From Briefing.com: It's only natural that after a long, profitable advance, investors would be looking for signs that it's time to take some profits off the table. They got what they were looking for on Monday, as the dollar fell to multi-year lows against the yen and the euro. The sluggish LEI data (+0.1%) only greased the slide.
While the scope and breadth of yesterday's retreat were considerable, the decline was insignificant when viewed against the gains over the last couple of months. In other words, there was nothing unusual or alarming about Monday's decline. To the contrary, by backing up a bit over the next several days the market will be removing some of the froth off the rally -- and that's very healthy for the intermediate- to long-term.
Considering that the indices have enjoyed a very strong advance over the past several weeks, traders should not be surprised to see some follow through selling. However, if Briefing.com is correct and we actually have transitioned from bear to bull market, then buyers won't wait long to jump back on board. Initial support is in the 1450-1420 area.
Expect this floor to hold on its first test at least. Key at that point will be to see if volume expands or contracts on the subsequent rally. If the former, then current setback will be short and shallow. If not, sellers will get at least one more shot at taking the indices down more significantly. Pivotal long-term support is at 1353.
5:10PM Microtune delays 10-Q, 10-K filing again (TUNE) 2.87 +0.02: Delays filing of Y02 10-K, Q1 (Mar) 10-Q until mid-June, previously company announced it would file these reports sometime in May. TUNE presented its plan for NASDAQ listing compliance on Friday to NASDAQ Listing Qualifications Panel, awaiting word on decision.
4:15PM Agilent reports in-line Q2 results, reaffirms forecast (A) 15.51 -1.00: Reports Q2 (Apr) loss of $0.15 per share, in line with the Reuters Research consensus of ($0.15); revenues rose 0.7% year/year to $1.47 bln vs the $1.44 bln consensus. Expects Q3 pro forma EPS of ($0.10)-$0.00 on $1.45-$1.55 bln in revs, vs consensus of ($0.06) and $1.49 bln.
3:12PM Sector Watch: Semiconductor : -- Technical -- The sector index (SOX 339 -4.1%) has attempted to stabilize following the afternoon downside extension to last week's lows (337/336) but thus far interest has been minimal. The weakest performers today are: NSM -6.2%, BRCM -5.5%, XLNX -4%, INTC -3.8%, MXIM -3.7%, TXN -3.7%, KLAC -3.7%-- holding near 50 day sma support, NVLS -3.5%, AMAT -3.1%-- holding near 200 day sma support. The first step to improving the very short term bias would be sustained follow through beyond the 341/341.50 area.
1:20PM Artisan Components: D.A. Davidson comments on Friday's intraday plunge (ARTI) 19.94 -1.34: D.A. Davidson believes weakness in the stock on Friday was due to 10-Q filing which included a disclosure that customer Broadcom was seeking indemnification from Artisan in the matter of litigation between itself, as defendant, and one of its competitors, ST Micro (plaintiff), in an intellectual property dispute. To firm's knowledge, this matter has been disclosed at least twice; however, a reader of the filing would find no reference to this matter in co's immediately prior 10-Q b/c the matter originated with NurLogic, which Artisan did not own yet. (As noted on In Play Friday, ARTI shares tumbled almost 3 pts in two minutes in late action).
12:09PM RMBS follow-up 16.03 +1.07: We are hearing market chatter fueling the stock's rise intraday of a possible FTC resolution in light of its pending decision in the June timeframe. In speaking with a sell side analyst who covers RMBS (one of only 6), he states "its a little bit early to break out the champagne" given most analysts expectations of RMBS receiving an unfavorable ruling from the FTC. While the possibility of this rumor could augur well for the stock, he states it is "highly doubtful" that this rumor of Rambus and the FTC reaching an early settlement to be true.
11:25AM Qualcomm working higher again (QCOM) 31.11 +0.81: -- Update -- -- Technical -- Issued pulled back after the initial flurry of buying but has been edging back toward the highs in recent action. Intraday, if able to maintain a posture above supports at 30.90 and 30.75, the door will remain open for another short term rally attempt. Next resistance comes into play in the 31.50/31.59 (congestion/top of May 08 gap) area with the 20 day ema currently at 31.68.
9:48AM Marvell seen posting Q1 upside with strong guidance (MRVL) 27.45 -0.53: Legg Mason expects co to deliver upside performance when results are reported Thursday. Firm also expects full yr 2004 guidance to significantly exceed the current consensus.
9:31AM Credence defended by Fulcrum (CMOS) 7.66 -0.30: Fulcrum is out defending CMOS ahead of tomorrow's earnings report; stock is selling at a significant discount to peers (63% discount to TER, 57% discount to LTXX, 44% discount to A) despite the fact that CMOS is the only test equipment co that has no long-term debt and with a net cash per share of $3.40; reiterates Buy rating and $25 target, as price-to-book of 1.0x is close to its historic trough of 0.6x in 4Q02, comparable to the 1.0x found in 4Q01, and is lower than the previous troughs of 1.2x and 1.4x in 4Q98 and 3Q96.
8:05AM Transmeta announces design win in Firewall/VPN platform (TMTA) 1.30: The Company announced its recent embedded design win with IBASE Technology Inc. in its FWA7000, a fast and fanless Firewall/VPN platform. The IBASE FWA7000 high performance level makes it ideal for use in the wireless local area networking or WLAN environment and is targeted for enterprise customers.
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