From Briefing.com: 4:46PM Weekly Wrap: It was a bit of a roller coaster week for the market and, for that matter, all Americans as the two-year anniversary of the Sept. 11 attacks tapped a range of emotions. Through it all, though, the market showed some characteristic resolve and ended the week little changed.
On Monday, it looked as if the market was poised for another big week as the major indices started on a decidedly upbeat note with the Dow, Nasdaq, and S&P closing Monday's session with gains of 83, 30, and 10 points, respectively. Favorable commentary from analysts on various technology stocks acted as the spark for the buying interest. By Tuesday, however, valuation concerns were in play and they would remain so through the end of the week.
Selling activity predominated on Tuesday and Wednesday with the technology shares bearing the brunt of the bearish blow. In that two-day span, the Nasdaq dropped approximately 65 points, or 3.4%, while the S&P dropped 2.0% and the Dow fell 1.7%. Aside from the normal valuation concerns, other items that received some blame for the fallout included a violation of some near-term support levels, the airing of what was alleged to be a new videotape of Osama bin Laden, and an awareness that stocks were failing to move higher on what would generally be considered reassuring commentary from analysts and the companies themselves.
Specifically, Texas Instruments (TXN) and Xilinx (XLNX) both provided mid-quarter updates Tuesday night in which each company essentially reiterated its prior guidance. To be sure, neither company lowered expectations, and yet, both stocks fell on the news as investors sensed the good news had already been accounted for in their stock prices.
On Thursday, the market bounced back, underpinned by a spirit of recovery that accented the memorial services across the land for the victims of the 9/11 tragedy. Technology shares spearheaded the rebound, but that was nothing new as they have maintained a leadership position since last October. For a time on Friday, it looked as if they might surrender that post as a disappointing fiscal Q1 (Aug) report from Oracle (ORCL) created some questions as to whether the sector has gotten ahead of itself.
On Friday, the market was also focussed on a batch of disappointing economic data, particularly the August Retail Sales report, which registered a gain of 0.6% versus a consensus expectation for an increase of 1.5%. Excluding autos, retail sales were up 0.7% (consensus +0.8%). The disappointment, frankly, was in the fact that the report came in below expectations, but a 0.6% gain is a very healthy gain for a single month and supports the argument that the economy is in a significant upturn.
Eventually, participants took solace in the latter consideration and used it, along with a welcome drop in interest rates, as a springboard for an afternoon rally that enabled the indices to end the week on a positive note. By and large, participation in this week's action was limited as volume figures at the NYSE and Nasdaq failed to impress. That can be attributed to some underlying anxiety as to the near-term sustainability of the recent updraft. Briefing.com, for its part, remains guarded about the market's near-term prospects and would urge readers to either take some profits or pursue ways to protect them. Our long-term outlook for stocks, however, remains moderately bullish.-- Patrick J. O'Hare, Briefing.com
YTD chart of major stock indexes
Index Started Week Ended Week Change % Change YTD
DJIA 9503.34 9471.55 -31.79 -0.3 % 13.5 %
Nasdaq 1858.24 1855.03 -3.21 -0.2 % 38.9 %
S&P 500 1021.39 1018.63 -2.76 -0.3 % 15.9 %
Russell 2000 508.87 509.06 0.19 0 % 32.9 %
Close Dow +11.79 at 1855.04, S&P +2.21 at 1018.63, Nasdaq +8.95 at 9471.55: What looked like a relatively dreary picture through the morning ended up turning into a successful session for the bulls as the major averages, which had spent the entirety of the session underwater, staged a nice recovery in the afternoon and closed in positive territory... But, first things first...
The market used this morning's economic data, including the lower-than-expected Retail Sales report (at 0.6% versus consensus of 1.5%; ex-auto at 0.7% versus consensus of 0.8%) and the preliminary September Michigan Sentiment report (at 88.2 versus consensus of 90.4), as an excuse to take some money off the table... As a result, the vast majority of the sectors spent the morning in the red... The Nasdaq was underperforming its blue-chip counterparts on a relative basis due to the weakness in technology sectors, which were taking their cue from the disappointing earnings report from Oracle (ORCL 12.45 -0.53), which checked in with in-line earnings of $0.08 per share, but with lighter-than-expected revenues of $2.07 bln that were accented by a disappointing decline in new license software sales...
