Hi All,
Very interesting view about INTC and other high-tech stocks...that I found under this link: cbs.marketwatch.com
today that I would like to share..
A agree with this analysis of a this buying opportunity..in fact, had brought already. But that is my opinion only and it is basically up to the individual themselves to determine that.
BTW, this is Kevin's view and not mines...
Willie
-----------------------------------------------------------
Blue-Chips remain in throes of Asian flu; techs notch win
By Kevin N. Marder, CBS MarketWatch
Fri Dec 19 18:31:16 1997
NEW YORK (CBS.MW) -- U.S. stocks, hounded by
the latest round of turmoil in Asian markets, lost
ground for the eighth time in the last 10 sessions
Friday.
But the market staged an impressive intraday reversal
from its late-morning lows to close well off its
intraday trough, led by the embattled technology
sector, a conspicuous laggard for the past four
months. Of note was the swift rebound in the
semiconductor group, a segment severely hit in recent
months due to slowing demand from Asia.
Trading activity was exceptionally heavy due to
triple-witching, the quarterly expiration of stock
options, stock index options, and stock index futures
contracts.
The Dow Jones Industrial Average retreated 90.21
points, or 1.1 percent, to 7756.29. The index was
down as much as 273.06 points at 11:11 a.m. ET. On
the week, the Dow fell 82 points, or 1.0 percent.
Since jumping 1194.97 points, or 17.1 percent, from
Oct. 28 to Dec. 5, the Dow has given back 410
points, or 5.0 percent, as renewed fears of slowing
corporate profits growth have dominated the market's
mindset. Triggering the recent downdraft was Dec. 8's
disappointing earnings report from technology
bellwether Oracle.
This was followed by profits warnings from
Microsoft, Excel Communications, Tenneco, Federal
Express, FMC, JP Morgan, Applied Magnetics,
Electronics For Imaging, Minnesota Mining &
Manufacturing, disk-drive manufacturers Quantum
and Seagate Technology, and semiconductor concerns
Kulicke & Soffa, Cypress Semiconductor, and Lattice
Semiconductor, among others. Nearly all pointed to
anemic Asian economic conditions as the primary
cause of their anticipated shortfalls.
"I think most of the damage has already been done
and you're being handed a God-given opportunity to
buy the Intels, the Microsofts, the Applied Materials,
the Sun Micros, and the other great technology
companies," said Frank Cappiello, president of
McCullough Andrews & Cappiello, and chairman of
the Cappiello mutual fund family. "Every once in a
while, you're given that opportunity. This is one of
them.
"The U.S. continues to be an excellent place to invest,
and we're going to be hurt the least of any country in
the world from the Asian fallout," said Cappiello.
"There's good news from the Asian situation in that it
slows the economy so that the Fed doesn't raise
interest rates. We think earnings will be adversely
affected by an average of 5 percent. Some industries
might be impacted by 5 percent to 10 percent.
"Even with moderately lower corporate earnings, we
could see higher stock prices in the months ahead due
to lower interest rates."
"We can get a little rally in January, but I don't think
it's going to be broad-based, and it sure won't be
enough to carry the Dow to 10,000," said Ralph
Acampora, head of technical research at Prudential
Securities. "I think investors should be prudent and if
there are some things that don't look good [in one's
portfolio], lighten up. You don't have to panic, but if
there's something you don't like, [sell it]. Certain
stocks are already in a bear market. If the decline
continues to broaden out, you'll look back a year
from now and say this is the first bear market in four
years."
In Asia, Tokyo's Nikkei 225 index tumbled 5.2
percent after food wholesaler Toshoku Ltd. closed its
doors, the ninth big Japanese firm to shut down this
year.
And South Korea's Seoul Composite index plunged
5.1 percent on worries about Kim Dae-Jung's
election victory and the closure of Shinsegi
Investment and Trust, a financial concern.
Elsewhere in Asia, Hong Kong's Hang Seng index
lost 3.2 percent.
In the bond market, the yield on the 30-year Treasury
issue tumbled to 5.912 percent from Thursday's
5.940 percent, as investors rushed to the perceived
safety of fixed-income securities. At one point, the
key yield stood as low as 5.862 percent as it flirts
with its Oct. 15, 1993 trough of 5.78 percent.
The Standard & Poor's 500 Index fell 0.9 percent, the
New York Stock Exchange Composite sank 0.9
percent, and the American Stock Exchange
Composite lost 0.6 percent.
New York Stock Exchange losers enjoyed a 2-to-1
lead over winners. New 52-week highs totaled 123,
with new 52-week lows amounting to 156.
On the Big Board floor, turnover swelled 27 percent
to 788 million shares.
