From Briefing.com: 11:30AM : The Dow and Nasdaq continue to head lower after initial excitement over the Consumer Confidence report... The Nasdaq was able to pierce resistances at 1180 and 1185. However, the inability to get follow through beyond 1193/1196 leaves the door open to supports at 1166 and the 1150 area...
The market is moving lower, despite the U.S. government lowering the national terror threat to 'elevated' from 'high.' Paper stocks are under pressure as Weyerhaeuser (WY -13%) lowered guidance by a good amount. Overall, techs and biotechs are showing good relative strength while the cyclicals and most safe haven sectors are lower.SOX +0.8%, NYSE Adv/Dec 941/2070, Nasdaq Adv/Dec 1133/1769
New lows swamp new highs Nasdaq has 4 new highs versus 266 new lows -- NYSE has 29 new highs versus 276 new lows.
11:08AM Benchmark Elec (BHE) 22.45 +0.60: Merrill Lynch initiated with a Neutral, due to healthy stock price valuation with limited upside potential, as well as, company's high exposure to Sun Microsystems at more than 50% of sales.
10:35AM Market helped by Fed? : Hearing some talk that the market's resilience this morning is due in part to hopes for a Fed rate cut today. As we noted in our 7:26 comment, the admittedly small chance of a rate cut could indeed promp some buying today; traders might look at it as a low risk gamble: since no rate cut is expected, the downside isn't that great, while the short-term upside is quite good in the event of a surprise move. We still don't expect Fed action, but it's believable that some are taking a flier on it.
10:03AM Consumer Confidence better than expected : Confidence fell slightly in September, but the August reading was revised higher to 94.5 from 93.5, thus leaving the Sep reading a bit above the market consensus as well; 93.3 vs 92.4. Present situation deteriorated a bit, while expectations improved. The market has benefitted from this report: Dow -64, Nasdaq +4.
9:42AM Intel motherboard shipments being raised (INTC) 14.22 +0.09: Stock holding up well in a weak market; hearing that several brokerage firms (Piper, Salomon) are upping their estimates for September motherboard shipments, apparently the first uptick in some time; Piper analyst Ashok Kumar now sees Sep shipments up 13-14% vs prior estimate of 10% and sees low risk of further Q3 earnings disappointment.
8:58AM Dell Computer announces agreement with Lexmark (DELL) 24.19: Dell and LXK announce an agreement to develop and produce Dell inkjet and laser printers and aftermarket cartridges that will be sold directly to customers. There has been speculation for months about how Dell would enter the printer market, with some suggesting they might acquire LXK; this deal should end that speculation for now, and answers the question of what type of competition Hewlett (HPQ) will face from Dell in the printer market.
8:27AM Novellus estimates cut at BofA (NVLS) 20.77: Banc of America cuts 2002-03 ests based on the assumption of a sharper decline in bookings; believes co will miss their guidance of $200-220 mln in new orders for Q3 (new est is $185 mln), citing cancellations as the likely reason for the shortfall; believes UMC has cancelled 60% of their outstanding orders across the industry, and orders could decline another 20% in Q4 to $150 mln; cuts 2002 est to $0.12 from $0.15 and 2003 to $0.00 from $0.31 (both well below consensus).
7:54AM General Electric estimates cut by JP Morgan (GE) 26.40: JP Morgan cuts GE's 2003 est to $1.70 from $1.76 (below consensus of $1.79) based on a combination of lower than expected short cycle leverage, greater pressure on long cycle businesses, and a more conservative view of GE Capital.
7:51AM Newport downgraded at CSFB (NEWP) 13.90: CSFB downgrades to UNDERPERFORM from Neutral and cuts price target to $10 from $17, citing valuation and a slower than expected semi recovery.
7:26AM FOMC meeting today : The FOMC meets today and announces its decision at about 14:15 ET; the market has all but ruled out a rate cut at today's meeting and a steady policy with a continued easing bias is indeed the best bet. Clearly, there is some small chance of an easing and market weakness adds to that possibility, so it's possible that hopes for a surprise cut increase just ahead of the announcement.
7:24AM Micron estimates slashed at CSFB (MU) 12.76: CSFB slashes FY03-04 ests before tonight's earnings release, citing more conservative ASP assumptions and a substantially lower bit growth est for 2004; cuts FY03 rev/EPS ests to $3 bln/($0.81) from $4.6 bln/$0.49 (consensus $4.2 bln/$0.34), and cuts FY04 to $3.8 bln/($0.08) from $8.1 bln/$2.05 (consensus $6.7 bln/$1.91); firm also cuts price target to $16 from $23.
7:15AM Cisco Systems customers have more trouble projecting climate: Chambers (CSCO) 11.96: At the Banc of America conference yesterday, CEO John Chambers reportedly said that Cisco's customers are having more trouble projecting the coming business climate; he did not comment specifically on Cisco's business.
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