Close Dow +12.49 at 8398.49, Nasdaq +11.71 at 1361.27, S&P -0.42` at 882.53: [BRIEFING.COM] If you view the finally tally for the market averages it looks like it may have been a relatively quiet session with little taking place. However, the indices were all over the highway. Early action was weak with the negativity associated with the late slide yesterday, overseas losses and some negative news (SGP -4%-- subpoenas; C -3.8%-- Salomon flap continues; SBC -2.7%-- estimate cuts) weighing. The market was also taking a cautious approach in front of Greenspan's testimony to the Joint Economic Committee. While the chairman did give a lengthy list of reasons for the 50 bp cut rather than 25 bp, which seem to apply some pressure initially, the averages began to work higher slowly higher thereafter. The recovery rally received a significant boost with the announcement from Iraq that they will accept the UN resolution on weapons inspections. This news was generally expected but the timing was not which provided the news driven surge. Once again the market failed to build on a move and given the litany of reasons that the Fed chair cited, it was difficult for participants to become overly aggressive. A steadily erosion was noted through much of the afternoon but participants again proved unwilling press the issue allowing the late push back to near unchanged levels. Volume was on the heavier side with market internals mixed to slightly firmer. SOX +0.4%... DOT +1.3%... XOI -2%... BTK -0.7%... NYSE Adv/Dec 1561/1687... Nasdaq Adv/Dec 1657/1622.
3:27PM QLogic weakness (QLGC) 38.07 -0.27: Trading floors scrambling to explain QLGC weakness (particularly relative to competitor ELX) have seized on the 10Q filed today, and in particular a paragraph about the risks associated with customer concentration. However, this paragraph is identical to the last 10Q, and we have found nothing else of note in today's filing.
1:57PM Nasdaq tests support at 1,360 : -- Technical -- Index currently testing support at 1,360 -- on a break lower, watch for additional support at modest chart congestion around 1,356 followed by more notable support in the range of 1,347 to 1,350. To the upside, look for initial resistance at 1,365 followed by subsequent overhead at 1,371.
1:58PM Dell Computer (DELL) 29.96 +0.48: Banc of America looks for in-line Q303 results of $0.21 per share and revenues of $9.1 bln in tomorrow's earnings release; thinks slight revenue upside is possible; expects management to remain cautious on overall sector while emphasizing company's share gains in key end markets and product segments. Firm believes DELL is making solid progress in seasonally strong consumer segment; forecasts Q403 EPS of $0.24 on revenues of $9.9 bln, above consensus of $0.23 on sales of $9.69 bln; remains convinced of DELL's ability to execute despite challenging end market conditions; thinks recent growth initiatives position company to outperform; maintains Buy rating.
1:41PM Network Appliance (NTAP) 10.77 +1.00: Shares are stampeding upward following last night's in-line Q203 earnings of $0.05 and Q4 guidance of $0.05-0.06. Although analysts' reactions to earnings are overwhelmingly positive, caution regarding aggressive valuation is sounded from several brokerages, including Goldman Sachs and Thomas Weisel who, despite strong fundamentals and successful initial evolution into enterprise market, expect shares to move sideways near-term. Soundview Technology expects stock to continue outperforming near term on good execution, but sees more long-term upside in less expensive names, like EMC and BRCD. Despite caution regarding rich valuation, shares are 10.2% up in today's session on encouraging earnings and outlook.
12:47PM S&P 500 edges above 20-day exponential moving avg : -- Technical -- Index has edged above its 20-day exponential moving avg at 887. Currently trading at 889, watch for initial resistance at 893 followed by additional overhead in the area of 897. To the downside, look for initial support now at 887 followed by a subsequent floor at 882.
12:39PM Broadcom experiences improvement in October and November (BRCM) 12.63 +0.72: UBS Warburg says that BRCM's CEO and CFO gave some positive comments ahead of today's UBS telecom conference; according to firm, co said activity in the months of Oct and Nov has been much improved.
11:52AM Marvell (MRVL) 18.40 +1.34: Ahead of company's November 21 earnings release, Thomas Weisel is reiterating Buy, expecting upside to both revenue and EPS on stronger-than-expected growth in storage business and continued Gigabit Ethernet ramp. Firm says valuation remains attractive, trading at 21x CY03E EPS, and thinks shares have room for upside given growth and profitability outlook. Also, believes MRVL is one of the few semiconductor companies that is consistently delivering upside to estimates and raising guidance... MRVL currently up 7.9%.
11:33AM RF Micro Device to pay off synthetic lease (RFMD) 7.76 -0.34: -- Update -- Reuters reports that company will pay off a lease-related expense and associated interest, totaling $94.3 million, to avoid violating any covenants. "The company has decided to pay off the lease and we're also going to pay off the interest-rate swap," RF Micro's CFO told Reuters.
10:46AM Intermagnetics (IMGC) 19.02 -0.48: Due to recent stock appreciation, First Albany downgraded to BUY from Strong Buy; however, firm continues to believe IMGC is a great stock over long term. Given recent run in stock and the volatile market environment, firm encourages investors to capitalize on market volatility to add to their positions. Firm walked away from shareholder's meeting yesterday feeling that IMGC remains on track to meet or exceed projections of $35 mln in revenue and EPS of $0.21 for 2Q03; maintaining revenue and EPS projections of $146.2 mln and $0.92 for FY03.
