From Briefing.com: 5:38PM Tuesday After Hours price changes vs 4pm ET levels: Institutional Shareholder Services-- a prominent adviser to large investors-- declared its support for Hewlett-Packard's (HWP 20.20 -0.39) proposed $22.3 bln acquisition of Compaq (CPQ 11.25 +0.67). As expected, the biggest critic of the proposed acquisition, Walter Hewlett, was quick to denounce the decision... In other news, McDATA (MCDT 12.60 -3.33) is getting hit hard in extended action after the data storage company lowered its Q1 forecast to a loss of $0.02-$0.04 per share on revenues of $73-$78 mln versus prior guidance of $0.00-$0.02 on revenues of $85-$95 mln; First Call consensus is profit of $0.02 and $91 mln. MCDT cited the continuing cautious approach to IT storage and related infrastructure investment spending in the early months of 2002 for the revision; related stocks include BRCD, EMLX, QLGC, and NTAP... Broadline retailer Kohl's (KSS 66.98 +0.82) reported Q4 earnings of $0.68 per share, $0.03 better than the consensus estimate; Q4 revenues came in at $2.72 bln versus the consensus estimate of $2.68 bln; related stocks include the likes of WMT, TGT, S, FD and KM.... Finally, Amazon.com (AMZN 15.32 -0.65) announced that Warren Jenson, its CFO since Sept. 1999, intends to resign later this year. In the interim, he will continue his duties for several months and assist AMZN in recruiting his successor... For more detail on these, and other developments, be sure to visit Briefing.com's In Play, Earnings Calendar, and Guidance pages. Presently, the S&P futures, at 1148, are 2 points above fair value while the Nasdaq 100 futures, at 1497, are 3 points below fair value.-- Patrick J. O'Hare, Briefing.com
Close Dow -153.41 at 10433.41, S&P -7.71 at 1146.13, Nasdaq +6.98 at 1866.30: With the market having rallied over the last two sessions heading into today, you had to think any gain in indices would be impressive. Well, the Dow suffered from profit taking, but the Nasdaq was able to edge even higher. The Semiconductor Index (SOX 613.90 +12.99) has been most impressive recently. It is up 20% since Friday's open and this is its highest close since August 7. The group was helped today by an Intel (INTC 32.70 +0.85) upgrade and some positive industry data. Leaders today were GNSS +14%, VTSS +8%, ANAD +8%....
Another catalyst early in the session was the release of the ISM Services index. It rose to 58.7% in February from 49.6% in January; well above the 51.0% consensus and indicative of renewed growth in the economy. Also on the economic front, the Challenger layoff number was a boost -- corporate layoff announcements fell to 128,115 in February, the lowest total since last June. However, the excitement soon faded as the Dow and Nasdaq quickly slipped back below where they were when the report was released. The market has been so strong the last two days that traders were happy to take some profits on the bullish report. Wireless stocks rebounded impressively as Nextel (NXTL 5.48 +0.78) affirmed guidance, perhaps a short squeeze also helped the group: NXTL +17%, WWCA +12%, TPC +11%.....The most notable weakness was with the cyclicals. Many sectors have been near 52-week highs, but those groups were weak today. Autos were hurt by Bush imposing steel tariffs which will raise steel prices....The retailers were very weak as CSFB downgraded the retail group. Airlines were also very weak as UBS Warburg downgraded some airline stocks (LUV, AMR, DAL) following the post-9/11 rebound. It's a quiet session after the bell, headed by KSS earnings report.DJTA -2.3%, DJUA +1.5%, DOT +0.4%, Nasdaq 100 +0.3%, Russell 2000 -0.1%, SOX +2.2%, S&P Midcap 400 -0.2%, XOI -0.6%, NYSE Adv/Dec 1591/1547, Nasdaq Adv/Dec 1893/1691
4:31PM McDATA lowers Q1 guidance (MCDT) 15.93 -2.20: -- Update -- Co lowers their Q1 forecast to a loss of $0.02-$0.04 on revs of $73-$78 mln, vs prior guidance of $0.00-$0.02 on revs of $85-$95 mln. The co will hold a webcast today at 5:00 PM ET. The co cites the continuing cautious approach to IT storage and related infrastructure investment spending in the early months of 2002 as the reason for the revision.
2:46PM EXFO strong on new product release (EXFO) 7.41 +1.40: Shares posting a 23.3% intraday advance on this morning's new product release; product is a semi-automated assembly workstation for array-type devices.
1:19PM Infineon Tech files $1.5 billion shelf (IFX) 24.65 -0.59: Company announces it has filed a "shelf" registration statement on Form F-3 with the SEC; under terms of the registration the company will be able to issue ordinary shares or debt securities, in one or more offerings from time to time, up to an aggregate offering price of $1.5 billion.
1:17PM Nasdaq Composite Intraday : -- Technical -- Index continues to hold in the upper half of its intraday range. Currently trading at 1875, look for initial resistance at 1878/1880 followed by additional overhead at 1898 which represents a 50% retracement of the Jan/Feb sell wave. To the downside, look for initial support at 1869 followed by a subsequent floor in the range of 1857/1860.
