Henry, From Briefing.Com
Topsy-turvy trading continued, as techs opened soft on light follow-through selling only to rebound into the close... Traders simply lack conviction in both directions... Bears afraid of getting trapped (as they have so often in the past), while bulls afraid that Fed might hike
rates... Though Briefing.com would not be surprised if Fed adopted a tightening bias out of today's FOMC meeting, we see very little chance of an actual rate hike anytime soon... As inflation fears die out and rates ease lower, we expect the bulls to finally win out.
Bullish case given a boost by Hewlett-Packard's (HWP 87 7/8 +3 11/16) stronger than expected earnings... After the close, HWP reported a quarterly gain of $0.88, eight cents better than expected and well above year ago gain of $0.65... Whisper number was in the $0.83 area... Magnitude of headline surprise should outweigh uninspiring revenue gain of 3%... Should note that revenues in line with expectations... Stock up in early after hours trading.
HWP's positive earnings news likely to get market jacked up ahead of Dell's (DELL 43 1/4 +2 1/16) number due out after today's close... Stock rose Monday in anticipation of a good number... Street looking for gain of $0.16 vs. year ago profit of $0.11... Whisper in the $0.17-$0.18 area... Revenues expected to come in about $5.5 bln... Given street's disappointment over last quarter's "mere" 38% top line growth, revenue number will carry a lot of weight in dictating stock's post-earnings direction... Applied Materials (AMAT 63 1/4 +2 9/16) and Lycos (LCOS 108 1/2 +1 3/8) also scheduled to release their results today... If DELL, AMAT and LCOS can deliver positive results on the back of HWP's number, and the Fed keeps rates on hold, market's focus could begin to shift back to earnings prospects... When that happens techs will stage a strong, broad based advance, as sector poised for a very good second quarter (calendar year). |
