From Briefing.com: Updated: 04-Feb-03 - General Commentary - Bolstered by a reasonably strong ISM report, investors bid stocks narrowly higher in relatively quiet trading. Data, which showed modest growth in the manufacturing sector, raised hopes that the economy would gain momentum in 2003. However, mindful of fact that data have been inconsistent and that risk of war remains great, investors were unwilling to hit the buy side aggressively.
Caution ahead of Cisco's earnings report, due after Tuesday's close, also capped the sector's upside. Not many traders excited about establishing new long positions in tech ahead of such a weighty report. Disappointing headline figures and/or guidance could easily take a fragile tech sector for another ride lower.
About the only thing going for the sector at the moment is the oversold technical posture. And as we noted the other day, technical indicators can remain oversold for a long time before a meaningful advance takes place. This is especially true when the dark clouds of war hang over the marketplace.
In other words, traders shouldn't be surprised by the occasional up day. Just don't look for the gains to be big or for them to last more than a session or two. Right now we are in an environment in which traders see gains as another opportunity to sell.
Robert Walberg
Close Dow +56.01 at 8108.82, S&P +4.62 at 860.32, Nasdaq +2.68 at 1323.79: In a quiet trading day, the major indices finished the session modestly higher after holding to relatively tight ranges for the bulk of the session... The key catalysts for the positive day for the stock market were a pair of encouraging reports on the housing market and manufacturing sector... Specifically, the ISM Index for January, a national manufacturing report, checked in at 53.9% from 55.2% in December...
Although it was in line with consensus expectations, the solid showings in the new orders component (at 59.7%) and production component (at 56.3%) effectively dismissed most talk of a purely seasonal advance in the December ISM reading, and offered further evidence that the manufacturing sector is holding its own after a slump in late summer/early fall... Additionally, the construction spending report for December jumped 1.2% (consensus +0.3%), which could lead to an upward revision of Q4 GDP after the November figure was revised higher to 0.9% from 0.3%... For Briefing.com's take on these reports and their implications for the pace of the economy's recovery, be sure to visit Story Stocks...
Other developments which boded well for the bulls included some sizable gains on the European bourses and the relief in crude oil prices... In particular, crude oil dropped over 2% to $32.76 on talk that OPEC will not cut production levels despite the fact the Venezuelan strike ended this weekend for most of its workers... As a result of these supportive factors, the major indices spent the majority of the session trading in positive territory, bolstered by respectable gains in retail, financial, and drug... The Dow, for its part, was the winning standout among the major indices as a number of its components were the targets of positive analyst commentary...
To wit, Eastman Kodak (EK 31.61 +1.31) and Home Depot (HD 21.30 +0.40) were among the strongest stocks on the Dow as Legg Mason's Bill Miller named them as his 'favorite stock positions' in Barrons this weekend... The Nasdaq, however, trailed the blue chip averages in terms of performance as it fell victim to some late-day selling in its biotech, semiconductor, and large-cap tech issues... The major indices, in general, failed to garner additional buying interest off their early morning gains as buyers lacked the conviction necessary to push the major indices higher...
This sentiment was evident in the fact that volume levels were light-to-moderate, and the breadth figures at the NYSE and Nasdaq spent most of the session virtually split between advancers and decliners... Also, buyers may have shown a degree of restraint ahead of Secretary of State Colin Powell's address to the UN Security Council on Wednesday... Finally, the defense sector and health care stocks remained noteworthy laggards on account of some unfavorable developments over the weekend...
Specifically, the explosion of the space shuttle Columbia weighed heavily on Boeing (BA 31.02 -0.57) and Lockheed Martin (LMT 49.60 -1.45) as the Wall Street Journal suggested it could dent sales and profits at the NASA defense contractors... As for health care, late Friday reports that HCA Healthcare's (HCA 41.23 -1.51) Cedars Medical Center in Miami suspended certain privileges of eight physicians after a review discovered that they might have been involved in performing unnecessary procedures, acted as a drag on those stocks...
Elsewhere, the treasury market weakened in response to better economic data, relative equity strength, and supply pressures stemming from White House budget estimates that put the deficit at a greater-than-expected $304 bln in FY03, and $307 bln in FY04... NYSE Adv/Dec 1737/1525, Nasdaq Adv/Dec 1477/1789
4:11PM Solectron announces HP contract (SLR) 3.52 -0.07: Co says it has reached a manufacturing and supply agreement with HP. "At anticipated production levels, the contract would generate about $1.4 billion in sales for Solectron over five years."
