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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (15097)	5/11/2004 9:35:46 AM
From: Return to Sender	Read Replies (1) \| Respond to of 95865

MORNING WATCH, May 11 By Frederic Ruffy, Optionetics.com 5/11/2004 6:00:00 AM optionetics.com Stocks are expected to bounce higher after suffering three consecutive days of losses. Since Wednesday, the Dow Jones Industrial Average ($INDU) has plummeted 320 points and dipped below the psychologically important 10,000 level. During that time, the Nasdaq Composite Index ($COMPQ) has fallen 60 points, or 3.1%. Stocks have been weak amid fears that higher interest rates are forthcoming. However, Tuesday morning, market focus appears to be shifting to the earnings front and, as a result, index futures were pointing to market strength before the start of trading. Cisco Systems (CSCO) is in the spotlight Tuesday. Shares of the networking equipment maker are expected to head higher before the release of its earnings report later today. After the close of trading Tuesday, Cisco Systems is expected to report earnings of 18 cents a share on sales of $5.55 billion, according to Thompson Financial. Abercrombie & Fitch (ABF) and Brocade Communications Systems (BRCD) also report earnings after the close of trading. May Department Stores (MAY) is set to release results before the opening bell today. In other stock news, Mylan Laboratories Inc. (MYL) is likely to trade actively after the company said profits in the latest period were little changed from year ago levels. According to the pharmaceutical company, increasing competition for its acne medicine offset gains from a legal settlement. Revenues missed analyst estimates and the stock is expected to trade modestly lower on the news. Meanwhile, Intel (INTC) may gain after the chipmaker said its inventories rose to its highest levels since 2001 amid signs of improving demand from electronics makers. Chip stocks may also get a lift from the latest report from the Semiconductor Industry Association [SIA]. The monthly report showed a 32% surge in worldwide semiconductor sales during the latest period. The economic calendar remains light. Weekly retail sales figures are released Tuesday morning, but are not expected to trigger any reaction in the financial markets. Later today, Federal Reserve Bank of Chicago President Michael Moskow may garner some attention when he speaks about the Fed’s economic outlook at 1:15 p.m. ET. Fed Reserve Bank President of Philadelphia Anthony Santomero delivers a speech 2:30 p.m. Some traders will be listening to the remarks from the Fed officials for any indications regarding the next move in interest rates. In the options market, it appears that the three-day sell off in the equity markets is taking a toll on investor sentiment. For instance, the CBOE Volatility Index ($VIX) surged 1.64 points yesterday and finished the day near 20. Meanwhile, put activity rose sharply. More than 2.9 million put options traded across the six US options exchanges, compared to 3.03 million calls. The volume represents the busiest day for put activity since March 2004 options expiration. In sum, the sharp rise in VIX along with the surge in put activity indicates that traders turned a good deal more bearish yesterday, and therefore the stock market might be oversold in the short-term. Frederic Ruffy Senior Writer Optionetics.com ~ Your Options Education Site