11:31 ET Semi Equip group leads rally with 6.6% advance
Trading desks attributing impressive advance in group to Goldman Sachs comments on group outperforming over next two weeks (see 08:23 comment). Providing leadership within the Semi Equip space today are TER +7.7%, BRKS +7.3%, AMAT +7%, NVLS +7%, CMOS +5%.
08:58 ET COHR Coherent guides Q3 below consensus (23.99)
Company now expects Q3 revenues of approx $98-101 mln, vs Reuters Research consensus of $104.3 mln, due to ongoing weakness in demand from COHR subsidiary Lambda Physik AG's industrial customers in Asia and continued weakness in Lambda Physik's lithography biz.
08:27 ET BMC BMC Software lowers Q1 guidance (16.47)
Company now sees Q1 EPS of $0.01-0.04, vs Reuters Research consensus of $0.08 and previously estimated range of $0.05-0.10; sees revenue of $305-312 mln, vs estimate of $330.6 mln and prior rev guidance of $320-335 mln. Co cites shortfall to "unanticipated delays in customer purchasing decisions."
08:23 ET Semi Equips seen outperforming over next two weeks
Goldman Sachs believes that Semiconductor Equipment stocks could outperform over the next two weeks as the market anticipates/reacts to what firm expect to be an upbeat Semicon West trade show that begins July 14th.
08:16 ET Fulcrum downgrades oil services stocks
Fulcrum downgrades oil service stocks HAL, BJS, CAM, SII, UCO, VRC, WFT, DO, NE, RDC, and RIG to Sell from Neutral, citing the following factors: 1) rapidly increasing US gas inventories will likely result in adequate storage levels, 2) sluggish oil demand growth likely to lead to lower oil prices, 3) 2H03 earnings outlook is becoming increasingly tenuous, 4) institutional investors are likely to be net sellers of oil services stocks in Q3, and 5) oil services valuations are likely to trend lower.
07:57 ET FILE FileNET lowers Q2 guidance (17.01)
Company now sees Q2 GAAP EPS of $0.01-0.03, vs Reuters Research consensus of $0.05 and prior guidance of $0.04-0.06, and revenue of $85 mln vs estimate of $90.6 mln and previously guided revs of $90 mln. Co attributes shortfall in EPS and revs to delays or deferrals of several large transactions.
12:51 ET Dow range bound but slipping -- Technical --
Although the Dow has underperformed today it continues to cling to solid gains. Top performers include: INTC +4.6%, AXP +3.3%, HPQ +3.5%, MSFT +3.6%, HON +2.9%. The only component in the red today is Coca Cola (KO -1.4%). This issue was able to bounce near its June 11 low but has slipped back toward this floor (45.59/45.55) in recent trade. Supports for the Dow are at 9214/9210, 9200 and 9175. Resistances for the Dow, if a move beyond the morning high (9261) is seen are at 9275 and the 9295/9305 area.
12:45 ET SCHS is a 'short squeeze waiting to happen' -- ThinkEquity (28.23 -0.02)
12:30 ET TSM Taiwan Semi reit Buy at Prudential (10.98 +0.15)
Prudential reiterates their Buy rating and $13 target on TSM based on their belief that continued positive business momentum and increasing wafer starts could bode well for TSM shares; in addition, with modest continued improvement in wafer starts, co could see Sept qtr utilization rate close to 90%, which would have positive implications on gross margins.
12:24 ET PIXR Pixar Animation breaks out to new 52-wk high (62.59 +1.10)
Stock is managing to clear its previous one yr high of $62.24 established June 6.
12:18 ET Sector Watch: Broker/dealer
A top performing group today with an early upgrade (see 07:18 MWD comment) and the strong overall market performance helping to underpin. The top performers in the sector include: ET +4.9%, SCH +4.5%, JEF +4.3%, LEH +3.5%, GS +3.1%, AMTD +2.9%, MWD +2.8%, MER +2.7%. From a chart perspective the XBD index (554.74 +3.3%) is back testing an important resistance zone between 555.68 and 557.26 which marks the Jan 2002 and June highs. Tradable ETFs include: Financial SPDRs (XLF +1.9%), Financial Services (IYF +1.6%).
