From Briefing.com: The Nasdaq is a perfect 4-for-4 in 2004. In baseball, that's called batting a thousand. In a game of nine-ball, it means you have five more shots tough guy. In my collegiate dating life, it meant four requests for dates and four rejects (God bless my wife). Any way you look at it, it is about as good a start to the new year as any bullish-minded investor could hope for as the Nasdaq is up a hefty 3.7% year-to-date.
On Wednesday, the Composite scored a 1.00% gain and the trading action looked almost identical to Tuesday in that stocks dipped in the early-going, but soon reversed course and remained on an upward trajectory into the close. Again, advancers outpaced decliners, but not by a huge margin (1874 vs 1335), and volume at the Nasdaq topped 2.0 bln shares; meanwhile, the telecom equipment and semiconductor shares maintained a leadership position. Biotech and networking stocks also helped pace the Nasdaq's advance.
Intel (INTC 33.99, +3.31%) - a component in Briefing.com's Active Portfolio - was a notable standout as investors responded favorably to a Sanford Bernstein upgrade to Outperform from Market Perform that was based on a belief that above-normal seasonal revenue during 1H04 is increasingly possible and that further gross margin expansion, resulting from cost savings, is not entirely discounted. Intel's strong showing set a positive tone for the SOX Index which, like the Nasdaq, is also up 3.7% for the year.
The telecom equipment sector was hotbed of buying activity, too, as Nortel Networks (NT 5.68, +19.33%) and Lucent (LU 3.51, +7.01%) combined accounted for 16% of the total volume (1.70 bln shares) at the NYSE. The former company, arguably, was the stock of the day as it soared in a response to a number of upgrades and an announcement that Verizon had selected it to be the exclusive provider of the company's local and long distance Class 4 and Class 5 VoIP switches in new offices over the next 18 months; NT will also be the exclusive supplier of VZ's VoIP and multimedia services infrastructure over the next 18 months. Lucent, for its part, announced an agreement to expand the third-generation (3G) CDMA2000 1X network for VIVO, Brazil's largest mobile operator.
Some profit taking may be in order following the recent surge, but overall, it is clear that the bullish uptrend remains intact, and like it or not, technology shares remain in demand. Then again, that is normally the case this time of year. -- Patrick J. O'Hare, Briefing.com
6:34PM Wednesday After Hours prices levels vs. 4 pm ET: Traders have had their hands full tonight, shifting through various earnings announcements, product updates, and same store sales numbers. Most of the aforementioned have been supportive of the indices' advance - which culminated in the Nasdaq closing at a 29-month high in today's regular session - and thus the S&P futures, at 1126, are 1 point above fair value, and the Nasdaq 100 futures, at 1518, are also 1 point above fair value.
The following is a list of companies issuing financial guidance/other corporate news items, and the reasons behind the stock's resulting move:
After Hours Mover % Change Move Reason for Move
Amylin Phamaceuticals (AMLN) -2% Biotech company withdraws Swiss filing for Symlin, a diabetes drug; Authorities indicated the drug could not be approved and the country does not allow for re-submissions of data
City National (CYN) -1% Regional bank cuts FY03 (Dec) forecast to $3.71 from $3.85-3.92 citing a California Franchise Tax Board decision that will reverse previous tax benefits
Procter & Gamble (00) +2% Household products company expects to exceed the current consensus estimate (roughly $1.26) by $0.02-0.04 in its Q2 (Dec) report; Cites organic volume growth of 9% that was above its prior guidance of +7-8%
tResearch in Motion (RIMM) -5% Manufacturer of wireless solutions files a 9 mln share offering, with an option to purchase an additional 1.35 mln shares to cover over-allotments
As for tonight's comparable store sales results for December, they are summed up in the below table. Platinum subscribers should visit Briefing.com's Same Store Sales calendar for a complete rundown of tonight's figures and how they compare to the Briefing.com consensus estimate. For our thoughts on what to expect for this crucial holiday shopping month, be sure to check out the Looking Ahead column.
