When They Can’t Agree…This Happens
Last week they rolled
out Merrill Lynch and even Intel’s President in an attempt to
manufacture a semiconductor-led rally in stocks. Today, brokerage house
touts are coming out on the other side of the chip performance continuum,
either downgrading Intel or predicting lower prices for Intel’s
semiconductors. The disagreement is spurring a sell off in semiconductors
and a broad market decline.
The Nasdaq is down 26.51 at 2038.82, the S&P 500
is down 11.66 at 1202.69, and the Dow is down 87 at 10425.
A Salomon Smith Barney analyst downgraded Intel,
lowering earnings estimates for next quarter from 11 cents to eight
cents.
Throwing a wrench into last week’s semis-promotional
engine, Lehman Brothers said it expects Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) to slash prices on
Pentium 4 chips by as much as 50% by the end of this month. The doubt and
uncertainty is sending the chip giant for a 4% loss, leaving a failed breakout
pattern at a triple top.
Investors are also reticent to put new money at risk
ahead of earnings results from a key networking stock. Cisco
(
CSSCO |
Quote |
Chart |
News |
PowerRating) is
down 2.25% to 19.60 ahead of its earnings announcement, scheduled for
release after the market closes tomorrow.
On the upside,
Engineered Support Systems
(
EASI |
Quote |
Chart |
News |
PowerRating) is trading in a Kevin Haggerty Slim Jim pattern. EASI’s
three-month RS is 93 from TM’s Stock
Scanner and the stock is up 3.61 at 45.95, trading at a new all-time
record.
Sept. crude oil
(
CLU1 |
Quote |
Chart |
News |
PowerRating), a Momentum
market, rallied early to come within 15 cents of a six-week high, but
stalled at Friday’s high. As crude oil
(
CLU1 |
Quote |
Chart |
News |
PowerRating) rallied to nearly match Friday’s high, oil
service stocks
(
OSX |
Quote |
Chart |
News |
PowerRating) traded on their highs. Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating), Smith International
(
SII |
Quote |
Chart |
News |
PowerRating), and Cooper Cameroon
(
CAM |
Quote |
Chart |
News |
PowerRating) were the leaders during this impulse and
could be giving an early hint that they will move higher if oil prices break
above current resistance.
In the sectors, gold and silver
(
XAU |
Quote |
Chart |
News |
PowerRating) and
airlines
(
XAL |
Quote |
Chart |
News |
PowerRating) are the leaders — but by less than 1% each. Utilities
(
UTY |
Quote |
Chart |
News |
PowerRating)
-2.99%, computer technology
(
XCI |
Quote |
Chart |
News |
PowerRating) -2.07%, and semiconductors
(
SOX |
Quote |
Chart |
News |
PowerRating)
-2.06% are lagging sectors.