From Briefing.com: Overall the performance was mixed, the ranges for the major averages were relatively tight, the trading action was choppy and the volume was once again on the lighter side. No real surprise with any of this as we traverse through this pre-holiday week which is traditionally one of the slowest volume weeks of the year. Last Friday and thus far this week has also seen its fair share of volatility. But, given the thinner trading conditions this too should not be considered an unusual development.
This the type of market is more conducive to day trading but if you are able to hop on a stock/group with some momentum, impressive gains can be had. The semi sector fits the bill in that regard as it built on Tuesday's late push bringing the move in the SOX off yesterday's low to 5.8% (+2.9% today). Some of the impetus for the upside extension was related to what normally would be considered minor calls from the Street: HNG upgraded BRCM +2.8%, IRF +4.6%, MCHP +2.2%, RFMD +1.1%, SKYW +2%, TQNT +8.2%; Lehman upgraded NSM +5.7%; Bear Stearns upgraded FCS +13.4%. Sector strength was also seen in networking, disk drive and computer-hardware in the tech community along with modest gains in defense, retail and cyclical.
While trade was choppy, the Nasdaq Comp has generally followed the technical levels that we have presented (see chart below). Early action held at a minor congestion zone near 1763 with short term resistances at 1774/1776 and 1783 of interest from an intraday perspective. While the index is still 30 points away from the intraday high for the month, it did actually established a new 52-wk closing high (1782). A posture above initial support now at 1777/1774 (previous closing high, July intraday high, intraday congestion) leaves the door open for additional upticks. A secondary floor is in the 1768/1764 area (20/50 period averages). Next resistance is at 1795/1800 with the August intraday high at 1812.
Close Dow -6.66 at 9333.79, S&P +0.06 at 996.79, Nasdaq +11.49 at 1782.14: It was trader heaven today as volatility reigned supreme and the indices spent the bulk of the day chopping around... Despite the lack of an apparent trend, the major averages did exhibit a slight positive bias and as a result, the indices set their session lows at the onset of the session and closed the day near their session highs and in positive territory in the case of the Nasdaq and the S&P 500... To that end, breadth figures were mildly positive, although volume maintained its anemic levels ahead of the long Labor Day weekend...
The majority of the sectors spent the bigger part of the session in the green, with the leaders to the upside including the defense, networking, disk drive, semiconductor, and gold sectors... The strength of the latter coincided with a $7.30 uptick in the price of gold to $374.10/oz., its highest levels in more than six months... The resilience of the semiconductor group fed off of several upgrades in the sector, including that of National Semi (NSM 28.67 +1.50) to Equal Weight from Underweight at Lehman Brothers... Laggards of note included the oil services, transportation, housing, and banking sectors...
The housing and banking sectors have been particularly weak of late in the wake of the rising interest rates... To that end, the 10-year note closed the session down -11/32, with its yield at 4.52%...NYSE Adv/Dec 2013/1205, Nasdaq Adv/Dec 1926/1161
2:50PM Kaufman reits Buy on Covad Comms; target $8 (COVD) 3.69 +0.42: Kaufman reiterates their Buy rating and $8 target, as they believe the recent sell-off in COVD provides investors with an attractive entry point; firm says the co is building momentum, poised to turn EBITDA-positive in 4Q03 and free cash flow-positive in 2Q04, and its shares are trading at a discount to Internet infrastructure comps such as AKAM and EQIX on EV/sales (COVD at 1.5x vs 3-4x for the peer group); firm also raises net add estimate to 324,406 from 236,366, driven primarily by higher expectations for growth from consumer wholesale.
9:59AM INTC: Current risk/reward profile is not attractive -- Bernstein 27.54 -0.17:
9:56AM Bernstein reduces tech exposure : Yesterday after the close, Bernstein reduced their exposure to the Technology sector to Mkt-Weight, as their analysis suggests that Q3 bottoms-up consensus ests are aggressive on a historical basis, with the strengthening dollar reducing one of the key drivers of growth; firm concludes that current valuation levels are difficult to justify given the near-term risk to ests. Firm adds exposure to STM, ATML, and DBD, and reduces AGR.A, IBM, and HRS.
9:22AM Westell Tech selected by Cincinnati Bell as DSL modem supplier (WSTL) 7.36: Co selected by Cincinnati Bell (CBB) as the primary provider of DSL modems to its residential and small business customers in Ohio, Kentucky and Indiana.
9:17AM ATI Tech ramping orders at TSMC and UMC -- Digitimes (ATYT) 13.99: Digitimes reports ATI Technologies is expected to increase its orders to TSMC and UMC to approximately 100k wafers in Q3, which is up from 70k in Q2. The order growth is attributed to the co's emphasis on the middle range and low end markets. In addition, the co is expected to replace NVDA this quarter as TSMC's largest customer
8:27AM Fairchild Semi upgraded at Bear Stearns (FCS) 14.96: Bear Stearns upgrades to Outperform from Peer Perform, as they believe the co could begin to see shortages in power discrete components (primarily for power MOSFETs) in 2004, and that supply constraints could lead to firming prices and a period of strong earnings growth for the co. Target is $21. |