12:14 ET FRNT Frontier Airlines guides above consensus (10.25 +0.45)
Co says that as a result of increased demand, they now estimate that Q1 EPS will fall between $0.00-$0.05 (excluding govt aid received during the qtr as a result of the Emergency Wartime Supplemental Appropriations Act and unusual and non-recurring items); consensus is for a loss of $0.14.
11:58 ET URBN Urban Outfitters target raised to $44 from $37 at Sanders Morris (38.08 +1.13)
11:41 ET FPIC FPIC Insurance -- Small-Cap Profile (14.83 +0.87)
FPIC Insurance Group is one of the names showing up on our low-PEG screen this morning, and is trading just below its recent 52-week high of $14.94. The co is a provider of professional liability insurance for physicians, dentists, and other healthcare providers, primarily in Florida and Missouri, and also provides management services and third-party administration services. Analysts expect the co to grow 2003 EPS by 10% to $1.40 (P/E 10.6x) and to grow 2004 EPS by 24% to $1.73 (P/E 8.6x). Mkt cap: $140 mln, float: 8.6 mln shares, avg daily volume: 105k shares, price/book: 0.77 (MRQ), short interest: 37%.
11:31 ET Semi Equip group leads rally with 6.6% advance
Trading desks attributing impressive advance in group to Goldman Sachs comments on group outperforming over next two weeks (see 08:23 comment). Providing leadership within the Semi Equip space today are TER +7.7%, BRKS +7.3%, AMAT +7%, NVLS +7%, CMOS +5%.
11:30 ET Bond Market Update
Treasuries are inching toward new lows on no real news. The ten-year note presently is down 17/32nd's to yield 3.71%. As we mentioned earlier, this market will need a reason to reverse its bearish persuasion. With nothing on the economic calendar today (and with a light week ahead of us overall), this downward drift could predominate for a while.
11:23 ET CERN on the mend; watch for potential short-squeeze (20.22 -0.18)
See 09:53 for related comment.
11:13 ET DELL Dell Computer tests 52-wk high (32.98 +0.98) -- Technical --
Resistance at 33.00 was tested this morning with DELL currently back for another try after a minor pullback. This level marks the June/52-wk high and also matches up well with the Nov 2000 high of 33.06.
11:03 ET SFNT Volume Alert -- SafeNet experiences aggressive slide intraday (30.45 -0.59)
Over a 40 minute period, stock tumbled from $31.50 to the $31.00 level.
11:00 ET IACI -- Goldman believes stock offers 20% upside (41.40 +1.81)
10:53 ET CCMP Short-Squeeze Alert -- Cabot Micro (54.40 +2.21)
Stock has made a very aggressive move to its highs of the day. Intraday price action suggests that shorts are covering positions in this extremely volatile name. As of last reporting date, short-interest in this name stood at approx. 25% of the float.
10:50 ET Relative Weakness: MRVL turns defensive after early test of 52-wk high (37.63 +0.13)
10:42 ET MBT weakness follows report that new CFO named (60.50 -1.00)
10:40 ET S&P 500 pauses near short term resistance -- Technical --
The index has pushed aggressively higher this morning but has halted for the time being at resistance in the 1004.70 area. Intraday congestion in the 1001/1000 area provides initial support with a chart/retrace barrier near 998/997. It will take a slide back through last week's high (995) to inflict significant chart damage. Next resistances are near 1007 and 1010.
10:37 ET Relative Weakness: MERQ turns defensive intraday (41.48 +0.14)
10:25 ET AAPL Apple Computer moves to new 52-wk high (19.85 +0.72)
Stock is clearing its $19.69 one-year high established June 23.
10:21 ET SNPS Synopsys eyeing resistance at June highs (63.94 +1.26) -- Technical --
Stock has pushed firmly higher this morning and is vacillating near resistance at the June 25 high (63.97). The June/52-wk high is just slightly above at 64.13.
10:16 ET LGND Ligand Pharma: IMS data increases confidence in qtr -- First Albany (14.83 +1.05)
First Albany reiterates its Buy rating on stock due to IMS prescription data for Avinza that suggest that Ligand is on track to meet or beat expectations in Q2.