4:06PM Rudolph Tech beats by one, guides below consensus (RTEC) 14.23 -0.93: Reports Q4 (Dec) earnings of $0.03 per share, $0.01 better than the Multex consensus of $0.02; revenues rose 59.9% year/year to $17.1 mln vs the $16.2 mln consensus. Company sees Q1 EPS coming in at breakeven vs Multex consensus of $0.02, revenues of $14.5-15.4 mln vs Multex consensus of $15.5 mln.
2:20PM New High Profile -- Westell Tech (WSTL) 2.71 +0.45: -- Update -- Shares of DSL modem supplier surge to a new 52-week high following news this morning that co's DSL Dual Port modems have been selected by BellSouth. News has lifted the stock 20% on volume of 600K (4x avg). In an upgrade last week by RW Baird, firm boosted its FY03 est from $0.09 to $0.16 (p/e 17) and FY04 from $0.11 to $0.25 (p/e 10.8). Reasons for the upgrade included sustained profitability, increased DSL spending initiatives at the RBOCs, new customer potential, and improved capital structure. Firm's price target went to $4 from $2... WSTL's mkt-cap is $180 mln
1:57PM NVIDIA unclear on Microsoft volume for the quarter (NVDA) 10.59 +0.27: Reuters reports that co is unsure of the volume of graphics chips Microsoft will order this quarter. "How much they are going to order in (the first quarter) is up in the air," NVIDIA's CFO said at a Thomas Weisel Partners technology conference. Nvidia and Microsoft are in arbitration over the prices Microsoft pays for the graphics chips it buys for the Xbox and the volume in which those chips are produced. Nvidia has said it could be forced to produce the chips at a loss if it loses the arbitration, which is expected to conclude this year. -- Reuters.
9:44AM SLAB -2% lower on rumor of contract loss :
9:23AM Brooks-PRI Automation names former KLA exec to COO post (BRKS) 10.50: (As a sidenote, one of the reasons cited in Unterberg's upgrade of BRKS last week was anticipation of a very near-term COO hire).
8:24AM Conexant's set-top box selected by Samsung Electronics (CNXT) 1.21: Announces that its digital satellite set-top box semiconductor solution has been chosen by Samsung Electronics for deployment in Korea Digital Satellite Broadcasting's SkyLife satellite television network.
8:25AM Westell Tech modem selected by BellSouth (WSTL) 2.26: Announces that BellSouth has selected Westell as a provider of DSL Dual Port modems for BellSouth FastAccess DSL customers.
8:06AM Microchip upped to Outperform from Neutral at Soundview (MCHP) 22.09: Soundview upgades to Outperform from Neutral following checks indicating more encouraging outlook for pricing and mix; thinks these improvements, coupled with a reduction in Street estimates and valuation near the lower end of its trading range, make stock attractive at present levels.
7:40AM RF Micro Device upgraded at Lehman (RFMD) 5.62: Lehman upgrades to Equal-Weight from Underweight, saying concerns over a potential inventory build heading into 1H03 are overblown and the stock price already discounts this scenario; also, recent comments from mgmt provides additional confidence that while the handset industry is growing, RFMD possesses the ability to grow faster as they continue to marginalize other players in the RFIC industry and attack the faster growing ODM mkt; price target is $11.
7:14AM Advanced Micro delays release of Hammer PC chip (AMD) 5.24: Co announced late Friday that it will delay the introduction of its "Hammer" chip for PCs until Sept, although the Opteron version for servers and technical workstations will be introduced on April 22; the chip was originally slated to be released for PCs by the end of 2002 or 1H03
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+BRCM+BRKS+CNXT+INTC+KLAC+LLTC+LSCC+LSI+MCHP+MOT+MU+MXIM+NSM+NVDA+NVLS+RFMD+RTEC+SLAB+SLR+TER+TXN+WSTL+XLNX+^IXIC+^NDX+^VIX+^VXN+^SPX+^STI.N+SMH&d=t
Thanks for posting the CSFB outlook Alastair.
On a short term basis the put to call ratio spiked up again over 1 tonight closing at 1.15:
cboe.com
stockcharts.com[h,a]dallyyay[dc][pi!d21,2!f][vc60][iLg]&pref=G
RtS |
