Portfolio down 1.60%, Dow up 0.73%, Nasdaq down 1.72%, S&P500 down 0.16%, Gilder down 5.0%, Meisler down 2.6%, J-Blimps down 0.7%, Fuel cells/Alt Energy down 1.4%
NYSE Volume: 1.1 bln...Adv: 1065...Dec: 1724
Up Volume 434.40 Down Volume 619.12 Not so bad in this area
Nasdaq Volume: 1.6 bln...Adv: 1489...Dec: 2427
Up Volume 427.98 Down Volume 1122.52 Both internals were bad
Put/Call ratio 0.67 (Range 0.47 to 0.73) Very bearish
Sector Watch
Cons. Staples (XLP) 24.12 +0.62 +2.64% The drug stocks lifted this sector. PFE up 3% and LLY up 5%. This is perceived as the safe haven for tech volatility.
PFE MRK KO JNJ BMY LLY AHP PG SGP ABT PHA PEP MO MDT G CL BUD WAG KMB UN SWY BAX CAH BFO KR SLE CVS HNZ GDT are the major companies in the index
Drugs ($DRG) 396.97 +13.57 +3.54% Bristol-Myers (BMY) Company announces a $2 bln increase to its share buyback program;
Cyclicals (XLY) 25.81 +0.93 +3.74% Bed Bath & Beyond (BBBY) reported earnings of 15 cents a share Wednesday, beating analysts' estimates by a penny. Retailers got money as investor picked up flagging stocks in the sector. WMT. HD, S, LOW were all up 3% or more.
WMT HD F GM GPS TGT LOW S BNI COST MAY SPLS FDX NSC JCP NKE UNP AMR MAS KSS TJM CSX FD GT KM LUV
Retailers ($RLX) 855.36 +29.57 +3.58%
Airlines ($XAL) 143.54 -2.93 -2.00% KLM dumped 18% to lead index down lower. No merger with British air and CEO of KLM said it needs a merger. ALK AMR COMR CAI.B DAL KLM NWAC LUV UAL U are the index
Several techs were hit today
Comp. Tech ($XCI) 1464.28 -31.63 -2.11%
Hardware ($HWI) 417.88 -11.13 -2.59%
Network ($NWX) 1202.65 -30.95 -2.51%
Semis ($SOX) 984.51 -46.32 -4.49%
Natural Gas ($XNG) 217.72 -9.27 -4.08% Down on bets that strategy reserves will be tapped. Don’t bet on it. Refineries are operating at full capacity. Tapping the reserves means cheaper gasoline but the supply will not increase so it is essentially ineffective policy.
Oil Services ($OSX) 127.51 -2.71 -2.08%
Broker Dealers ($XBD) 633.84 -21.88 -3.34% Morgan Stnly DW (MWD) reported Q3 net of $1.09 vs $1.17 First Call mean. A shock to the sector expecting good earnings.
Portfolio Watch
WFII down 9.38% - Sanford Bernstein downgrades ERICY to UNDERPERFORM from MKT PERFORM. Says company's handset business losing 20% on every unit sold and that company is losing market share. This downgrade sent many wireless stocks lower. Also China unicom and British Telecom said going to spend lower. Since WFII depends on telco spending fears are that it is vunerable.
On the bright side was Lehman Wireless Conference Highlights : Lehman Brothers comments on their Wireless Conference; PHCM (108+6 5/8) and CMVT (90 5/8-1 3/4) gave highly upbeat presentations as well as smaller cap company's Sierra Wireless (SWIR 58 3/4-1 13/16) and leader SignalSoft (SGSF 35 3/8-1/2); firm reiterates Buy ratings on these core players. Major themes coming out of the conference included the importance of core infrastructure upgrades, the extension of the enterprise applications to the mobile arena, the growth of location, enhanced services and messaging and the important role of network security. Although WFII was not mentioned it is affected by the movements by these companies prospects in the sector.
Now at a 15% loss. Tomorrow too horrible to sell so we wait until next week.
Ida up 3.06% Electric utility hires Goldman Sachs to assist in the analysis and consideration of financial alternatives for company's fuel cell business development. IdaTech is developing a commercial fuel cell product line for small-scale electric power generation for residential, commercial and light industrial applications.
FDRY up 4.70%: Announces that Yahoo! Inc. (YHOO) has deployed company's NetIron 800 Internet routers and ServerIron Internet traffic and content management solutions. The Internet routers to be used specifically by Yahoo! GeoCities. This takes some pressure off the FUD that FDRY had inferior equipment compared to EXTR and JNPR.
IRF down 9.43%. Down on semi weakness.
PTEN down 7.87% down on the strategy oil reserve potential
KEM down 8.81% down on tech fears.
SNCI up 7.04%. A bright spot in an ugly market
CMTN up 1.36% Positive mention in briefingcom as four stocks that are severely undervalued. FDRY, EFNT, and TUTS are the others.
www2.briefing.com for subscribers
Other stocks
Goodyear Tire (GT) down 13.69% Company sees breakeven results to a small loss in Q3 vs profit of $0.33 anticipated by analysts. Sees similar results in Q4, compared to $0.40 profit expected by Wall Street. Cites raw material and energy costs, as well as weak pricing conditions.