The Nasdaq Composite advanced 0.1 percent.
Declining issues topped advancers by almost 3 to 2 in
the Nasdaq Stock Market. New highs totaled 61,
while new lows came to 220. Volume totaled 793
million shares.
In earnings news, Nike rose 1/8 to 40 1/8 after
reporting fiscal second-quarter profits of 48 cents a
share, 7 cents below most forecasts. The firm said
results over the next year will be adversely impacted
by Asian economic weakness.
3Com sank 1/2 to 32 5/8 despite matching most
projections with its fiscal second-quarter earnings of
4 cents a share.
Food processor ConAgra equalled Wall Street
estimates with its fiscal second-quarter earnings of
46 cents a share. The shares fell 2 1/4 to 35 3/8.
In special situations, casino operator Showboat
rocketed 8 7/16 to 29 9/16 after agreeing to be
acquired by rival Harrah's Entertainment for $519
million, or $30.75 a share, plus $635 million in debt.
Morgan Stanley Dean Witter upped its rating of
Mattel to "strong buy" from "outperform." But the
stock dipped 1 1/4 to 37 3/8.
Briggs & Stratton shed 3 1/8 to 49 1/8. The engine
manufacturer said fiscal second-quarter results will
be lower than the year-ago period due to the strong
U.S. dollar and a shift in its product mix to
lower-margin items.
Genentech inched ahead 1/8 to 58 7/8. The Food and
Drug Administration approved the company's
Nutropin drug for use by patients with adult growth
hormone deficiency.
FirstPlus Financial bolted 4 1/2 to 33 5/8. The
consumer finance specialist said it expects 1998
per-share earnings to be between $2.50 and $3.00,
and 1999 net to come in between $4.50 and $5.00.
Within the technology sector, top-tier
computer-related shares traded evenly mixed. In a
switch from past sessions, bellwether names
outperformed blue-chip indexes as some issues
became oversold on a technical basis. International
Business Machines rose 2 1/8 to 102 1/8, Motorola 2
3/8 to 58 1/4, Ascend Communications 3 1/16 to 27
5/16, Netscape Communications 1 1/4 to 27 3/4,
Intel 7/8 to 70, Gateway 2000 2 7/8 to 33, and
Applied Materials 1 7/8 to 30.
On the negative side, Microsoft fell 2 1/8 to 128 3/4,
Dell Computer 2 3/8 to 78 3/8, Cisco Systems 1/8 to
53 1/2, and Hewlett-Packard 1/2 to 61 3/8.
The semiconductor group vaulted higher, as many
issues had become oversold on a short-term basis
after plunging 40 percent to as much as 70 percent
over the past few months. Among semiconductor
equipment manufacturers, KLA-Tencor rebounded
3 5/8 to 37 7/8, Novellus Systems 2 1/8 to 33 1/4,
Dupont Photomasks 2 1/4 to 34, Credence Systems 2
11/16 to 25 1/16, ASM Lithography Holding 2 5/8 to
64, Uniphase 2 1/8 to 38 3/4, Silicon Valley Group 2
1/16 to 21, and Teradyne 7/8 to 31 7/16.
Meanwhile, the semiconductor manufacturing
segment appreciated 1.4 percent, with Linear
Technology gaining 4 7/8 to 57 5/8, Maxim
Integrated Products 5 3/8 to 65 3/8, Micrel 4 3/8 to
27 3/8, Lattice Semiconductor 4 to 52 5/8, SGS
Thomson Microelectronics 5 to 58 3/4, Micron
Technology 3 3/16 to 27 3/16, Triquint
Semiconductor 2 3/8 to 21, and Vitesse
Semiconductor 3 3/4 to 39 1/4.
A few of the market's leading stocks became the first
to poke into positive territory late in the morning
session. Showing excellent tone for the entire day was
Yahoo!, up 3 3/4 to 61 7/8. The shares have
stubbornly refused to join most others in the market's
downdraft of late, rocketing 81 percent from their
Oct. 28 intraday low of 34 1/8.
Other Internet content-service providers, hot in
recent weeks due to their torrid growth rates and slim
exposure to overseas economies, advanced. Excite
tacked on 1 15/32 to 24 31/32, Lycos 1 7/8 to 36
3/4, and CMG Information Services 1/2 to 27 1/4.
Elsewhere among the market's leaders, Quadramed
rose 2 3/4 to 23 3/8, Compuware 1 1/4 to 32 1/2,
Abercrombie & Fitch 1 3/16 to 28 11/16, Legato
Systems 2 1/2 to 38 5/8, Tekelec 3 3/4 to 33 1/4, and
Veritas Software 2 1/8 to 47 1/4. |
