from Briefing.com:
SEMICONDUCTOR STOCKS. Once again, semiconductor stocks have been receiving the attention of Wall Street.
While Wall Street analysts are still cautious about the turmoil in Asia and the impact this part of the world will continue exert
on the semiconductor sector, there appears to be a light at the end of the tunnel. Hopefully, it is not a freight train that
they have mistaken for better times for this much battered sector. Certainly, from the data released last night by the
Semiconductor Industry Association, conditions in the sector had not improved much as sales of semiconductors fell
14.1% in June to $9.84 billion from a year-ago. On a sequential basis, sales also fell 2.2% in June. However, this data is a
little dated and given the growing sentiment on Wall Street that a bottom is near, semiconductor stocks have begun to
rebound. Among the winners lately are Intel (INTC 87) and Micron Technology (MU 35), two bell-wether issues that are
reflective of the growing interest in this sector again. Both of these issues have seen sizeable price movements since late
June, with Intel rising more than 31% when it trade at $66 a share and Micron more than 66% from the low $20s. While
these gains have been made despite Merrill Lynch's influential analyst Tom Kurlak leading the charge (in fact, he
remains quite negative on the sector), more evidence will need to come forth in the form of stable average selling prices and
less inventory in the channel before the turnaround can be properly assess. But, movement in these stocks suggests that
investors are willing to take a chance that the worse is over and buy ahead of the data confirming an improvement in
market conditions. |
