From Briefing.com: Close Dow +77.82 at 7501.49, S&P +13.24 at 798.53, Nasdaq +9.72 at 1129.22: An interesting day...solid up open with Dow +110 attributed to positive European reaction to Bush's Iraq-related speech last night...then the selling took hold right away and the Dow was down over 61 points at mid-day for a 170 point swing as it appeared that the underlying bearishness would again prevail...but wait...word came that Bush would invoke Taft-Hartley for an 80 day "cooling off period" and thereby open the west coast ports...the market trended higher the rest of the way and with just over an hour to go the Dow was +199...
even with that move, however, the rally was centered on big cap stocks, and there was little breadth to the move as declining issues lead advancing issues throughout...the S&P mid-cap index was trailing the S&P 500 index significantly, and the Russell 2000 small cap was up only 0.6%..so, the talk was of a "lack of conviction" and possible sell-off tomorrow...such attitudes helped erase a chunk of the gains in the final hour...ultimately, it is indeed a badly needed solid up day, but it was also a shallow rally of questionable duration...
within sectors, drugs (DRG) posted a strong gain of 2.6% as Lehman upgraded the sector, retail (RLX) rose 4.7% on the opening of the ports, and banks (BIX) rocked +4.6% as well...on the down side, autos were hurt by a CSFB sector downgrade and Ford (F 7.75 -0.75) and General Motors (GM 33.60 -2.28) were hit...usually off the radar screen, the Dow Utilities Index raised some warning flags about corporate stability as Allegheny Energy (AYE 3.80 -3.72) announced a technical default on credit agreements...Dominion Resources (D 41.81 -5.94) and TXU Corp (TX 17.10 -5.55), both in the Dow 15 Utilities, followed suit...
key stock moves included PepsiCo (PEP 41.26 +5.48) up over 15% simply by reporting earnings a penny ahead and giving a decent outlook, but Philip Morris (MO 36.15 -2.43) took a hit on a downgrade from Merrill Lynch...within techs, Cisco (CSCO 8.60 -0.48) took a hit as Bear Stearns cut estimates...DJTA +2.8%, DJUA -6.0%, Russell 2000 +0.6%, SOX -1.9%, S&P Midcap 400 +1.5%, NYSE Adv/Dec 1534/1721, Nasdaq Adv/Dec 1630/1765
3:58PM Dell Computer (DELL) 25.30 +0.35: Pacific Crest echoes the sentiment of most analysts and investors and initiates coverage with a Buy rating and $30 price target. Firm believes DELL is attractively priced with 21% projected growth in earnings, a solid balance sheet (with $8.1 bln in net cash), and extensive opportunities for growth in new mkt segments. Pacific Crest expects DELL to grow in the mid-to-high teens based on the move to modular computing and continued market share gains, despite an expected slow-down in industry growth.
3:55PM Thomas Weisel on Storage Networks : Despite momentum built in early summer, storage business has worsened markedly in Q302; firm lowers industry's growth estimates due to expected pickup in IT spending shifting to Y04 from Y03. Despite plummeting storage prices, firm thinks bold valuation-based calls are not yet timely; believes consensus estimates for most companies still appear increasingly optimistic, with significant room for downward revisions; such scenarios include: Brocade (BRCD 5.43 +0.01), McData (00C0 4.53 -0.06) and Inrange (INRG 1.86 -0.39), all of which are likely to post significantly lower Y03 revenue growth than currently reflected by consensus. Firm maintains Veritas (VRTS 12.72 +0.44) as top pick; thinks company will continue gaining market share; reiterates Buy rating.
3:00PM Market Action : What's behind the afternoon rally? We attribute the combination of buyback news from IBM, indication that Pres Bush will intervene in dockworker "lockout," and earnings guidance from SBC that was generally positive. Also, active accounts have been sensing that a short-term bottom was near as the market pushed into deeply oversold territory from a short-term technical basis. These active accounts include short sellers, many of whom are deciding to lock in profits here and either 1) get long, 2) move to the sideline in anticipation of a better shorting opportunity.
12:16PM IBM buying back shares today (IBM) 55.21 -1.65: -- Update -- Dow recovers about 20 pts over the past minute or so. Traders citing Bloomberg report that IBM will be buying back shares today. An IBM spokesperson is cited.
11:45AM Broadcom (BRCM) 9.79 +0.09: Legg Mason is transferring coverage and upgrading to BUY from Hold rating with price target of $19, believing BRCM is a premier company in the communications semiconductor industry, providing investors unique exposure to a mix of growing end markets and solid management execution; co. has continually demonstrated its ability to identify emerging opportunities and then effectively direct its assets to capitalize on that potential; also BRCM is likely to be a key beneficiary of the equipments industry increased usage of outsourced manufacturing.
