From Briefing.com: 6:51PM Weekly Wrap :
September is normally a difficult month for the market, and based on the first week of action this September is shaping up to be much like the others... Traders returned from their end-of-summer holidays nervous about earnings, the economy and the potential for war with Iraq... So they sold, and they sold hard - particularly in the large-cap names which helped pace the recent recovery.
Techs were hit especially hard this week, amid concern over Intel's mid-quarter update... Analysts were generally bearish about the outlook for semis going into INTC's mid-quarter update, sending the SOX to a new 52-wk low and INTC down by nearly 10%... Both the stock and the group rebounded a bit on Friday, as the Intel guidance wasn't as bearish as feared... However, INTC's valuatios remain high given the outlook and we doubt it will be long before stock finds itself back on the defensive.
3:38PM Qualcomm declines on Samsung chip story (QCOM) 28.46 +1.70: We are hearing that the Korean Times newspaper has an article stating that Samsung is going to produce its own chips, rather than using QCOM's. While we have posted this rumor before (see Sept 4), we're hearing this story is being taken seriously by the Street and that Deutsche Securities has issued cautious comments on the subject.
3:30PM : Looking towards next week, the economic calendar has a few notable reports. Nonetheless, the impact reports appear to be back-end loaded. Closing out next week on Friday, both the preliminary Michigan Sentiment Index and Retail Sales data are set for release. For a complete list of what to expect on the economic front, please visit Briefing.com's Economic Calendar.NYSE Adv/Dec 2329/874, Nasdaq Adv/Dec 2228/1024
2:53PM Lattice Semi files for sale of 2.3 mln shares (LSCC) 6.91 +0.26: Co files an S-3 today allowing former shareholders of Cerdelinx Technologies to resell up to 2.3 mln shares of LSCC common stock issued to them in connection with LSCC's acquisition of the co. (Float 57.1 mln shares.)
2:58PM Thomas Weisel on Semis : As predicted by firm pre-open, semiconductor equipment sector is rallying (+5.4%) following Intel's (INTC 16.36 +1.25) mid-qrtr update, where co. reiterated guidance despite Street's fear of warning; report also indicated recent price cuts have had near-term positive effect on distributor channel sales -welcome news following recent expectations of poor "back-to-school" season. With potential near-term downside from INTC gone, firm recommends sector to long-term investors; likes secular growth prospects of KLA-Tencor (KLAC 32.10 +2.14) due to continuously strong fundamentals; suggests Novellus (NVLS 23.79 +1.80) based on compelling valuation (trading 15% below its average historical trough multiple); thinks Applied Materials (AMAT 12.98 +0.91) has significant leverage to INTC; is currently trading roughly in-line with its 6-year average trough level.
2:35PM Oracle (ORCL) 9.71 +0.59: Soundview Techonology is upbeat on this tech giant; thinks 7% pullback over last month offers potential for good upside; maintains Outperform rating and price target of $12. Although firm thinks co. will be cautious in its comments on outlook, post-qrtr checks indicate ORCL will meet or beat consensus due to stabilized demand in Americas and improved visibility; although international conditions remain uncertain, weak dollar provides notable cushion. Shares are 6.5% up on bullish note.
12:25PM CDW Computer (CDWC) 46.06 +4.76: Yesterday, company issued upside EPS guidance for Q3, citing robust MSFT sales, and stock is surging (+11.5%) on the news. Also providing positive support, Thomas Weisel reiterated Buy. Microsoft business surge aside, firm believes CDWC is taking market share from its competition, and, as a result, growing faster than the industry. Firm says company's superior direct marketing strategy and strong balance sheet should allow it to dominate its peers going forward; sees compelling valuation.
1:48PM Motorola guidance could be too high (MOT) 12.25 +0.51: We are hearing Street talk that Bear Stearns is saying MOT's current guidance may be too high in light of the following data points: this morning's CY preannouncement (MOT is a top customer of CY), evidence of price cuts in handsets, and heightened competition from NOK.
12:41PM CY leads new low list after lowering guidance; NSM hovers : Cypress Semi (CY 8.89 -0.64)... Ford (F 10.22 -0.47)... Retek (RETK 4.32 -0.16) are some of the major names on the new 52-week low list today... Cypress has turned red after gapping up 4% on Intel-inspired chip rally. However, issue has turned defensive since Bloomberg.com report that CY lowered guidance this morning at the SG Cowen conference. According to report, co now sees a Q3 loss of $0.02-$0.03 and breakeven EPS for Q4 (Multex consensus -$0.01 and $0.03)... Notable that competitor National Semi (NSM 13.56 +0.06) has retreated almost to the flat line, and is hovering just above its one-yr low of $13.45 set yesterday.
