From Briefing.com: 8:58AM Gapping Up/Down : Gapping Up: TIVO +12% (beats by $0.06, ex items, raises Y04 guidance), VTIV +26% (beats by $0.09, beats on revs), LSBC +13% (announces deal with Sigma-Aldrich), SIMG +10% ('E' removed from trading symbol), ANPI +5% (secondary play to BSX Taxus approval), LCUT +4% (mentioned in BusinessWeek), BSX +3% (Taxus approval), HLTH +3% (CalPERS makes $100 mln investment into co), CNXT +2% (Lehman upgrade), QLGC +1.4% (added to Merrill Focus List), OSTK +1% (JMP starts at Strong Buy)... Gapping Down: INTC -2.2% (announces guidance below consensus), AMAT -2.4% (INTC guidance), ULTE -10% (delays earnings release), SBL -9% (disappointing qtr, guidance), MAMA -5% (profit taking), LOOK -5% (profit taking).
8:48AM S&P futures vs fair value: -5.4. Nasdaq futures vs fair value: -17.0. Futures trade continues to tumble and signal a sharp pullback at the open... Frustration that Feb job growth was so small - lower than even the lowest forecast of economists that make up the consensus estimate - and that Jan and Dec nonfarm payrolls were also revised lower has prompted traders to lighten positions in equities... Coincidentally, the bond market has gotten a large spike off the report, with the 10-year note surging 42 basis points to a yield of 3.85%.
8:33AM Aeroflex prices 7 mln share offering at $13.75 (ARXX) 14.16:
8:24AM FLEX: As expected, overall tone of call positive -- UBS 18.70: UBS says that the positive tone of the mid-quarter call supports firm's view of Flextronics as a leading beneficiary of the recovery in tech demand. With the potential upside to estimates when the Nortel deal closes, as well as continued strength in handsets, believes that Flextronics is poised for a solid 2004. Maintains Buy rating and $23 price target.
8:10AM Department stores post strongest February in a decade -- UBS : UBS reports that department stores posted the strongest Feb sales performance in more than a decade as the UBS dept store monthly sales index rose by a strong 9% in Feb, the strongest monthly performance since Jan 1997. Easy comparisons, favorable fashion outlook, higher tax refunds and rising stock markets are all contributing to the strong industry sales momentum. Traffic was up strongly both at malls as well as off-mall retailers and spring merchandise is selling well at full price. The firm expects sales momentum to last through the back-to-school season. The firm has Buy ratings on FD, KSS and NMGA.
8:05AM INTC: Color on Mid-Qtr Update 29.65: Analyst community was generally in a forgiving mood going into Intel's Mid-Qtr update and this morning is not expressing much disappointment to co's guidance. UBS believes that the negative data points are largely behind us and firm expects forward data points will be positive. Under current conditions, firm believes risk-reward favors adding to positions below $30... ThinkEquity says that Intel cited Asia and Japan as areas of weakness, but clearly stated that any inventory build for January had already cleared channels (including Intel product at its customers), and that nothing unusual needed to occur in March in order to hit its $8.1B mid-point... First Albany says that while revenue midpt was $100 mln below firm's expectations, co did not lower the gross margin range, as firm had expected... Piper Jaffray is reducing CY04 est to $1.23 from $1.30 and CY05 to $1.33 from $1.40. Although firm sees few positive catalysts near term, it would be buyers on pullbacks to $27/$28 in anticipation of a more constructive IT spending environment in the second half... Stock currently trading down $0.45 in pre-market at $29.20.
7:38AM CNXT upgraded at Lehman 7.40: Lehman upgrades Conexant to Overweight from Equal-Weight and raises their target to $10 from $6 based on their belief that the stock is undervalued at these levels; firm says the combined co will be a solid competitor in several end mkts (DSL, set-top, analog modem, WLAN), and should reap approx $25 mln/year benefit from improved cost efficiencies and another $25 mln/year in operating expense synergies.
7:24AM QLGC added to Merrill Lynch's Focus 1 list 43.84: Merrill Lynch reiterates their Buy rating on QLogic and adds the stock to their Focus 1 list, citing: valuation at 23x their CY05 EPS est (stock had normally traded at over 30x next year's earnings), and firm believes the co's core HBA biz remains strong. Target is $65.
7:18AM LU: Lucent new switch competes with Ciena -- Lightreading 4.08: Lightreading reports that Lucent is prepping a compact, multiservice edge switch called the CBX 3500 that is being dubbed by some a "WaveSmith Killer" for its potential to compete with the product Ciena got in acquiring startup WaveSmith. The switch won't be ready until sometime this summer, according to sources close to Lucent. Lucent's advantage, according to Lightreadings sources, is that the new switch will be able to use the same linecards as the CBX 500, and it uses the same OSS that is already working in most carrier networks.
7:17AM Deutsche upgrades QCOM, PWAV : Deutsche Bank upgrades Qualcomm to Buy from Hold and raises their target to $70 from $58, citing their increased WCDMA handset forecast, the acceleration of HSDPA, and by expected positive news flow pertaining to WCDMA and CDMA mkts. Firm also upgrades Powerwave to Hold from Sell and raises their target to $9 from $7.50 based on their increased infrastructure forecast and expected mkt share gains of its largest customer, Nortel Networks.
7:01AM Early Research Calls : Deutsche Bank upgrades QCOM to Buy from Hold and PWAV to Hold from Sell, also starts ISSI at Buy with $22 tgt... UBS downgrades PCH to Reduce from Neutral... Prudential downgrades NUE to Neutral Weight from Overweight and X to Underweight from Neutral.... Merrill Lynch adds QLGC to Focus 1 List... Piper Jaffray cuts AFFX to Mkt Perform from Outperform... Morgan Stanley ups NSC to Equal Weight from Underweight... Bear Stearns ups MBG to Outperform from Peer Perform tgt $61... A.G. Edwards raising Retailing Group to Overweight from Even-Weight... Lehman upgrades CNXT to Overweight from Equal Weight, tgt goes to $10 from $6... JMP Sec starts OSTK with a Strong Buy, tgt $50... Pacific Growth initiating CPTV with Overweight, thinks can trade to $18.
6:22AM European Summary : European stocks hovering around flat levels with phone-related stocks showing some gains, a day after Nokia (NOK) said the wireless services industry will double in size by 2007. Chip shares, including Infineon Technologies AG (IFX), seeing some selling following Intel Corp.'s (INTC) guidance suggesting Q1 sales may miss consensus estimates. Adecco (ADO) plans to publish its 2003 results on April 20 after a delay to check accounting problems, which turned up no major issues and pushed the shares up three percent. Banking sources saying there was no basis to speculation that Germany's biggest bank, Deutsche (DB) would be bid for by Citigroup (C). Talk had apparently been triggered by a Frankfurt visit by Citigroup Chief Executive Charles Prince, who attended a private event at investment bank Merrill Lynch there... The dollar extended recent gains to four-month highs on the yen and held fairly firm versus the euro on Friday on expectations the United States would report jobs data later that could hasten U.S. interest rate hikes, Reuters reporting... UK -0.21%, Germany +0.28%, France +0.16%
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