Nonetheless, the market soon realized that ORCL's issues were largely company-specific and that the market's reaction to the economic data had been overdone... After all, a monthly increase in retail sales of 0.6% is still a healthy one... Also, the correlation between sentiment and spending is relatively weak and the data clearly show that spending continues at a healthy pace...
The realization that the consumer remains strong, combined with today's decline in interest rates to their lowest level since the end of July, sparked an afternoon recovery in the equity market, which was spearheaded by the interest-rate-sensitive groups such as the banking, brokerage, and housing sectors... As a matter of fact, the only groups to close in the red were the software, disk drive, internet, defense, and gold sectors, with the latter being the only laggard showing losses surpassing 1%... The bond market closed the session with gains across the yield curve and the 10-year note up +16/32, bringing its yield down to 4.25%... As an aside, volume was relative light, with 1.2 bln and 1.7 bln shares traded on the NYSE and the Nasdaq, respectively...NYSE Adv/Dec 1923/1295, Nasdaq Adv/Dec 1763/1383
2:21PM New High Profile -- MIPS Techs (MIPS) 4.48 +0.34: Making a new 52-week high today on 2x avg volume is MIPS Technologies, which provides processor architectures and cores for digital applications, and licenses its intellectual property to semi co's, ASIC developers, and system OEMs. Co's restructuring plans are on track to be completed by the end of Sept and the co recently reiterated guidance for breakeven by DecQ... Co has $83.8 mln in cash, or about $2.10 per share, with virtually no debt... Stock appears to be benefitting from a bit of a short squeeze, as 20% of the float is being shorted.
1:17PM Rudolph Tech: KLAC tool could be negative catalyst for stock - Prudential (RTEC) 21.88 -0.33: Prudential maintains their Underweight rating and $10 target on RTEC after rival KLAC officially announced its MetriX 100 metrology tool; the new KLAC tool includes the ability to measure both metal film thickness as well as film composition, which firm believes is a key advantage for the KLAC tool over RTEC's metal metrology tool.
9:14AM Lattice Semi estimates cut following mid-qtr call (LSCC) 9.09: SG Cowen reduces its Q3 revenue estimate to $50.8 mln from $54 mln following mgmt's guidance last night on mid-qtr call. According to firm, mgmt cut revenue guidance from a range of $52-$55 mln to a range of $51-$53 mln.
9:13AM UBS on the likely winners/losers for the GIG-BE contract : UBS believes that the likely winners of the govt GIG-BE contract are CIEN for long-haul optical and optical switching (valued at $150+ mln), CSCO for MSPP ($50-$75 mln), JNPR for core and edge IP routers ($70 mln), and SCMR for optical cross-connect ($50-$75 mln); firm views their new handicapping of the GIG-BE RFP as a positive for CIEN and JNPR, as they are likely to win higher dollar amounts than originally thought, positive for SCMR, neutral for CSCO, and negative for LU and CORV.
9:01AM Asyst upgraded at Adams Harkness (ASYT) 14.17: Adams Harkness upgrades to Buy from Mkt Perform and raises their target to $20 from $12; firm believes that ASYT is close to landing a large AMHS order at LG-Philips worth about $35 mln, continues to believe that Asyst-Shinko will dominate the next batch of 300mm semi AMHS design decisions with likely wins at Toshiba and SMIC, and believe that ASYT has made progress with AU Optronics and NEC-SVA for future LCD fabs.
Actel (ACTL) 26.90 -0.34: Banc of America downgraded ACTL to Neutral from Buy based on valuation as the stock has exceeded their $24 price target.
Advanced Micro Devices (AMD) 12.16 +0.33: Friedman Billings Ramsey upgraded AMD to Outperform from Market Perform and raised its price target to $16. Based on recent channel checks, firm believes that AMD is seeing Q3 sales running ahead of expectations due to both higher units and higher blended average selling price on its Athlon XP products.
finance.yahoo.com
Don, thanks for the updated tables!
RtS |