10:08 ET GSOF Group 1 Software vacillating near support at June low of 16.80 (16.78 -0.64) -- Technical --
10:08 ET Relative Weakness: ADBE slips after failing to clear 50-day (34.25 +0.36)
10:04 ET Relative Weakness: DCTM trades to lows of session as broad mkt hits highs (15.68 -0.02)
10:01 ET Hearing that WEN cut to Mkt Perform from Outperform at Piper (29.38 -0.11)
09:56 ET DRIV Digital River lifts to new 52-wk high, keeps shorts on the defensive (22.04 +0.73)
09:56 ET Nasdaq Composite at new 52-wk high -- Technical --
The index broke above its month long trade range top (1684/1686) in early trade and is currently hovering near resistance at 1696 (see Technical Take). The next resistances of interest are at 1710/1713 and 1720 (62% of Jan/Oct 2002 tumble).
09:53 ET CERN -- Hearing that press release alleviates some earnings fears (19.57 -0.83)
Stock has come under heavy sell pressure in recent trade amid concerns about bookings (which were highlighted by Briefing on Wednesday). This morning, issue off another 4% following a Deutsche downgrade on checks that suggest mgmt's Q2 bookings target of $175-$180 mln is at risk (see 07:54 comment). However, hearing that press release issued this morning by CERN announcing a Q2 earnings date of July 16 is helping to alleviate some concerns about the qtr.
09:48 ET MU Micron: Needham increasingly bullish on DRAM (13.27 +0.58)
Needham says they are becoming increasingly bullish on the outlook for DRAMs, citing the recent trend of firming mkt prices driven by the emergence of the new, high-speed 400MHz DDR interface offering. Firm notes that MU's earnings are highly leveraged to DRAM mkt prices, and believes this trend will continue given: supplier financial pressure, continuing migration to faster devices, and DRAM prices on a per megabit basis that will take nearly 2 years at current levels to return to the very long term trend line.
09:46 ET Sector Watch
Impressive start to the day with the Nasdaq Comp moving to its highest level since May 2002. Pacing the way higher are semi (SOX +3%), biotech (BTK +2.2%), networking (NWX +2.7%), computer-hardware (HWI +2.1%), Internet (DOT +2%), airline (XAL +2.3%), broker/dealer (XBD +2.3%). Early weakness noted in oil service (OSX -1.2%) and gold (XAU -1.7%).
09:44 ET OVTI OmniVision flirts with $37.48 one-yr high (37.40 +1.32)
Stock edging lower after initial test of the $37.48 one-yr high set June 6 (session high $37.50).
09:41 ET AMGN Amgen tangles with $67.54 one-yr high set June 17 (67.55 +1.17)
Notable that stock unable to build ground following the initial test of the high, which will be viewed as a very short-term negative from a technical perspective.
09:37 ET SHFL -- hearing that accounting research firm out with negative comments on stock (30.15 +0.18)
09:37 ET MU gap up attributed to positive Needham note; firm has $20 target (13.35 +0.54)
09:34 ET AVP Avon Products target raised to $72 from $65 at Prudential (63.30 +0.38)
Prudential thinks Avon will continue to be one of the best performing stocks in firm's universe based on its potential for acceleration in unit growth (10%-plus from 9% over the past 5 years) and EPS growth (13-14% from 11% in 2003E).
09:32 ET JKHY Jack Henry downgraded at Putnam Lovell (17.38 -0.23)
Putnam Lovell downgrades to Sector Perform from Outperform based on valuation; firm raises target to $18 from $16 to reflect their increased confidence in the operating environment for financial institution services co's as a whole.
09:32 ET SUPG SuperGen receives notice of allowance for cancer treatment patent (5.30 +0.18)
09:31 ET HYDL Hydril Corp target cut to $22 from $30 at CSFB (27.00 +0.62)
09:11 ET S&P futures vs fair value: +8.0. Nasdaq futures vs fair value: +15.0.
Strength in futures trade persists, and as a result, the cash market should rally at the open.
