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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (3415)	6/6/2002 6:58:36 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95639

Just to keep the record of this decline documented, here is the tech stock summation by Briefing.com for today. Tech Stock Analysis Updated: 07-Jun-02 General Commentary In a word, "yuck.." While many of you might want to alter the spelling a bit, that about sums up the market's performance on Thursday… Stocks started lower and never staged a recovery… Nasdaq fell to within a whisker of its 6/4 low of 1548, raising expectations that penetration of this floor will leave the tech-heavy index vulnerable to a retest of its post-9/11 low of 1387. Nasdaq was done in by renewed weakness in the influential Philadelphia Semiconductor (SOX) index, which tumbled 14.7 points, or 3.1%… Bearish comments out of Merrill on Intel (INTC) and others within the group pressured the industry, and the sector, throughout the session… Investors were also unimpressed with the most recent Semiconductor Industry Association, or SIA, numbers despite generally optimistic growth forecasts for 2003 and 2004… Problem is that upon closer inspection the estimates revealed a small problem. In November, the SIA expected 2004 sales of $218 bln. They now put 2004 sales at $213 bln. And don't bank on that lost ground being made up in 2005, for which they are forecasting just 0.9% growth to $215 bln. All that has happened in the last seven months is that the 2002 forecast has come down a bit, thus boosting the 2003 growth rate but reducing the level of sales in both 2003 and 2004. The message we take away from this report is simply that the semi sector is recovering, but the recovery is not living up to expectations. Given already rich valuations in the sector, which has been discounting a reasonably healthy recovery, any shortfall in the actual recovery will tend to depress the stocks. That was essentially the message behind Merrill's downgrades on Thursday, and it's a message worth taking seriously. We are long past the point when semi stocks can do better simply because the sector's sales have turned the corner and are now heading higher. Growth is not enough - growth in excess of expectations is needed, and yesterday's SIA data provide no evidence of that. Outlook for Friday isn't much brighter, as Intel lowered its sales and gross margin guidance after the close… Now sees Q2 sales of $6.2 to $6.5 bln versus earlier guidance of $6.5 to $7.0 bln… Gross margins now expected in the area of 49%, down from projection of 53%… Though some of the bad news was already built into the share price, Intel's announcement will simply add to the preponderance of bearish news hitting the sector/market. Key support for the Nasdaq can be found in the 1500 area… This floor represents two standard deviations from the regression of the Jan/Jun slide, an area that has acted as strong support on three prior occasions during this period… Initial resistance is at 1595-1600, with a secondary ceiling in the 1640-50 range. Robert Walberg, Briefing.com