12:00AM RF Micro Device Intraday (RFMD) 19.81 +1.19: -- Technical -- Worth keeping an eye on as the session progresses. Stock is pulling back after edging above resistance at 20.00 on stronger than average daily volume before mid-day. Look for subsequent overhead at 20.85 which represents its 100-day simple moving average followed by subsequent overhead at 21.80. To the downside look for initial support at 20.00 followed by subsequent support at 19.40.
11:23AM LTX Corp may have won Analog Devices contract (LTXX) 25.35 -0.02: We are hearing Street talk that LTXX announced at the Morgan Stanley Semi conference that they had won a contract from ADI, perhaps beating out the incumbent supplier TER (-1.2%). We have no confirmation for this, and have not heard about the size of the contract.
11:39AM Intel (INTC) 32.93 +1.08: Intel will provide a mid-quarter update following the close of trading on Thursday. For reminder's sake, Intel indicated in January that it expects Q1 revenues to be in the range of $6.4-7.0 bln. In mid-February, though, Intel's stock took a hit amid concerns (i.e. rumors) that its quarter was tracking below forecast due to pricing pressure on the Pentium 4. Shortly thereafter, Banc of America Securities fanned the flames with a contention that Intel's visibility into March and beyond was weakening. BofA did say it felt Q1 was on track, but due to concerns over the declining visbility and the potential for weaker pricing, it cut its EPS estimates for the June and Sept. quarters. In response to that commentary, CS First Boston and Salomon Smith Barney both defended Intel. The former said the market's response to BofA's call was an overreaction and the latter said it would be buyers of INTC up to $45. Earlier today, Intel drew some added support from Morgan Stanley, which upgraded its rating to STRONG BUY from Outperform. That bullish opinion was predicated on Morgan Stanley's belief that Intel will enjoy a significant increase in margins and earnings power, as well as the potential to record positive earnings surprises in FY02. As for Q1, Morgan Stanley expects Intel to suggest revenues will be slightly above the mid-point of its guidance range. Separately, Morgan Stanley thinks a richer mix of server and notebook processors could provide additional upside to the mid-point of Intel's gross margin guidance of 50% plus or minus a couple of points. Yesterday, Dan Niles of Lehman Bros. said he thinks Intel's gross margin guidance will remain unchanged and that the company will tighten its revenue range to $6.6-6.7 bln. Niles also noted concerns about Q2 as current backlog cancellations are likely to drive a seasonally down Q2 versus current expectations for up 1%. Intel isn't expected to provide any commentary on Q2 in Thursday's update, but its comments on Q1 are expected to be a market-moving catalyst.-- Patrick J. O'Hare, Briefing.com
10:02AM ISM Services index rose to 58.7% in February : The ISM Services index rose to 58.7% in February from 49.6% in January; well above the 51.0% consensus and indicative of renewed growth in the economy. Along with the Challenger layoff number, this report will be viewed positively. The market has traded up on these reports: Dow -26, Nasdaq +19.
10:00AM Sector Watch: Semiconductor : Group leads the turnaround for the Nasdaq Composite with the SOX index (610) edging to a new recovery high and the best level since August. Stocks providing leadership include: BRCM +4%, INTC +3.1%, AMD +2.6%, XLNX +1.9% and LSCC +1.4%. Next resistance for the index is in the 613 area. The Semiconductor HOLDRs (47.9) are outperforming the SOX index on a percentage basis but is still below its recovery high at 48.45 from Jan. Initial resistance if a breakout is seen is at 48.83 followed by the 50/50.90 area. Important intraday support is at 47.09.
9:17AM SanDisk Corp upped at Morgan Stanley (SNDK) 18.33: Morgan Stanley upgrades to OUTPERFORM from Neutral, as the March qtr seems to be tracking ahead of cautious expectations; raises ests for Q1, 2002, and 2003; price target is $30.
9:13AM Intel designing chips for fiber optic networks (INTC) 31.85: -- Update -- Traders citing Bloomberg are telling us that INTC has started building customized chips for fiber optic networks, with the intent of replacing bulky, labor-intensive modules with cheaper, smaller semiconductors; the fiber optics components mkt is currently led by JDSU.
7:46AM SIA data: January semi sales : The Semiconductor Industry Association reported last night that worldwide semi sales in Jan decreased 1.7% sequentially from Dec. Banc of America notes that DRAM and PLD sales were up 24.2% and 21.3% respectively from Dec, and were the best performing groups; standard cell ASIC and gate array sales registered the largest sequential decline (4.9%); microcontroller sales were also weak, and declined 4.7% sequentially.
7:39AM Texas Instruments reaffirms guidance (TXN) 33.99: Co reiterated its Q1 outlook last night and said semi orders it received in the first two months of the quarter were strong compared with Q4, and that it still expects to post revs about even with Q4 and breakeven pro forma EPS in Q1 (in line with consensus). The co also said that if the strength in orders continued, semi rev should grow sequentially in Q2.
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