From Briefing.com: So those Thursday pre-market economic reports came in roughly in line. The result was the first real session that felt like summer -- each of the major averages favored the flatline for the better part of the session. Yet consistent with the recent pattern, the markets did experience late day buy interest to affect a modestly positive close.
From a technical standpoint, the Nasdaq finished Thursday's session by carving out an indecisive 'doji' on the candlestick chart. Now frequent readers know a doji is a session in which the opening and closing levels are very close to the same level -- in the present case 1553.0 and 1553.6 respectively. Now the doji is conventionally interpreted to represent hesitation or indecision. So the doji is useful to the extent it can serve as an early signal to a trend reversal. Yet the unfortunate aspect of this single candlestick pattern is 'hesitation' does not necessarily translate to reversal. The doji can serve as a reversal, or continuation, pattern.
Based on the current picture, it's difficult to become overly alarmed about the prospect of reversal. The index opened and finished in the upper half of its intraday range, and experienced no substantial intraday sell pressure. Nonetheless, the chart has signaled hesitation, which suggests market response to tomorrow's economic data will be worth keeping an eye on.
Speaking of which -- there are two economic reports set for release Friday morning. First out, is the Producer Price Index (PPI) which is scheduled for release at 8:30 ET. The PPI serves as a read on the price of wholesale goods -- i.e. the index measures inflation on the producer level. That report sets the stage for the more likely market mover in the preliminary June Michigan Sentiment number. Note the Michigan Sentiment Index is scheduled for release just after the market open at 9:45 ET -- the consensus estimate calls for a reading of 93.1.
On the corporate earnings front, the calendar is notably limited, with no reports scheduled that carry broader market implications. Note the initial response to Oracle's earnings report after the close has been slightly favorable, but relatively limited. For a more detailed look at upcoming reports, please visit Briefing.com's Earnings Calendar and Economic Calendar. -- Mike Ashbaugh -- Briefing.com
6:36PM Thursday After Hours price changes vs 4pm ET levels: Oracle (ORCL 13.49 +0.16) and PeopleSoft (PSFT 17.30 -0.07) have provided plenty of headline material for the better part of the past week. Tonight, the list of headlines has grown longer as ORCL reported its quarterly results while PSFT held a conference call to discuss why it rejected ORCL's takeover offer. Neither event unsettled the futures market as the S&P futures, at 999, are 2 points above fair value while the Nasdaq 100 futures, at 1237, are 5 points above fair value.
The positive bias in the futures market can be largely attributed to Oracle as the software provider posted better than expected results. Specifically, it reported fiscal Q4 (May) earnings of $0.16 per share, $0.02 better than the Reuters Research consensus of $0.14, on a 2.1% increase in revenues to $2.83 bln (consensus $2.74 bln). On its conference call, ORCL projected fiscal Q1 (Aug) EPS of $0.07-0.08 (consensus $0.08), total revenue up 4-7%, and new license revenue growth of 2-12%. The current Reuters Research consensus revenue estimate of $2.109 bln implies yr/yr growth of 4.0%.
Meanwhile, on PeopleSoft's conference call, it pretty much stuck to the script it provided in today's press release that detailed the Board's decision to reject Oracle's hostile offer to acquire PeopleSoft for $16 per share in cash. In the Q&A portion of the call, PSFT said a couple of interesting things, namely that the process of reviewing the Oracle offer is at an end and that it believes, in all likelihood, that IBM (00C 83.95), more so than SAP AG(SAP 31.85), was the real beneficiary of the uncertainty created by the events of the past week. As an aside, J.D. Edwards (JDEC) filed suit against Oracle in Colorado, and against Larry Ellison and Oracle VP Chuck Phillips, in California.
In other developments, Adobe Systems (ADBE 32.65 -3.33) reported Q2 (May) earnings of $0.28 per share, $0.02 better than the Reuters Research consensus of $0.26. However, it is on the defensive in extended action after providing disappointing guidance. For fiscal Q3 (Aug), ADBE is targeting revenues of $300-315 mln and GAAP and pro forma earnings target ranges of $0.22-0.25 per share. The current Reuters Research consensus estimates are $311.6 mln and $0.26, respectively.
Delphi (DPH 8.64 -0.95) is another after hours casualty as the auto parts company lowered its Q2 guidance to net income of $85-$95 mln (which includes a $25 mln after-tax charge), EPS of $0.15-$0.17, and revenues of $7.0-$7.1 bln -- down from previous guidance of net income of $160-$200 mln on $7.0-$7.3 bln in revs. DPH cited weakness in market demand and production volumes, as well as an adverse legal judgment and timing of portfolio-related actions such as facility closures and employee separations.
