--------------------------------------------------------------------------------
Updated: 14-Dec-01
General Commentary
A shift in the news cycle could prompt the first meaningful
correction in techs since late September... Spooked by
sales/earnings warnings from Lucent (LU), Ciena (CIEN),
Qwest (Q), Macrovision (MVSN) and Macromedia (MACR), and by
the weakest Retail Sales report (-3.7%) since records have
been kept (1992), investors decided to cash in some of those
recently won gains... Nasdaq shed nearly 65 points, or 3.2%,
falling to its lowest level since 12/3/01... More
significantly, there was no late buying in today's action,
as the tech-heavy index closed just off its session low.
Taking into account the soft close, Oracle's unimpressive
post-close earnings report, renewed fears over timing of
economic/earnings recovery and beginning of warnings season,
investors no longer feeling the same urgency to buy
stocks... But will a lack of buying interest open door for
sellers to retake control of the sector/market? Anything's
possible, but Briefing.com no longer sees a retest of the
Sept lows as a likely scenario... Granted the changing news
tone could keep downward pressure on index for a few more
days, but strength of recovery rally, lack of attractive
investment alternatives, more favorable earnings comps going
forward and sketchy but growing evidence that economy has
bottomed all point to renewed gains... In fact, after a
brief period of consolidation, Briefing.com expects techs to
help power overall market to new recovery highs.
Valuations and lingering concerns over economy will keep
next phase of rally from getting carried away...
Nevertheless, Briefing.com suggests that investors stay the
course and continue to phase in buying of quality,
leadership names with solid balance sheets and strong
management teams... Candidates include Siebel (SEBL), Sun
Micro (SUNW), Microsoft (MSFT), Applied Materials (AMAT),
Symantec (SYMC), Intel (INTC), Checkpoint Software (CHKP),
Apple Computer (AAPL), Qualcomm (QCOM), Corning (GLW), Nokia (NOK) and IBM. |
