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

To: Dealer who wrote (46867)	1/23/2002 1:42:38 PM
From: stockman_scott	Respond to of 65232

RESEARCH ALERT-J.P. Morgan raises chip stocks Wednesday January 23, 12:00 pm Eastern Time NEW YORK, Jan 23 (Reuters) - J.P. Morgan said on Wednesday that it raised its investment ratings on several chipmaker stocks to ``long-term buy'' from ``market perform,'' citing prospects of an industry turnaround. Companies receiving an upgrade include Applied Materials Inc. (NasdaqNM:AMAT - news), KLA-Tencor Corp. (NasdaqNM:KLAC - news), Novellus Systems Inc. (NasdaqNM:NVLS - news), Teradyne Inc. (NYSE:TER - news), and Varian Semiconductor Equipment Inc. (NasdaqNM:VSEA - news), the firm said in a research note. ``We believe that the majority of negative news is out and data will trend more positive than negative over the near-to-intermediate term,'' J.P. Morgan said. The December North American book-to-bill ratio of 0.78 to 1.0 reflects stabilization and initial positive orders. Novellus reported lower fourth-quarter profits, but managed to beat expectations and its bookings look positive in the current quarter. Also, shares of semiconductor capital equipment companies covered by J.P. Morgan have dropped an average of 23 percent since January's highs. ``We note that the near term will likely be marked with continuing positive and negative news flow from various sources encouraging share price volatility,'' J.P. Morgan said. ``There is no fundamental change to our overarching industry thesis that calls for a revenue bottom in the first-quarter 2002 timeframe with low growth into the back end of 2002, where we expect order acceleration,'' J.P. Morgan said. Varian and KLA-Tencor are expected to report results after the market closes on Jan. 23. J.P. Morgan said it expects ''relatively lackluster forward earnings and bookings guidance. We would again use potential share weakness as an opportunity to accumulate shares.'' KLA-Tecor shares rose $1.94 to $49.80 in early trading, while Varian Semiconductor gained $1.19 to $34.29. Novellus, Applied Materials, and Teradyne were also higher in early morning trading.