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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (24905)	12/14/2000 12:25:19 AM
From: Dealer	Read Replies (1) \| Respond to of 65232

Merrill Lynch DOWNGRADES-- Cloud falls over chip gear stocks By Janet Haney, CBS.MarketWatch.com Last Update: 4:22 PM ET Dec 13, 2000 Newswatch Latest Headlines Get Alerted NEW YORK (CBS.MW) -- Chip equipment stocks were the talk of the semiconductor world Wednesday, as analysts cast doubt over the outlook for capital-equipment spending in the industry. "We believe that semiconductor equipment orders are likely to decline over the next two quarters," Prudential Securities analyst Shekhar Pramanick wrote in a morning research note. "However, we do believe that semiconductor manufacturers have not added excessive capacity in the current cycle and orders could return once the end-market demand starts to see positive momentum," Pramanick added. All the same, Prudential lowered earnings estimates, price targets and ratings on six chip equipment stocks -- Applied Materials (AMAT: news, msgs) , KLA-Tencor (KLAC: news, msgs) , Lam Research (LRCX: news, msgs) , Kulicke & Soffa (KLIC: news, msgs) , Novellus Systems (NVLS: news, msgs) and Teradyne (TER: news, msgs) . As a result, Applied Materials' stock gave back $2.19 to $42.69, KLA-Tencor shares shed $2.19 to $30.44 and Lam Research stock lost $1.50 to $16.56. Separately, Merrill Lynch provided an updated forecast for the semiconductor equipment industry, saying "semiconductor capital spending will slow more dramatically in 2001 than our previous forecast." "We now expect capital spending to grow only 6 percent in 2001 versus our October forecast of 12 percent growth," Merrill analyst Brett Hodess wrote. The investment firm changed its rating and estimate guidance on some smaller chip equipment companies it follows, including Cymer (CYMI: news, msgs) , Asyst Technologies (ASYT: news, msgs) and ThermaWave (TWAV: news, msgs) . Likewise, Salomon Smith Barney cut its ratings on a slew of chip equipment companies. See Ratings page. Wall Street's comments caused the Philadelphia Semiconductor Index ($SOX: news, msgs) , which tracks 16 chip and chip equipment stocks, to fall 6.5 percent.