Retailer Same Store Sales Result % Change Move Other Comments
American Eagle (AEOS) -5.7% +7% Teen retailer confirmed the Q4 (Jan) First Call consensus estimate of $0.47; Stock has slumped 28% since mid-July
Hot Topic (HOTT) +10.1% +3% Mall-based retailer raises Q4 (Jan) EPS outlook to $0.44 from $0.42
Men's Wearhouse (MW) +2.9% -2% Retailer issues Q4 (Jan) and FY03 EPS guidance noticeably below the Reuters Research consensus estimate
Tomorrow, the market will digest the release of more comparable store sales before the open, as well as the unveiling of jobless claims for the week of January 2. The consensus estimate calls for a rise of 6K, to 445K, for the fairly volatile report.
For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap.-- Heather Smith, Briefing.com
4:30PM Research In Motion files 9 mln share offering (RIMM) 72.86 +0.17: -- Update -- Co discloses in today's F-10 filing that it will offer 9 mln shares, with an additional 1.35 mln shares reserved for overallotments.
4:28PM RIMM falls 2.50 pts in after hours:
2:21PM AXT Inc expects Q4 rev of $9.1 mln, vs consensus of $8.6 mln (AXTI) 3.54 +0.27: Co announces that it expects Q4 rev of approx $9.1 mln, vs consensus of $8.63 mln. The co also noted that primary markets served by AXT substrates, including wireless handsets and red and yellow light emitting diodes, are expected to grow during 2004.
1:59PM LU color 3.48 +0.20: Merrill Lynch thinks NT's competitive win at Verizon carries more weight than Lucent's (LU) win with Brazil-based Vivo, and considers it a net negative for LU; firm says Nortel's VoIP win at Verizon is not shocking given its leading mkt position in the segment, yet they considered Lucent to be a serious contender for at least a piece of the business, especially following its announced win with Qwest late last year; firm believes the lack of VoIP wins for Lucent helps justify the valuation discount to key competitor Nortel.
12:10PM CCMP Color 52.52 -1.78: Weakness in stock today is being attributed to Detwiler Mitchell comment. With the transition to copper interconnects gaining momentum, firm has been seeing the number of competitors increasing substantially, resulting in heavy pricing pressure in the market. Firm says such is the case at Intel for Cabot Microelectronics (CCMP). Firm also indicates that its channel checks sources have repeatedly confirmed that March 2004 represents the end of a Cabot contract with Intel that has obligated the processor giant to purchase copper slurry from the Company. Between now and then, Cabot's shipments into Intel will likely continue to ramp, but there is significant risk that they will end abruptly following March 31.
11:02AM Intel creates $200 mln fund to accelerate digital home innovation (INTC) 33.37 +0.47: -- Update --
10:30AM Nasdaq Composite edges lower (COMPX) 2050 -7: -- Technical -- The index has been stymied near a resistance zone between 2059/2065 over the last two days that was highlighted in The Technical Take. This morning's minor pull back has held as support mentioned at 2047/2045 but will need to see sustained action back above 2055/2056 to improve the early pattern. Short term secondary support is in the 2038/2036 area (congestion/20 exp --hourly chart) followed by 2030/2027.
9:40AM MRVL: Supplier pact with Dell a major milestone -- Pac Growth 40.35 +0.17: Pacific Growth says that yesterday Dell introduced its new GigE switch box, the PowerConnect 2600 product line. Firm believes that Marvell Tech (MRVL) is the sole supplier of switch chip for 2600, and has commenced the shipment of Prestera switch chip to Dell. Pacific Growth views this as a significant milestone for MRVL in the GigE switch market and reiterates its Over Weight rating on stock.
Diodes Inc (DIOD) 22.09 +1.34 : Before the open, company said it sees EPS up approx 20% from $0.18 reported in Q3, which equates to $0.22 per share, First Call consensus is $0.18, revenues up 10% from $34.9 mln reported in Q3, or $38.4 mln, First Call consensus is $35.1 mln (single analyst).
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