From Briefing.com: It was shaping up to be a perfect week for the Nasdaq, but by the late afternoon on Friday, the urge to take some profits proved to be just too great. Comparatively speaking, though, the Nasdaq, which fell 0.63%, still fared better than the Dow and S&P, which dropped 1.26% and 0.89%, respectively, on Friday.
Of course, everyone will be quick to blame the weaker than expected December employment report for the losses, but when it comes to the technology pullback, we ain't buying it. After all, if participants were truly unnerved by the jobs data, the tech sector would have never rebounded from its early losses. As was the case throughout the week, all the early dip did was encourage renewed buying interest, and before long, the technology sector had steered the Nasdaq back to positive territory. Heck, it was up a tidy 13 points, or 0.6%, at its highs for the day, which were established around 13:30 ET or roughly 5 hours after the release of the employment report.
No, if anything undid the sector on Friday, it was simply the realization that the tech sector can't possibly maintain its sizzling pace. To that end, the Nasdaq at its high this past Friday, was up approximately 107 points, or 5.3%, from where it began the week. Thus, participants understandably elected to take some money off the table going into the weekend, cognizant that the sector is due for a period of consolidation, which is a natural occurrence following a quick, and substantive, surge.
Beyond that, there's really not that much more to read into it at this point. -- Patrick J. O'Hare, Briefing.com
6:10PM Weekly Wrap: The first full week of trading in 2004 is now behind us and it will forever be remembered as a bullish period as the Nasdaq, S&P 500, and Dow Jones Industrial Average gained 4.0%, 1.2%, and 0.5%, respectively. In a manner of speaking, it was deja vu as what transpired this week looked a lot like what happened in 2003. To wit, dips were treated as a buying opportunity, gains were broad-based, the technology sector outperformed, and the employment data failed to impress.
The latter proved to be the one, true sore spot of the week and led to a lackluster session on Friday that culminated in a late-day sell-off as participants elected to secure some profits amid a sense that the market had perhaps gotten ahead of itself. The disappointment in the December jobs report was rooted in several factors: (1) there was only a 1,000 increase in non-farm payrolls versus estimates for a 148K gain (2) the average workweek, which is an indicator of labor demand, fell to 33.7 hours from 33.9 (3) the manufacturing sector reported its 41st consecutive month of job losses and (4) nonfarm payrolls in the prior month were revised lower to +43K from +57K (statistically insignificant, but direction of revision compounded overall disappointment).
If there was a silver lining in the report, it was the recognition that the data should ensure that the Fed will refrain from raising interest rates for some time. That consideration hit home in the Treasury market, which posted sizable gains on Friday that were strongest in the front to intermediate part of the yield curve. The 10-yr note, for its part, advanced 45 ticks, bringing its yield down to 4.08% - 30 basis points lower than where it began the week. On the flip side of things, the jobs report did little to help the dollar, which lost ground again this week against the yen and the euro as interest rate differentials continued to weigh on the greenback.
Within the equity market, there was very little that weighed on the telecom equipment stocks this week as they paced the gains in the technology sector. Nortel Networks (NT) led the way, advancing 37.0% on the heels of a bunch of upgrades that followed news of a key contract win at Verizon. Nokia (NOK) and Andrew Corp. (ANDW) also contributed to the surge of buying interest in the group as both companies increased their earnings guidance for the December quarter. Lucent (LU) was another standout on the week (up 19.0%), but saw its progress slowed a bit on Friday with Morgan Stanley issuing a valuation-based downgrade to Equal Weight from Overweight.
Analysts, frankly, played a key role in the action this week as they unleashed a flood of ratings changes, the bulk of which were bullish, that were put on hold until after the holidays. Their favorable calls, coupled with upbeat earnings pre-announcements from the likes of Nokia, Procter & Gamble (PG), and Coach (COH), helped fuel the continued buying interest that resulted in heavy volume at both the NYSE and Nasdaq. The latter, in fact, saw volume top 2.0 bln shares every day of the week with Thursday (2.67 bln) being the high watermark.
Thursday was also accented with a hefty number of same-store sales reports from the retailers that made it clear consumers spent heartily, and late, in the holiday season. Wal-Mart (WMT) served as the most prominent example of that trend as it reported a 4.3% increase in December same-store sales despite previous guidance that it expected comps at the low end of the 3-5% range.
As noted above, the telecom equipment group had plenty of company in the leadership ranks, which saw the semiconductor and oil drilling stocks serve as the other main sponsors of the broader market's advance. The drillers were particularly strong on Friday as a pronouncement from Royal Dutch (RD) that it failed to find as much oil as it pumped for the third year in a row punctuated the need for increased drilling activity. Higher energy prices also aided in the advance. For the week, crude oil was up 5.5% to $34.31/bbl, natural gas prices rose 17.7% to $7.287 per BTU, and heating oil surged 10.4% to $1.96 per gallon.