11:28AM Skyworks (SWKS) 4.59 +0.53: Before open, CSFB initiated with a Buy rating and price target of $6.50, believing company is best-positioned wireless pure-play component supplier to profitably capitalize on the inflection point in handset outsourcing and the move to system solutions; also thinks recent liquidity concerns are overstated. While firm believes shift towards outsourcing will strain profitability, stock should be a relative winner given it: (1) should increase its revenue/phone, taking share from point product competitors, (2) has the most complete product portfolio and SG&A infrastructure, and, (3) has relationships with all the major customers... SWKS currently up 13%.
10:39AM INTC slips to fresh session low 16.22 +1.11: After gapping up to $16.40 and pushing to a morning high of $16.55, issue has begun to consolidate early gains. First area of support is $16.20/$16.15 followed by $16.00.
10:26AM Cisco Systems (CSCO) 12.96 +0.19: -- Correction -- We incorrectly stated at 10:07 that CSCO made cautious comments at the Salomon Smith Barney tech conference; in fact, Cisco was not making cautious comments - Salomon was making cautious comments about CSCO.
10:24AM Sector Watch: Semiconductor : Better than 6% surge in early trade has been led by Intel (+8.2%) and the semi equipment components (AMAT +6.5%, KLAC +6.5%, NVLS +7.1%) but the index (SOX at 290) has edged slightly off of the best level of the day after testing resistance in the 292/293 area. Intraday supports are at 288 and 285. Continued posture above here leaves the door open for an extension. Next resistance is at 296/297. Support for the Semi HOLDRs is at 23.30, 23.10 and 22.8.
10:01AM Nasdaq Composite Intraday : -- Technical -- Impressive 3% sprint off the open for the index has left it just shy of resistance at 1294/1298 (Aug 29 low, Sep 4 high and a minor retracement). Initial supports are at 1282/1280 and 1275. Takes sustained slide below 1270 to inflict any short term damage. Secondary resistances are found at 1302/1304, 1314 (the top of the Sep 03 gap) and 1320.
9:18AM Gapping Up/Down : Gapping up: CRY +100% (FDA allows to resume limited tissue processing), CDWC +10% (raises guidance), INTC +7.5% (upgraded after mid-qtr update), ASYT +7% (affirms guidance), AMAT +6% (follows INTC higher),
9:08AM Stocks To Watch : The firmly bullish bias evident in pre-market action in response to the Mid-Q update from Intel (INTC +7.7%) last night has improved in the wake of the better than expected employment data. INTC lowered the upper end of its previous revenue guidance range for Q3 but maintained its guidance for gross margins. As for capex, the company also left guidance of $5.0 bln-$5.2 bln unchanged and this has provided a lift to tech in general and semi equipment stocks (AMAT +5.9%, NVLS +5.5%, KLAC +4.3%) in particular. Lehman has responded by upgrading INTC to EQUAL-WEIGHT from Underweight. The importance of the call can be seen by the lack of reaction to the downgrade of analog semi stocks (ADI +1.9%, LLTC +2.7%, MXIM +2.5%) by Merrill Lynch; firm cited diminishing likelihood of strong Q4 growth.
8:05AM Merrill downgrades select analog semi names : Merrill Lynch downgrades ADI, LLTC, and MXIM due to the diminishing likelihood of strong Q4 growth in the analog semi biz; cuts ADI to Near-Term NEUTRAL from Buy, LLTC to Near-Term REDUCE/SELL from Neutral, and MXIM to Near-Term REDUCE/SELL from Buy.
7:51AM Cymer estimates cut by Lehman (CYMI) 21.81: Lehman cuts Q4 and 2003 ests due to the potential for order weakness in 2H02 resulting from concerns over a potential slowdown in demand from leading OEM customers; CYMI will give their Q3 mid-qtr update next week, and firm expects co to possibly guide to low end of rev range of 5-10% QoQ growth. Cuts Q4 est to $0.17 from $0.20 and 2003 to $1.15 from $1.22 (both below consensus).
7:36AM NVIDIA may delay new chip (NVDA) 9.06: Theinquirer.net says that Japanese web site PC Watch claims to have inside information that indicates NVDA will introduce its next graphics chip in Q1, missing the crucial Christmas selling season.
6:57AM Intel upped to Equal-Weight from Underweight at Lehman (INTC) 15.11: Lehman analyst Dan Niles upgrades to EQUAL-WEIGHT from Underweight following the mid-qtr update. Says revenue expectations and valuation (22x calendar yr 2003 earnings, 3.7x sales) are now more reasonable.
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Thanks for the updated tables Don. I suspect after earnings come out next quarter we will start to see expectations for future earnings start to rise again.
RtS |
