From Briefing.com: 8:48AM Economic Review - GDP, ECI, claims : Q2 GDP rose a stronger than expected 2.4% as final sales rose 3.2%. The chain weight deflator fell to +1.0%. The Q2 employment cost index rose 0.9% as benefit costs again topped the rise in wages and salaries. Jul 26 initial claims for unemployment benefits fell for a third consecutive week to a 388K level -- all bond bearish/stock bullish and suggestive of a strengthening economy. Bonds got hammered after the releases - ten-year note now down half a point (to yield 4.38%), after having been up more than half a point before the data came out.
8:45AM Pre-Market Movers : Gapping Up: KOSP +35%, IMGN +29%, DFIB +23%, ATAR +16%, TERN +12%, VLGC +10.8%, SFNT +10%, OXGN +9.9%, GSIC +8.5%, $CRAY +5.3%, PCLE +3.5%, EMC +3.5%, EXTR +3.4%, RFMD +2%, CORV +2%, AMAT +1.4%... Gapping Down: FLEX -4.5%, UNH -2.3%.
8:44AM August Tech upgraded at Needham (AUGT) 9.15: Needham upgrades to Strong Buy from Buy and raises their target to $15 from $12 following stronger than expected Q2 results; firm believes the co's new products allow it to expand its addressable mkt for inspecting wafers in the front end, the STI acquisition has broadened its capability in probe mark inspection, the Counterpoint acquisition deepens its position in defect analysis and characterization, and the co's 3Di and NSX products should grow as the industry adopts bumped wafer technology more widely.
8:26AM Power-One beats by $0.05; guides for Q3 (PWER) 8.72: Reports Q2 (Jun) loss of $0.01 per share, $0.05 better than the Reuters Research consensus of ($0.06); revenues rose 23.4% year/year to $69.3 mln vs the $58.4 mln consensus. Co sees Q3 EPS of a loss of $0.04-0.06, R.R. consensus is a loss of $0.04 and revenues in the range of $65 mln "plus or minus 5%", R.R. consensus is $59 mln.
8:26AM Terayon Comm upgraded at Needham (TERN) 4.08: Needham upgrades to Strong Buy from Buy and raises their target to $7 from $4; firm believes that TERN has a shot at CMTS mkt leadership within the next 12 months or so, driven by a globalizing DSL/cable bandwidth blowout that has already started in Korea and Japan; firm also still believes Comcast could decide a major CMTS bid around Aug 15.
8:20AM Mercury Computer beats by $0.02; guides for Q1 & Y04 (MRCY) 20.76: Reports Q4 (Jun) earnings of $0.20 per share, $0.02 better than the Reuters Research consensus of $0.18; revenues rose 3.5% year/year to $44.5 mln vs the $44.7 mln consensus. Co. sees Q1 EPS of $0.13-0.17, R.R. consensus $0.20 and revenues in the range of $39-42 mln, consensus is $46 mln. Also sees Y03 EPS of $0.85-0.95, R.R. consensus is $0.80 and revenues of $180-190 mln, estimate $188 mln.
7:41AM GlobeSpan Virata started with a Buy at Adams Harkness (GSPN) 6.61: Adams Harkness initiates coverage of GSPN with a Buy rating and $9-$10 target range; firm says the DSL mkt remains a bright spot in the telecom mkt, and they do not feel that the discount is warranted; the DSL mkt is again exhibiting strong growth dynamics, driven by healthy demand in Asia and Europe, and regulatory relief in the U.S. mkt for broadband services should be a major catalyst for increased carrier spending.
7:24AM Broadcom downgraded at Wachovia (BRCM) 20.71: Wachovia downgrades to Mkt Perform from Outperform; while the co's core biz continues to achieve solid growth, checks indicate BRCM should experience considerable weakness in its server rev in 2H04; also, while firm remains impressed with BRCM's emerging products, this segment's growth may not be sufficient to make up their previous server rev contribution; sees valuation range of $19-$24.
7:24AM Immunogen and Aventis enter anticancer drug development pact (IMGN) 3.74: Co and Aventis sign a collaboration agreement to discover, develop, and commercialize novel antibody-based anticancer products. Aventis will acquire the worldwide commercialization rights to the new product candidates created by the collaboration as well as worldwide commercialization rights to three early-stage product candidates in ImmunoGen's research pipeline. ImmunoGen will receive an upfront payment of $12 mln and more than $50 mln in committed research funding over a three-year period. Additionally, for each product candidate, ImmunoGen can receive milestone payments of between $20 mln and $30 mln based on development and regulatory achievements as well as royalties on commercial sales.
7:20AM Merrill Lynch upgrades select semi names : Merrill Lynch upgrades ISIL, LLTC, MXIM, MCHP, NSM, and SMTC to Buy from Neutral; firm believes that unlike mid 2002, earnings ests are reasonable or even conservative; and with earnings ests unlikely to fall, rev growth momentum improving into Q4, and the supply chain showing very low inventory levels, firm believes that the stage is set for growth in earnings into 2004 aided by an inventory snap back as lead times lengthen.
7:10AM JP Morgan upgrades EMC, downgrades NTAP : JP Morgan upgrades EMC to Overweight from Neutral based on their increasingly positive outlook for the co approaching Q4; firm believes that Q4 will favor companies with high-end enterprise exposure, customers will spend the majority of their hardware budgets on projects with high ROI such as SANs, and EMC's restructuring actions and recent product launches have positioned it well for improved storage spending levels. Firm also downgrades NTAP to Neutral from Overweight, citing valuation, a lack of near-term catalysts, and their belief that further operational improvements (particularly in margins) will be difficult in the near-term.
7:03AM Early Research Calls : JP Morgan upgrading EMC to Overweight from Neutral; also downgrading NTAP to Neutral from Overweight; also cutting BYD to Underweight fro Neutral... Wachovia downgrading BRCM to Mkt Perform from Outperform; also cutting HC to Mkt Perform... Merrill Lynch's Joe Osha raising Semi names ISIL, LLTC, MXIM, MCHP, NSM and SMTC to Buy... UBS upgrading CAM to Buy from Neutral... Smith Barney upgrading PTEN, NBR to In-Line from Underperform... BofA initiating coverage on MOGN with Buy rating and $48 tgt... Lehman downgrading SRT to Equal Weight from Overweight... Morgan Stanley maintaining Overweight rating and $28 price tgt on INTC after a one-on-one interview with CEO Craig Barrett.
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