09:10 ET Gapping Up/Down
Pre-market movers of note include MSFT +3% (FT.com affiliate paper reports that company is considering special dividend)... ATYT +8% (positive Barron's mention)... IIJI +15%; Foreign Internet space has been hot, also watch CHINA, REDF, EWEB, PCNTF, IGLD.... FCSE +31% (raises guidance)... ARIA +11% (positive cancer study)... SGP -7% (cautious guidance)... OVER +8% (MSN agreement)... CLGY -37% (negative FDA ruling)... FILE -12% (lowers guidance).
09:02 ET UTSI UTStarcom wins DSLAM contract from China Telecom (36.66)
Co awarded contract with China Telecom to deploy more than 200,000 lines of its AN-2000 IB solution in eight provinces throughout China. This marks the third and largest IP-DSLAM contract announcement with China Telecom to date.
08:59 ET WEN Wendy's revises Q2 & Y03 guidance based on new tax rate (29.49)
As result of increase in its effective corporate tax rate (from 36% to 39.25%), WEN expects additional tax expense of approx $3.2 mln (or $0.03 per share) for Q2. Co now sees Q2 EPS of 0.53, vs Reuters Research consensus of $0.56, and Y03 EPS of $1.97-2.03, vs estimate of $2.02 and prior guidance of $2.02-2.08.
08:58 ET COHR Coherent guides Q3 below consensus (23.99)
Company now expects Q3 revenues of approx $98-101 mln, vs Reuters Research consensus of $104.3 mln, due to ongoing weakness in demand from COHR subsidiary Lambda Physik AG's industrial customers in Asia and continued weakness in Lambda Physik's lithography biz.
08:54 ET S&P futures vs fair value: +7.3. Nasdaq futures vs fair value: +14.0.
Futures indications retain the bulk of their gains and continue to point to a noticeably higher start for the indices... Impressive gains in Europe (France's CAC +2.3%) and Asia (Japan's Nikkei +2.6%), along with the dollar's climb to its highest level in two months versus the euro, have set the stage for an advance at the open.
08:51 ET KR Kroger Co upgraded at Bernstein (16.88)
Bernstein upgrades to Outperform from Mkt Perform and raises their target to $21.50 from $17.25; upgrade is based on the following factors: firm's new value-driven dominance analysis suggests that KR is substantially better positioned than competitors, better use of customer data to drive sales and lower supply chain costs, and their belief that price investments and operational restructuring that used to plague KR's performance are starting to pay off.
08:50 ET STJ St. Jude Medical cut to Outperform from Strong Buy at SG Cowen (56.50)
While firm expects a strong 2004, believes the ICD market is likely to slow to 15-17% and CRT devices should gain more share. SG Cowen also doesn't see material upside relative to consensus.
08:46 ET CMOS Credence denies reports of NPTest negotiations (8.81)
Co denies published reports that it is negotiating with Schlumberger (SLB),Francisco Partners and Shah Management to acquire NPTest. Credence also stated that it has no intention to enter into negotiations to acquire NPTest or its assets.
08:44 ET BZH Beazer Homes reports 12% prelim increase in JunQ home orders (83.45)
08:42 ET Hearing that OPWV upped to Outperform at Raymond James; target $3
08:40 ET UNFI Utd Nat Foods guides for Y04 (28.12)
Company issues preannouncement for FY04 (Jul), sees EPS of $1.44-1.48, excluding $0.02 impact of compliance with Section 404 of the Sarbanes-Oxley Act, Reuters Research consensus is $1.46, UNFI sees revenues of $1.55-1.57 bln vs Reuters consensus of $1.59 bln.
08:38 ET TALK Talk America guides Q2 higher (10.59)
Company expects to exceed previous guidance, now sees Q2 EPS of $0.19-0.27, vs Reuters Research estimate of $0.23, and revenue of $88-91 mln vs estimate of $89.7 mln. Co also announces it expects to meet or exceed prior guidance for remainder of the year.
08:29 ET OVER Overture Svcs extends pact with MSN (19.25)
Co announces an extended and expanded international search distribution relationship with Microsoft Corp. Overture has extended its existing paid placement search agreement to provide search results to users of MSN Search, which is accessible through Microsoft's Internet Explorer browser software, in the United Kingdom, Germany, France, Japan and South Korea through December 2004. The original agreement was set to expire in December 2003 and is separate from the company's existing distribution agreements covering the international MSN Web sites, which also run through December 2004.
