMR) 9.32: WR Hambrecht feels that major capital spending reduction announced last night by 10% customer 360networks (TSIX) dramatically underscores the near-term risk profile for Sycamore Networks, which counts a number of emerging carriers as customers; sees little in the way of catalysts for shares over the near term; expects stock to tread water in the high single digits.
07:17 ET Whole Foods (WFMI) 53.16: UBS Warburg upgrades to BUY from Hold after meeting with management; believes that WFMI can beat its own sales targets for the 2nd-half given management's emphasis on providing conservative guidance and its desire to over-deliver relative to expectations.
06:55 ET RealNetworks (RNWK) 8.80: Announces strategic alliance to imbed RealNetworks software in the PlayStation 2 gaming console; will allow current and future PlayStation 2 owners to access streaming and downloadable audio and video content. |
