Updated: 08-Jun-01
General Commentary
So much for the market sweating the Intel mid-quarter review, or the earnings warning from Broadcom... Chip sector, as measured by the Philadelphia Semiconductor, or SOX, index rallied 7.7% to 697.04... Pacing the gain were Intel (31.16 +1.34) and Broadcom (BRCM 40.24 +4.67), with the former advancing 4.5% and the latter jumping 13.1%.
The BRCM warning had little impact because, as we noted on our Story Stocks page yesterday, the news was in the stock... As for Intel, the company just announced that it sees Q2 results within previously reported ranges, though hints that number tracking slightly below the mid-point of that range... Given that many on the street had feared a warning from INTC, tonight's mid-quarter meeting likely to give the stock and the group and additional bounce.
The pattern being set so far this warnings season is that investors are shrugging off Q2 bad news as long as news isn't much worse than expected... Should warning be accompanied by any hint that conditions have bottomed/are improving, stocks actually getting bid higher... Broadcom a perfect example of this pattern.
Tech sector's ability to hold up in the face of trouble may not make sense to some, but it definitely sends a message to professional traders - that message, long or wrong.
Robert Walberg |