Note: Got worse as day went on.
Global Crossing (GBLX) down 4.88%: Files amended 10Q and 10K reports with the SEC; restates earnings for Q1 to a loss of $0.48 vs the originally reported loss of $0.39.
Note: supposedly old news. Street really didn’t care.
Lockheed Martin (LMT) up 7.61%: Announces an expected increase in free cash flow to at least $1.5 bln versus the previous estimate of at least $900 mln. Company also estimates it will generate at least $2.3 bln in free cash flow during the two years 2000 and 2001 combined versus previous estimates of $1.7 bln. CEO Coffman also reaffirmed 2000 EPS estimate of $1.05 and projected 2001 EPS of about $1.25 (versus current consensus estimate of $1.23);
Note: Old defense stock with good news as techs got red.
CMGI up 0.17% Reported a steep quarterly loss, with its results no longer boosted by big stock-market gains from taking Web firms public.
Note: Not a good day to have bad earnings.
Shopping List
I brought back many of the good company that I though may never go to May lows.
SSTI down 2.11%. (Huge backlog of orders, $24 target re-entry, 346 rev rate, 70 p/e)
ADI down 7.97% (have to get near $70 to buy, pre-announce good quarter)
MCDT up 4.72% (Want re-entry below IPO, BRCD quarter expected)
CREE down 4.41 (LED king $80 re-entry target 136pe, 85% rev growth rate)
NTAP up 3.28%. (NAS king, $65 re-entry target, 631pe, 123% rev growth)
SLAB up 1.02%. (Waiting to see if it break $50 support. No re-entry yet.) More sells than buys. Lockup expiration is affecting it.
ISLD down 2.58%. At 22.79. (Strictly a bottom play, one to enter in the mid teens)
INKT down 2.21% (30% sequential rev growth, $100 was triple bottom)
JNPR down 4.07%. ($140 for re-entry)
SDLI down 3.79% (Great quarter last time, $250 would be great re-entry)
ACCD down 1.41%. (20% sequential revs and EPS. Re-entry when knife stops falling)
KEYN down 0.75%. (steady rev growth of 400%, present pe is 200 if only 0.03 EPS per quarter, re-entry on up trend or $20) Been basing quite nicely. May enter soon.
AMD down 19.37% (historic 30 rev growth and pe of 22 INTC is 42 pe and 17% growth, falling knife. Need to see relative strength work up to 50.)
Note: This is the better play on an INTC decline. If they don’t warn, it will shoot up after good earnings.
KOPN down 6.67% At $21.00 (Leading mfr of Cyberdisplays, 50% dependent on CNXT, $20 entry point)
T.WIN down 5.56% At $34 (re-entry $30, leading wireless design company with several patents)
Applied Materials (AMAT) down 5.77% According to SG Cowen, chip equipment maker presented a mixed-bag. While next couple of quarters appear solid, the S-T fluid order picture may be cause for concern among some investors. Says long-term picture continues to look good.
Note: Placing it on watch list. This is the premier semi-equipment company. If it comes close to the lows of $36, I will pounce.
EPG down 7.42%. (Now off highs by 15%, Re-entry when knife stops falling.)
INTEL SAID its third-quarter shipments will be below estimates, setting off jitters about PC demand. The chip maker predicted revenue will increase 3% to 5% from the second period; analysts had expected a 9% to 12% rise.
The fear on the boards was frightening. Margin calls expected, meltdown, Nasdaq 3000 etc…Our strategy of hedging with profitable companies below their PE will face a difficult test tomorrow. I’ll be gone most of the day so I will expect a 5% hit tomorrow. The cockroach theory is prevalent. (If you see one roach <INTC>, there must be several around)
I am reminded of the spring week of April 10-14 where the Nasdaq lost 25%. We won’t hit that this week, but fear could cause a top ten red Nasdaq day. It did get worse then too. Most thought it was the low, but six more weeks of lower prices prevailed. Whether history repeats remains to be seen.
Top nine worst days on the Nasdaq.
10/19/87 -11.35 %
4/15/00 -9.67%
10/20/87 -9.00
10/26/87 -9.00
08/31/98 -8.56
04/03/00 -7.64
04/13/00 - 7.02
10/27/97 -7.02
03/27/80 -6.15
Any cash on the sides will wait until a bottom is formed. The drillers are getting cheap with the recent declines. The market moves in wild swing swings on the drugs FEAR and GREED. Huge volume after hours with many techs negative. I believe many fund managers were dumping only to find 20% declines hitting them if they wanted out. Fidelity owns the most INTC of anyone with 15.6B and I expect Peter Lynch to make the rounds tomorrow. He did wonders in the Aug99 correction.
My Citigroup owns 6B of INTC so that will be hit.
Nasdaq 3000 gives one an opportunity to buy the stocks of 2001 at a great discount.
The three analyst Kumar, Niles , and Whittington all pumped INTC this week. Either stupid, bad timing, or devious to get their people out of INTC.
Congrats to Karen who was 95% cash.
Jack |
