Close Dow +15.29 at 10517.14, S&P -1.05 at 1153.03, Nasdaq -7.89 at 1854.14: There was no giddy-up in today's market as it remained bridled by the thought that it may have gotten ahead of itself in discounting the strength of the economic recovery... Once again, cautious comments from Wall Street firms on the tech sector's prospects acted as a restraining influence... Credit Suisse FirstBoston, for instance, cut its 2002 PC unit growth forecast to 5% from 10% and lowered its earnings estimates for a number of computer hardware and electronics manufacturing services companies...
Deutsche Banc Alex.Brown, meanwhile, said it believes the probability has increased that a drop in DRAM prices will trigger a correction in tech stocks... The cautious outlooks, though, weren't limited to just the tech sector... Salomon Smith Barney was busy cutting its 2002-2003 earnings estimates for a number of oil drilling stocks due to lower dayrate and utilization assumptions... Not surprisingly, the tech and energy sectors weighed on the broader market... That wasn't always the case, however-- at least for the tech sector...
Earlier in the session, gains in the semiconductor group, and advances made by the telecom equipment shares, helped carry the major indices into positive territory... The relative strength in those areas, though, was fleeting and the tech-heavy Nasdaq spent the majority of the afternoon trade on the defensive... The loss of leadership from that key area weighed on the broader market as the Dow and S&P struggled to make any headway in the afternoon... Fortunately, the strength in the cyclical stocks was enough to offset the drag created by the tech and oil drilling shares... As such, the Dow and S&P ended the day little changed... Other stocks that helped limit the damage included the retail, restaurant, and trucking shares...
A mixed financial sector also provided a measure of support... Within the Dow, Eastman Kodak (EK +1.35), Caterpillar (CAT +1.17) and 3M (MMM +1.09) were its best performing components... Overall, today's session was pretty lackluster-- a point underscored by the relatively light volume at the NYSE and Nasdaq... Separately, several economic reports were released today, but they had little impact on investor sentiment... Initial claims for the week of March 9 fell 3K to 377K (consensus 375K) and January business inventories jumped 0.2% (consensus -0.4%)...
The increase in business inventories was the first increase in a year and it was consistent with the notion that inventory rebuilding is the catalyst behind the economic recovery...Nasdaq 100 -0.6%, Russell 2000 +0.5%, SOX -0.5%, S&P Midcap 400 +0.6%, NYSE Adv/Dec 1743/1390, Nasdaq Adv/Dec 1976/1586
7:02PM Oracle (ORCL) 13.44 -0.45: There was not a big surprise here. The company reported Q3 (Feb) EPS of $0.09, in line with the consensus estimate and in-line with the guidance provided on March 1. Revenue came in a bit light at $2.23 bln vs the consensus estimate of $2.42 bln. The stock is down $0.40 in after market trading as the tone of the conference call was quite bearish. While economic data shows an improving economy, Oracle says that technology spending will continue to lag the overall economy. Also, its Large Deal Indicator ($500,000+) for licensing is very poor. Deal flow is down and there are few large deals. A call with bearish comments was pretty much expected, so we do not expect a huge impact on other enterprise software stocks. For what it's worth, Oracle says it is being disproportionately affected relative to IBM and MSFT because during last year's boom market, Oracle was more closely tied to telcos, dot-coms, high technology, financial etc. Our take on it is that Oracle had some execution problems over the last few quarters as it put its eggs in the wrong baskets...One kernel of good news to take away from the call would be that management does not believe it is losing market share or deals to competitors of its database products. Overall, there was not much news to come out of this call as visibility remains low. -- Robert J. Reid, Briefing.com