08:29 ET S&P futures vs fair value: +7.0. Nasdaq futures vs fair value: +12.5.
Cash market looks poised to recoup a portion of last Thursday's losses at the open as traders have been encouraged by the hefty gains in overseas trading, and reports that MSFT may be considering paying shareholders a special dividend.
08:27 ET Prudential starts Cymer and ASM with Hold ratings
Prudential initiates coverage of CYMI (target $36) and ASML (target $9) with Hold ratings, saying the lithography sector could underperform in the near-term due to significant reuse of the installed base of 248nm scanners until there is capacity expansion by new fab projects.
08:27 ET CACH Cache, Inc. beats by $0.05 (17.86)
Company reports Q2 (June) earnings of $0.37 per share, $0.05 better than the Reuters Research estimate of $0.32; revenues rose 9.1% year/year to $55.96 mln vs the $56 mln estimate.
08:27 ET BMC BMC Software lowers Q1 guidance (16.47)
Company now sees Q1 EPS of $0.01-0.04, vs Reuters Research consensus of $0.08 and previously estimated range of $0.05-0.10; sees revenue of $305-312 mln, vs estimate of $330.6 mln and prior rev guidance of $320-335 mln. Co cites shortfall to "unanticipated delays in customer purchasing decisions."
08:23 ET Semi Equips seen outperforming over next two weeks
Goldman Sachs believes that Semiconductor Equipment stocks could outperform over the next two weeks as the market anticipates/reacts to what firm expect to be an upbeat Semicon West trade show that begins July 14th.
08:16 ET Fulcrum downgrades oil services stocks
Fulcrum downgrades oil service stocks HAL, BJS, CAM, SII, UCO, VRC, WFT, DO, NE, RDC, and RIG to Sell from Neutral, citing the following factors: 1) rapidly increasing US gas inventories will likely result in adequate storage levels, 2) sluggish oil demand growth likely to lead to lower oil prices, 3) 2H03 earnings outlook is becoming increasingly tenuous, 4) institutional investors are likely to be net sellers of oil services stocks in Q3, and 5) oil services valuations are likely to trend lower.
08:11 ET MRX Medicis upgraded at Wachovia (55.93)
Wachovia upgrades to Outperform from Mkt Perform based on improving Loprox and Dynacin Rx trends, their belief that FY04 earnings guidance understates "intrinsic" earnings power, and the prospect of near-term Restylane approval. Sees valuation range at $65-$67.
08:07 ET Pre-Market Movers
Gapping Up: FCSE +51.5%, LOUD +20%, IIJI +15.8%, ATYT +9.5%, SINA +7%, XMSR +3.5%, CHINA +3.5%, SEBL +2.9%, MSFT +2.8%, CSCO +2%, SIRI +2%.. Gapping Down: WGRD -10%, RBAK -8%, CRUS -7.8%, FILE -6.5%.
08:05 ET CMCSA Liberty Media puchases QVC from Comcast (30.92)
Liberty Media has agreed to purchase Comcast's 57% stake in QVC for $7.9 bln. QVC contributed more than a third of Comcast's revenues of $12.46 bln for the year. The purchase will be paid in cash, Liberty Media stock and other debt with the actual amounts to be determined over the next several weeks.
08:04 ET S&P futures vs fair value: +8.4. Nasdaq futures vs fair value: +14.5.
Cash market set to rally at the open as dollar firming against the euro, sizable gains on the European bourses, and renewed buying interest on the heels of last session's sell-off have contributed to the bullish tone of the futures trade.
08:03 ET APA Apache is top pick in group at UBS (64.75)
UBS Warburg says that APA continues to be their top pick in the E&P sector for the following reasons: 1) healthy balance sheet and free cash flow generation enable the co to further pursue M&A opportunities, 2) its moderate risk int'l exploration plays in Egypt and Australia should generate attractive growth, and 3) its superior full cycle returns and track record of value creation. In addition, firm says the co has been one of the few independents to masterfully manage the commodity cycle over the last several years. Target is $81.
