From Briefing.com: 1:32PM Bear Stearns cuts semi outlook for 2003: Bear Stearns cuts their 2003 semi industry rev growth forecast to 14% from 17% based on a weak Q4 and probable weakness in 1H03; says rally is premature and reiterates Mkt Weight rating for the group.
14:00 ET Dow +36, Nasdaq -13, S&P -0.30: [BRIEFING.COM] More of the same with the indices slipping under the weight of a weak semiconductor sector and a pullback in the transportation and banking stocks... Valuation concerns, misgivings about the timing of a pickup in end demand, and an intra-day call from Bear Stearns, which cut its 2003 semi industry revenue growth forecast to 14% from 17% and said the recent rally is premature, have been motivating factors behind today's profit taking activity in the white-hot semiconductor area... The SOX Index, which had been up 56% since its Oct. lows, is down 5.3%... NYSE Adv/Dec 1388/1732... Nasdaq Adv/Dec 1340/1795.
12:06PM Sector Watch: Semiconductor : Negative commentary from the Street (Lehman) and an individual issue (AMAT job cuts) has the sector (SOX 317 -2.8%) on the defensive today with TXN -4.9%, ALTR -4.1%, AMAT -3.9%, TER -3.4%, LLTC -3.6% and LSCC -3% the weakest performers. SOX failure to work back through 320/322 area leaves the door open to further weakness with next support at 313. A secondary barrier is at 310 with a stronger floor coming into play at 305/304. MOT (+0.2%) only component bucking the bias but it has been stymied by strong resistance in the 10.10/10.20 area.
9:25AM Kulicke & Soffa exploring options for non-core biz units (KLIC) 3.86: Announces that it is exploring options for certain of its non-core business units, including their potential sale; co has begun very preliminary discussions with potential buyers while concurrently exploring other alternatives.
9:07AM Solectron upgraded at AG Edwards (SLR) 3.12: AG Edwards upgrades to HOLD from Sell given reduced liquidity risk and relative valuation.
8:53AM Analog Devices estimates cut at SG Cowen (ADI) 30.71: SG Cowen cuts 2003 est to $0.80 from $0.90 (consensus is $0.88) and expects the rest of the Street to trim numbers between now and when ADI reports on Nov 19; with the stock up roughly 65% in the last month (vs the SOX up roughly 55%), firm believes there is risk to near-term stock performance as numbers are cut.
9:24AM Technical Levels : Okay, so yesterday we were looking towards resistance in the range of 1,419 to 1,423 as an important near-term test for the index. In fact, we've had an eye on that area for several weeks now -- since October 17th to be specific. Well, as it turns out, yesterday's impressive rally did indeed top out on an intraday basis at 1,420.
Now those of you that haven't been watching closely may wonder why this 1,419 to 1,423 range is such an obvious technical level. Well, this area is notable as it coincides with three points of interest over the prior five years -- 1) the September 11th-induced reaction lows which bottomed at 1,423, 2) the reaction lows of October 1998 which bottomed at 1,419 and 3) the ordinary course of its original uptrend during the Summer of 1997. Of more immediate interest for our purposes, this area also happens to mark -- almost precisely -- the top of the prior leg higher which closed on August 22nd at 1,422.95.
So we've already characterized yesterday's rally as 'impressive.' What does that really mean though? Well, volume comfortably exceeded 2.0 billion total shares traded and advancing volume outpaced declining volume by a 5 to 1 margin. So that advance/decline ratio ended well off its intraday highs in the ballpark of 15 to 1 but finished with a solidly bullish read nonetheless.
Yet despite the favorable market internals and the strong volume, the index finished the session by carving out an indecisive 'doji' on the candlestick chart. A doji is a session in which the opening and closing levels are very close to the same level -- in the case of yesterday's session 1,394 and 1,396 respectively. Now the doji is conventionally read to represent hesitation or indecision. On the one hand, yesterday's indecision isn't entirely surprising with a federal election today and the Fed's decision on interest rates due tomorrow. The alternative interpretation may be that yesterday's price action is a pre-cursor to some additional consolidation.
For those traders operating on a shorter-term basis, the technical story is reasonably simple. Look for initial support at congestion in the area of 1,380 -- that's followed by additional support at chart congestion around 1,360 and a more important floor in the range of 1,347 to 1,350. So broadly speaking, all this suggests the index should have notable support in the vicinity of 1,347 to 1,360.
To the upside, look for notable initial resistance at yesterday's open/close levels in the range of 1,394 to 1,396. That's followed by more significant overhead around 1,420 which we've already addressed ad nauseam. If the Nasdaq should successfully navigate those two levels, look for less significant but notable resistance in the range of prior chart congestion at 1,448 to 1,452. -- Mike Ashbaugh, Briefing.com
After the close yesterday, Applied Materials (AMAT 16.45) announced sizable job cuts . This may help short-term profitability, but AMAT has been reluctant to cut positions in case of a rebound in the highly cyclical chip equipment industry. The company is throwing in the towel on that. The market is interpreting this as a belief that no significant rebound is in sight. Compounding the problem, Lehman Brothers made negative comments on the chip equipment industry, suggesting that investors are too hopeful of a rebound in demand and overlooking weak fundamentals.
From Earlier: After the close yesterday, Applied Materials (AMAT 16.45) announced sizable job cuts . This may help short-term profitability, but AMAT has been reluctant to cut positions in case of a rebound in the highly cyclical chip equipment industry. The company is throwing in the towel on that. The market is interpreting this as a belief that no significant rebound is in sight. Compounding the problem, Lehman Brothers made negative comments on the chip equipment industry, suggesting that investors are too hopeful of a rebound in demand and overlooking weak fundamentals.
finance.yahoo.com^SOXX+ADI+ALTR+AMAT+AMD+BRCM+INTC+KLAC+KLIC+LLTC+LSCC+LSI+MOT+MU+MXIM+NSM+NVLS+TER+TXN+XLNX+^VIX+^IXIC+^SPX&d=t
The market is trying hard to rebound here again G.
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