6:26PM Thursday After Hours price changes vs 4pm ET levels: Oracle (ORCL 13.13 -0.31) reported Q3 earnings of $0.09 per share, in line with the revised consensus estimate; Q3 revenues came in at $2.23 bln versus the consensus estimate of $2.42 bln. Not much buying interest following the report as ORCL made some rather cautious sounding remarks on its conference call with respect to its fiscal Q4 (May) prospects; related stocks include SEBL, PSFT, IBM, and SAP.... Staying in the software space, Adobe Systems (00C0 37.80 +1.21) posted a Q1 profit of $0.22 per share, $0.02 better than the Multex consensus; revs came in at $267.9 mln versus the consensus of $268.1 mln. ADBE expects Q2 pro forma EPS of $0.24-$0.27 and rev of $305-$325 million (vs consensus of $0.24 and $306.9 mln); related stocks include the likes of MACR, CORL, and MSFT... Royal Caribbean (RCL 22.00 +1.00) is making waves following an upside earnings pre-announcement. For Q1 (Mar.), RCL sees earnings in the range of $0.25-$0.30 per share-- well above the current Multex consensus estimate for a net loss of $0.01 per share; says booking volumes this year have been strong, especially for close-in sailings, and that pricing, although still behind last year's levels, continues to improve. The positive guidance should bode well for CCL... Scholastic (SCHL 50.89 -2.12), meanwhile, is on the defensive in what looks to be a sell-the-news response. The publisher reported an in line Q3 (Feb) profit of $0.31 per share and said it expects FY02 results in the range of $2.45-$2.55 per share, which encompasses the current First Call consensus estimate of $2.50... For more details 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 1155, are 1 point above fair value while the Nasdaq 100 futures, at 1482, are 2 points below fair value.-- Patrick J. O'Hare, Briefing.com
4:08PM FSI Intl tops Q2 estimates (FSII) 10.05 -0.01: Reports Q2 loss of $0.25, $0.02 better than the Multex consensus; revs came in at $41.9 mln, vs consensus of $39.7 mln. The co expects Q3 revs of $25-$30 mln, lower than the consensus of $31.9 mln.
2:37PM Micron Tech: Multex consensus estimates for FebQ at -$0.07 and FY02 at -0.26 (MU) 32.35 -1.75:
2:32PM Micron Tech: Niles cuts earnings estimates (MU) 32.50 -1.60: Lehman analyst Dan Niles reduces estimate for MU's just completed FebQ to ($0.05) from $0.00 and for FY02 to $0.01 from $0.17. Believes Micron bit production during Q2 was less than anticipated down closer to 20% (vs 10%) and bit shipments down close to 10% (vs up 5%).
11:14AM Chartered Semi said to raise 2003 capex (CHRT) 27.10 +0.31: We are hearing Street talk that CHRT announced yesterday at a Merrill Lynch conference in Taiwan that they are increasing 2003 capex by 13-50% over 2002; while we have not confirmed this, if accurate this could be interpreted as another positive data point for semi equipment makers.
11:01AM KLA-Tencor Intraday Technical (KLAC) 64.38 +1.13: -- Update -- Attempting to recover from the three day larger than 11% slide. Thus far stymied near the bottom of yesterday's gap (64.44) but the intraday pattern and short term indicators suggest potential for at least further corrective gains. Support is at 63.8 with the critical intraday floor at 63.14. Next resistance is at 65(top of gap) and 65.45 (38% retrace of recent decline).
10:46AM Xilinx Intraday (XLNX) 41.70 +1.26: -- Technical -- Stock is demontrating relative strength, trading solidly in positive ground on strong volume. Has just edged over resistance at 41.60 and faces subsequent overhead in the range of 42.00/42.20 followed by additional overhead at 43.20. To the downside, look for initial support at 41.60 followed by subsequent support at 41.25.
9:33AM ATI Tech gains traction at Compaq --CSFB (ATYT) 13.60 +0.46: According to CSFB, co gained further traction with Compaq, garnering the default slot in one line of Compaq's 8000 Carbon series Presario desktop. Compaq's desktop PCs had been shipping default with NVIDIA (NVDA 53.35 -0.25) graphics processors in the past.
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I think we will see MU at 30 again soon. Will it be a good buy there?
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It's on my list, RtS |