For added detail on these, and other developments, be sure to visit Briefing.com's In Play and Guidance pages.-- Patrick J. O'Hare, Briefing.com
6:14PM Oracle improving win rates (ORCL) 13.32 +0.05: -- Update -- Says win rates versus competition like SAP and PSFT have improved across-the-board in the applications business
5:57PM Oracle downplays PSFT's antitrust concerns (ORCL) 13.32 +0.05: -- Update -- On call, Ellison says he finds PSFT's antitrust concerns very curious, especially since PSFT's CEO, Craig Conway, approached Ellison last year with proposal to join the applications businesses of the two companies that Conway would then run... only difference this time around ORCL says is that Conway wouldn't be running the business
5:53PM Oracle says it believes JDEC is in worse shape than PSFT (ORCL) 13.32 +0.05: -- Update --
5:52PM Oracle takes a shot at PSFT (ORCL) 13.32 +0.05: -- Update -- On call, Ellison says things are getting worse at PSFT, not better, and that the ORCL win rate this quarter versus PSFT suggests as much... on the face of things, says PSFT's claim that it has unanimous support of customers is not true; ORCL points to the business it won from Merrill Lynch, which was a PSFT customer
5:47PM JD Edwards sues Oracle in two states (JDEC) 13.36 +0.02: -- Update -- Sues for $1.7 bln in Colorado state court against Oracle claiming ORCL has "tortiously interfered" with PSFT merger; suit also seeks unspecified amount in punitive damages. In California court, JDEC is suing Larry Ellison and ORCL VP Chuck Phillips for "wrongful conduct and unfair business practices", amount of California lawsuit not disclosed.
5:40PM Oracle gives fiscal Q1 guidance (ORCL) 13.32 +0.05: -- Update -- On call, says fiscal Q1 (Aug) EPS should be $0.07-0.08 (Reuters Research consensus is $0.08), and total revenue should be up 4-7% with new license revenue up 2-12%... current Reuters Research consenus revenue estimate of $2.109 bln implies yr/yr growth of 4.0%
3:31PM Oracle Earnings Preview (ORCL) 13.26 -0.02: The swashbuckling (in light of PSFT debacle) software giant Oracle reports its Q4 after the close with Reuters Research earnings estimates of $0.14 per share and revs of $2.74 bln. As we noted yesterday on in play, there has been positive chatter around the stock going into the qtr. First Albany is positive with respect to near term results and believes license revs will exceed the midpoint of guidance, which was described as abnormally conservative. However, the analyst believes its performance will be attributable to currency benefit and "low ball" guidance. Banc of America Securities is looking for key trends such as increasing interest in Linux, strength in federal and healthcare sectors, and better closure rates on applications deals when the co reports on its business developments to date.
4:21PM Adobe Systems beats by two cents; updates guidance (ADBE) 35.98 +0.16: Reports Q2 (May) earnings of $0.28 per share, $0.02 better than the Reuters Research consensus of $0.26; revenues rose 0.9% year/year to $320.1 mln vs the $312.2 mln consensus; co says it is targeting Q3 revenue at $300 to $315 million vs the Reuters Research consensus estimate of $311.6 mln.
4:20PM PeopleSoft keeping options open on JDEC (PSFT) 17.37 -0.25: -- Update -- In an answer to question about possibly speeding up JDEC acquisition, PSFT says it hasn't made any changes regarding the structure of the transaction, but it is keeping its options open... separately, analyst asks if it's accurate that PSFT wouldn't be interested in deal with ORCL at any price... response was that that is a speculative question and that the Board responded to the offer that was made
4:17PM Oracle beats by $0.02 (ORCL) 13.33 +0.06: Reports Q4 (May) earnings of $0.16 per share, $0.02 better than the Reuters Research consensus of $0.14; revenues rose 2.1% year/year to $2.83 bln vs the $2.74 bln consensus.
4:17PM Adobe Systems headline $0.28 vs $0.26 consensus (ADBE) 35.85 +0.03:
4:14PM PeopleSoft not saying anything new (PSFT) 17.37 -0.25: -- Update -- On call to discuss the decision to reject the ORCL offer, PSFT pretty much sticks to the script it wrote in today's press release in explaining why... Q&A session just starting
9:31AM SanDisk added to Analyst Select List at WR Hambrecht; target $50 (SNDK) 37.88 +0.50:
7:44AM Oracle outlook downgraded by Moody's (ORCL) 13.27: The Wall Street Journal reports Moody's Investor's Services Inc. downgraded its outlook on the co to "negative" due to additional cash it would need to complete its hostile bid for PSFT. The co's single A-3 rating was on its $300 mln in debt securities were reaffirmed despite the lowered outlook.
7:39AM Novellus cut to Reduce at UBS; target $28.50 (NVLS) 37.31: UBS Warburg downgrades to Reduce from Neutral based on valuation; relative to the S&P 500, the stock is trading at a relative P/E of 2.7x vs an avg of 2.2x for their coverage universe, yet since 1995 NVLS has traded at an avg relative P/E of 1.2x based on consensus estimates looking out 18 months; raises target to $28.50 from $25.
6:51AM STMicroelectronics and Taiwan Semi going into SOX, Lattice Semi being removed (STM) 22.78: The Philadelphia Stock Exchange announces that it will make the following changes to PHLX Semiconductor Index (SOX) before the open of business Monday, June 23: STMicroelectronics (STM) and Taiwan Semiconductor (TSM) will be added to the Index, while Lattice Semiconductor (LSCC) will be deleted.
finance.yahoo.com
Don, I really want to be long. I just can't justify the the valuations with so much bullishness present. BPNDX is now down two to 89 from its recent high of 91.
We have lost two of the best run semiconductor stocks around from the list of 100 on the NDX.
If MXIM and ALTR don't deserve buy signals then what stock will be next off that list?
RtS
RtS |