11:12AM Qualcomm Intraday (QCOM) 27.90 -1.59: -- Technical -- Over the last seven sessions QCOM has been vacillating between its multi-month range top 30/31 and its 50 day sma (27.81 today). The moving average is currently being tested with first support, it taken out at 27.50 with a secondary short term barrier at 26.98
11:16AM Marvell (MRVL) 14.10 +0.42: Stock up 3% as, before open, Legg Mason initiated with a Buy rating and price target of $23. Firm citing: belief valuation multiples are more attractive when considering that CY03 sales and earnings estimates are likely low; co. is poised to be the largest beneficiary of the transition of desktop PCs from Fast Ethernet to Gigabit Ethernet; MRVL should also derive significant growth from read channel market share wins in the desktop market.
10:29AM Dell Computer (DELL) 24.97 +0.02: Stock slightly higher in early trading. Before open, Pacific Crest initiated with a Buy rating and price target of $30, saying DELL is attractively priced, with 21% projected growth in earnings, a solid balance sheet, with $8.1 bln in net cash, and extensive opportunities for growth in new market segments. While expecting growth in the computer-systems market to remain in the single digits over next five years, firm thinks Dell should grow in the mid-to-high teens based on the move to modular computing and continued market share gains.
9:49AM ATI Tech chip to be used in new Hewlett-Packard, Fujitsu notebooks (ATYT) 4.34 +0.15: Announces that its Radeon IGP 320M will be used in HPQ's new Evo N1015v series notebook and as well as Fujitsu Siemens Computers's Amilo A Series consumer notebook.
9:21AM Applied Materials: Q4 revs could come in lighter than expected - Lehman (AMAT) 10.87: Lehman says they could envision a scenario where Q4 revenues could come in lighter than expected due to order pushouts and cancellations; if this proves to be the case, firm would expect AMAT to preannounce rather than post weaker than expected results on its Nov 13 conference call; says shares still look expensive at a price-to-sales multiple of 3.8x, a healthy premium to the overall sector.
8:37AM Cisco Systems estimates cut at Bear Stearns (CSCO) 9.08: Bear Stearns cuts FY03-04 ests below consensus for CSCO based on the belief that business is likely tracking below plan on the top-line across all major geographies, and that there is a chance that the miss could be much larger than the Street is estimating; cuts FY03 rev/EPS ests to $18.3 bln/$0.52 from $20.2 bln/$0.56 and FY04 to $20.5 bln/$0.56 from $22.9 bln/$0.61 (both well below consensus).
8:07AM McDATA trims rev guidance; EPS seen above consensus (MCDT) 4.59: Company lowers Q3 revenue guidance to a range of $80-$81 mln from previous view of $83-$84 mln (Multex consensus $83.41 mln). Despite the lower rev guidance, co expects EPS of breakeven to a loss of $0.01 vs previous loss guidance of ($0.01)-($0.02). The Multex consensus is -$0.02.
7:50AM Samsung clearing out DRAM inventory - Digitimes : Digitimes.com reports that Samsung has been stuffing current inventory supply of die to module-making customers and has been selling DRAM modules on the spot mkt at cut-rate prices; move was reportedly prompted by Samsung's desire to be free of inventory by early next month so that it can bargain for higher contract prices; in addition, many DRAM makers are less than optimistic about the Q4 DRAM mkt, which may have also sent them scrambling to clear inventory. (Watch MU for a potential negative reaction.)
7:41AM IBM estimates cut at Goldman Sachs (IBM) 56.86: Goldman Sachs cuts 2002-03 EPS ests based on expectations that IT spending will remain sluggish at least through 1H03; in addition to weak IT spending, firm expects a drop-off in IP trasaction-based royalties as well as incremental pension-related expenses to negatively affect earnings; on the other hand, revised model shows improved profitability in IBM's microelectronics biz and slightly more savings from restructuring; cuts 2002 to $3.90 from $4.00 and 2003 to $4.30 from $4.50 (both slightly below consensus).
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+ATYT+BRCM+BRCD+CSCO+DELL+IBM+INTC+INRG+KLAC+LLTC+LSCC+LSI+MCDT+MOT+MRVL+MU+MXIM+NSM+NVLS+QCOM+TER+TXN+XLNX+^VIX+^IXIC&d=t
RtS |