08:00 ET Watch for possible negative reaction in OTEX on FileNET warning
07:57 ET FILE FileNET lowers Q2 guidance (17.01)
Company now sees Q2 GAAP EPS of $0.01-0.03, vs Reuters Research consensus of $0.05 and prior guidance of $0.04-0.06, and revenue of $85 mln vs estimate of $90.6 mln and previously guided revs of $90 mln. Co attributes shortfall in EPS and revs to delays or deferrals of several large transactions.
07:54 ET CERN Cerner cut to Sell at Deutsche; target $15 (20.40)
Deutsche Securities downgrades to Sell from Hold based on checks that suggests mgmt's Q2 bookings target of $175-$180 mln is at risk, which would likely translate into a rev and earnings miss; cuts target to $15 from $25.
07:52 ET BEBE bebe stores upgraded at First Albany (20.91)
First Albany upgrades to Buy from Neutral, saying recent store checks leads them to believe that both merchandise assortment and product flow have continued to improve, and therefore firm expects the co to beat guidance of flat comps for fiscal Q4; in addition, firm believes that production issues, which resulted in lack of sufficient inventory, are largely resolved. Target is $25.
07:49 ET AXP American Express could be poised for upside in suit -- WSJ (42.27)
The Wall Street Journal's "Heard on the Street" column discusses the co possibly being the beneficiary of litigation, which was brought against Visa USA Inc. and Mastercard International Inc. by the Justice Dept. The suit alleges the two associations wrongly restricted their member banks from entering into agreements with Amex and other card brands. The case received a ruling in the Justice Dept's favor in Oct. 2001 with the case on appeal and a decision expected within a year. If the judges decide to uphold the original decision, Amex will be open to court a myriad of banks, which could potentially ramp up volume and transaction fees. Sanford Bernstein's analyst believes the co winning the right to market "bank-Amex" cards could mean considerable growth of 15% in per share earnings by 2005. In addition, the analyst estimates do not include the possibility of a possible settlement if the ruling is in the co's favor.
07:49 ET ARIA Ariad Pharma preclinical study for blood cancer shows potency and activity (4.06)
Co announces, for the first time, results of pre-clinical studies demonstrating the potency and activity of AP23464, its product candidate to treat life-threatening forms of blood cancer. Separately, co issued a press release late Thursday announcing a shelf registration covering 7.5 mln shares.
07:38 ET PDII Prof Detailing comments on Fortigel non approvable letter (11.46)
Co states that the not approved letter for Fortigel has no impact on its previously stated 2003 earnings per share guidance of $0.48 to $0.53 (Reuters Research consensus $0.46). On Jan 2, PDI announced it had entered into an exclusive license agreement with Cellegy to commercialize Fortigel in N. American markets.
07:36 ET SGP Schering-Plough reduces Q2 outlook, announces organizational changes (19.06)
Company now sees Q2 EPS of $0.12 vs Reuters Research consensus of $0.19 based on "continuing competitive pressures on its major product franchises." Co also announces new organizational structure for its Global Pharmaceutical Business (GPB) designed to consolidate SGP's prescription pharma biz units into single, globally integrated operation
07:26 ET CRUS Cirrus Logic appoints new CFO, sees Q1 revs at low end (4.62)
Co announces resignation of Steven D. Overly, Chief Financial Officer and General Counselfor, for personal reasons, and appoints W. Kirk Patterson as acting CFO. Co also says it expects Q1 revs to come in at the low end of previous revenue guidance.
07:09 ET ATYT ATI mentioned favorably in Barron's article (10.40)
Barron's article discusses the market for graphics chips, which is currently dominated by ATYT and NVDA. Despite ATYT moving firmly ahead of NVDA, an analyst in the article points to the trading disparity between the two companies with NVDA trading at 55 times forward 2004 earnings of 43 cents a share and ATYT trading at 13 times the analyst expectations of 80 cents a share for FY04 ending in August. Despite concerns over the introduction of the more inexpensive integrated graphics chipset vs its "discrete" graphics chips, the analyst believes the co ATI can make a profit of $10 on a $30 chipset. In addition, the analyst also believes ATYT has surpassed NVDA for MSFT's choice for its graphics in the XBox2. |