10:31AM Research In Motion (RIMM) 14.23 -0.37: Before open, Bear Stearns initiated with a Peer Perform rating. While RIMM continues to execute on multiple fronts, firm is concerned that the delays in GPRS rollout could continue to stall its growth in the near-term. Also, concerned about the new product launches in a tough IT spending environment, timing of RIMM's licensing initiatives, and emergence of competitors. Firm thinks stock is fairly valued at around $13-$18.
10:12AM Nasdaq trades towards session lows : -- Technical -- Index trades towards session lows. From current levels, watch for initial support at modest chart congestion around 1,336. That level is followed by the index' 20-day exponential moving average at 1,329 and a subsequent floor at 1,320. To the upside, look for initial resistance at 1,340 followed by subsequent overhead in the range of 1,347 to 1,350.
9:53AM Brooks-PRI Automation cancels conference presentation (BRKS) 12.41 -0.90: Lehman says that BRKS pulled out of their semi conference (Nov 18-20) since the co will be reporting earnings that week and senior mgmt wouldn't be available; co offered to send an IR rep instead, but cancelled after firm suggested attendence might be low since other co's were sending senior execs.
9:48AM Technical Levels : When we reviewed the Nasdaq yesterday, we were looking for a near-term bounce at the very least. As it turns out, the Nasdaq obliged with a single-day rally of 30 points which amounts to a 2.2% advance. Yet what was also interesting about yesterday's move was that it finished with a close at 1,349.5 -- that level matched up relatively well with our final resistance in the range of 1,347 to 1,350.
At this point, it's worth noting that the Nasdaq has been acting well from a technical perspective. The index has favored obvious support and resistance levels which suggests recent market activity has become relatively orderly. A few of the notable levels the index has observed over the past week include:
Resistance at Nasdaq 1,419 to 1,423 which we touched on in our November 7th review of the index. That area brackets the September 11th-induced reaction lows that bottomed at 1,423, as well as the reaction lows of October 1998 which bottomed at 1,419.
Nasdaq support at the bottom of a recent gap at 1,360 which we identified in our November 8th review. That level represents the bottom of a former gap created on November 4th.
Nasdaq support in the broad range of 1,300 to 1,326 which we pointed to in our November 11th review. This range was relatively broad because it encompassed several key points. Namely, the Nasdaq's 20-day exponential moving average, the index' 100-day simple moving average, and congestion around the 1,300 level which also happened to approximate a 38% retracement of the prior leg higher.
Nasdaq resistance at 1,350 which we touched on in our review yesterday. That level matches up with notable chart congestion and also approximates a lesser utilized Fibonacci retracement.
So it's notable that each of the above levels are technical levels we identified in advance of the move. Yet these levels will be worth locking away for future reference as well.
Now starting from scratch on the present outlook, watch for initial support at modest chart congestion around 1,336. That level is followed by the index' 20-day exponential moving average at 1,329 and then again by a more important floor in the range of 1,300 to 1,305. Again, the 1,300 to 1,305 area brackets the index' 100-day simple moving average and also approximates a 38% retracement of the prior leg higher.
To the upside, look for initial resistance at Nasdaq 1,360, which represents the bottom of a former gap created on November 4th. That's followed by modest subsequent overhead in the range of 1,377 to 1,380 and more significant overhead in the range of broader congestion at 1,394 to 1,401. Note that as a rule, the advances have been coming on stronger volume than the pullbacks -- this suggests the very near-term outlook favors additional upside absent exogenous influences along the lines of yesterday's 'Bin Laden' tape. -- Mike Ashbaugh, Briefing.com
9:19AM RF Micro Device discloses violation of synthetic lease (RFMD) 8.09: Co discloses in last night's 10-Q that they have violated certain covenants under a synthetic lease, and hence will not be in compliance with a consolidated total leverage ratio covenant under the lease documents; to address these actual and potential defaults, RFMD obtained a temporary conditional waiver from the lenders that will expire on Nov 20, and will seek to renegotiate or repay this obligation; the outstanding liability related to the synthetic lease is approximately $86.0 mln.
8:52AM Toshiba plans to boost flash memory production : Reuters reports that Toshiba Corp plans to boost large- capacity flash memory chip production at its flagship memory plant in central Japan due to strong demand for NAND-type flash memory chips used in camera-equipped mobile phones and digital still cameras. Sandisk (SNDK 19.80) is another major maker of NAND-type flash memory chips.
8:03AM Solly recommends swapping into National Semi out of Micron : Salomon Smith Barney upgrades NSM to Outperform from In-Line and downgrades MU to In-Line from Outperform, and recommends swapping into the former from the latter.
7:30AM Survey indicates execs expect to cut jobs, delay investment : The Financial Times reports that the Business Roundtable survey indicates that execs from some of America's leading co's are expecting to cut jobs and delay investment over the coming year, in the latest sign that the US economic recovery is struggling to gain momentum.
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