From Briefing.com: The technology sector showed its resilience again as it bounced back from some early profit taking on Tuesday and finished the session at yet another 52-wk high. The inclination to take some money off the table in the early-going was a reflex reaction to the sizeable gains on Monday and, in turn, was a natural response to some weaker than expected economic data that included the ISM Services Index for December (58.6 vs consensus of 60.8) and the Factory Orders report for November (-1.4% vs consensus of -1.5%).
For all intents and purposes, though, the data merely served as a convenient excuse to do some selling as there was nothing alarming, nor too terribly surprising, in the reports themselves. To that end, a level of 58.6 is still a strong reading for the ISM Services series and the Factory Orders data, which is comprised of the already released durables data, along with nondurables data, was essentially dated information that doesn't typically have much market impact.
Fittingly, the negative reaction to the data was short-lived and the tech sector soon mounted a rebound try that gained some momentum when Nasdaq Composite found support in the 2042/2040 area. In Briefing.com's Technical Take column, which is available to Platinum subscribers, it was noted that if support held in that area during early session downticks, the index would be positioned for an upside extension. That is, in fact, what played out as the Nasdaq trended higher for the remainder of the day, paced by leadership in the technology arena that was spearheaded by the software, semiconductor, telecom and telecom equipment stocks.
The spread between advancing issues and declining issues at both the NYSE (1724 vs 1579) and the Nasdaq (1808 vs 1409) wasn't nearly as wide as what was seen on Monday, but there was notable interest in Nasdaq-listed issues as volume topped 2.2 bln shares for the second day in a row.
Electronics Boutique (ELBO 27.17, +10.9%), which narrowed its Q4 guidance, was a winning standout in the tech sector along with Nortel Networks (NT 4.76, +3.03%), which was upgraded to Outperform from Neutral at Soundview. Gateway (GTW 4.34, -12.85%), meanwhile, was down on its luck after cautioning investors that it expects to report a Q4 operating loss at the low end of its previous guidance range. Early indications suggest JDA Software (JDAS 14.43, -3.54, -19.7%) will fill the role of tech sector pariah on Wednesday as its stock is down nearly 20% in extended action following a warning from the company that Q4 sales and earnings results are expected to fall short of current consensus estimates since it failed to close a number of deals that it had expected to by the end of the quarter.-- Patrick J. O'Hare, Briefing.com
6:19PM Tuesday After Hours prices levels vs. 4 pm ET: A flat after hours market that has mimicked today's lackluster regular session - at 1122 and 1504, the S&P futures and Nasdaq 100 futures (respectively) are unchanged with fair value. Corporate news has been fairly heavy in comparison to recent nights, and has been accented by several earnings preannouncements. With the market about to enter the heart of earnings season next week, 'warnings season' has kicked into high gear.
The following is a list of companies making headlines tonight, and the reasons behind the stock's resulting move:
After Hours Mover % Change Move Reason for Move
Advent Software (ADVS) +11% Enterprise software maker raises its Q4 (Dec) revenue guidance above that of the Reuters Research consensus estimate; Management noted, though, that 'GAAP profitability is still a few quarters away'
Constellation Brands (STZ) unch Brewer tops the Street's EPS and revenue estimates in its Q3 (Nov) report and issues in-line earnings guidance for Q4 (Feb) and FY04; Expect the rest of the group (BUD, RKY) to move higher tomorrow after being weak today
Guitar Center (00C0) +13% Specialty retailer increases its top and bottom-line forecasts for Q4 (Dec) after first warning for the quarter in late October; Look for GTRC shares to recover some of their year-end losses tomorrow
JDA Software (JDAS) -20% Software solutions provider warns for Q4 (Dec) citing 'a number of deals that did not close;' JDAS competes with ITWO and MANU in its space
Trimeris (TRMS) -1% Anti-viral biotech company denies Wall Street's accusations of trying to bury the failure of its new HIV drug (partnered with Roche) in a press release late Monday; Leerink Swann analyst Ron Ellis explains 'that's terrible because there's nothing remaining in Trimeris's pipeline now'
Tomorrow, the market will have little in the way of corporate or economic news to take its cue from. There are no real companies of significance on Briefing.com's Earnings Calendar, and no economic reports on the Economic Calendar.
For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. -- Heather Smith, Briefing.com
5:53PM PXLW: After hours strength in stock being attributed to presentation at Needham Growth Conference :
4:10PM MKS Instruments announces public offering of common stock (MKSI) 29.86 -0.07: -- Update -- Co announces plans to publicly offer 2.0 mln shares of common stock, in conjunction with 5.0 mln shares of common stock being offered by certain stockholders of the Co, pursuant to an effective registration statement previously filed with the SEC.
4:01PM MKS Instruments raises Q4 guidance, increase Q1 rev guidance (MKSI) 29.86 -0.07: Co raises its Q4 (Dec) revenue guidance to $97-99 mln (previous range $85-89 mln), Reuters Research estimate is $90 mln and raises EPS guidance to $0.06-0.08, ex items (previous range breakeven to $0.03), R.R. consensus is $0.03. Also increase Q1 (Mar) revenue guidance to $108-112 mln, R.R. consensus is $98 mln.
4:07PM GSI Lumonics gets major order for Laser trim systems (GSLI) 12.74 +0.13: Company announces receipt for multipleWaferTrim M310 systems from US-based integrated circuit manufacturer for a total value of approx $6 mln. The systems will be delivered in Q1 of 2004.
2:57PM Powerwave probes gap bottom resistance from Sep at 8.50 (PWAV) 8.37 +0.49: -- Technical -- Pushes as high as 8.47 this afternoon leaving it just shy of resistance at the bottom of the Sep gap at 8.50.
10:51AM Nasdaq Composite bounces off initial support (COMPX) 2048 +1.10: -- Technical -- The index edged slightly lower off the open but held near initial support in the 2042/2040 area (see The Technical Take) and rebounded. The next resistances of interest are at 2052 (weekly barriers) and 2059/2065 (post 9/11 closing high, Dec 2001 high).
10:49AM RMBS target raised to $47 at AmTech 31.12 -0.02: American Technology Research reiterates their Buy rating and raises their target to $47 from $35; firm believes that, bureaucratic delays notwithstanding, Rambus (RMBS) will prevail this year on both the "rule of law" front against Infineon and against the standards-setting bodies at the FTC; if this happens, firm says this should set-up their "realistic case" earnings scenarios for CY05 of $1.42, and for CY06 of $1.70. (Firm thinks the Infineon decision should come shortly after Jan 7, and expects an initial decision on the FTC case by Feb 17.)
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