The apparel group, led by Gap (GPS), which posted a relatively disappointing 1.0% gain in same-store sales for December and slipped 12% on the week, was the S&P's worst-performing industry group. Other laggards of note included the managed care, drug store, airline, tobacco, railroad, and homebuilding groups. The latter got broadsided by growth concerns that were piqued by Ryland's (RYL) news that backlog growth decreased from Q3 while new home orders in Q4 dropped 9.0%.
From Briefing.com's vantage point, we did find the employment report disappointing, but we still believe hiring activity will pick up in the months ahead as economic growth continues. In turn, we continue to feel good about the stock market and maintain our long-term bullish stance that the fundamental backdrop continues to favor being invested in equities. -- Patrick J. O'Hare, Briefing.com
YTD chart of major stock indexes
Index Started Week Ended Week Change % Change YTD
DJIA 10409.85 10458.89 49.04 0.5 % 0 %
Nasdaq 2006.68 2086.92 80.24 4.0 % 4.2 %
S&P 500 1108.49 1121.86 13.37 1.2 % 0.9 %
Russell 2000 560.85 575.20 14.35 2.6 % 3.3 %
2:37PM Nanometrics estimates, price target raised at Oppenheimer (NANO) 19.70 +2.57: --Update-- Oppenheimer raises its 2004 est to $0.47 from $0.15 and 2005 est to $1.19 from $1.00 citing co's new guidance, strong semiconductor capital spending and anticipated gains in orders for both NANO's automated and integrated metrology tools. Price tgt goes to $25 from $23.
2:01PM Amtech expects bullish commentary out of Semi Equipment Symposium : Going into next week's SEMI Industry Strategy Symposium (ISS), the bellwether conference for the industry, American Technology Research expects high-profile industry executives and market forecasters to express bullish optimism for the semi equipment industry for 2004 and beyond. Notable speakers include SIA (semiconductor industry association) president George Scalise (Jan. 12) to discuss the strength of chip demand with a dedicated session on the outlook in China. On Jan. 13, firm expects Applied Materials' CEO Mike Splinter to discuss key industry drivers such as 300mm wafer size and 90nm linewidth technology. Additionally, a discussion on new process materials is likely to include SOI (silicon on insulation) which firm believes continues to highlight the potential opportunity for Ibis (IBIS 12.02 -0.47)
12:58PM Nanophase Tech announces commercial availability of Novel New Nanomaterials (NANX) 11.58 +1.08: Co announces commercial availability of a new class of cerium-based oxide nanomaterials from the Co's patented NanoArc technology. The new nanomaterials, termed HSA nanoproducts, are apprx 5-15 nanometers with tight particle size distribution and are targeted to ultrafine polishing applications and catalysts applications. NANX's new HSA nanomaterials may also be combined with dopants, such as rare earths, to form single crystal multi-element nanomaterials.
12:20PM Several Semis Display Strong Technicals : As the SOX recently pushes to a new 52-week high some semi names displaying relative strength include INTC (+0.67%), TQNT (+5.88%), BRCM (+4.13%), PMCS (+3.01%), RFMD (+6.10%), LSI (+2.45%) and ALTR (+1.78%), and KLAC (+2.75%)
11:47AM Kulicke & Soffa reiterates Q1 to be at high-end of rev guidance (KLIC) 15.12 +0.17: Co reiterates that it expects Q1 revs to be around the high end of around $150 mln (plus or minus 5%).
9:53AM CBMX: Brean Murray comments on Nanotechnology Discovery deal 3.89 +0.06: Brean Murray comments that co and Nanotechnology Discovery Corp. have agreed to use Acacia Research's (CBMX) microarrays to discover such things as catalysts for fuel cells, batteries, CRT displays, and industrial polymerization reactions, or to discover conductive organic polymers. The key in using CBMX's microarray is that a tedious and time-consuming discovery process can now be done in parallel on CBMX's microarray, exactly like the DNA version of the microarray replaces thousands of individual experiments in drug research. Firm estimates that CBMX's total involvement to cost less than $100,000 annually. In return, CBMX shares in any upside from the licensing of discovered catalysts or conductive polymers, or from the sale of research systems built by NDC and sold to customers wishing to conduct their own discovery. Brean Murray reits its Strong Buy rating and $8 tgt.
Texas Instruments (TXN) 31.78 -0.07 : The Wall Street Journal reported the co is expected to announce Friday a pact with Vonage Holdings Corp, which is the nation's biggest provider of Internet-based phone service, to produce software and chipsets for equipment that would enable such calling. Currently, people who want to use Vonage's service have to get an additional piece of equipment from the company to enable calling. The new Texas Instruments design could mean that Vonage's Internet calling capabilities would come built into equipment such as cable or direct-subscriber-line modems.
finance.yahoo.com
Congrats on the gains Eddie!
To Gottfried and Bob... you guys really had me laughing today!
Thanks, RtS |
