They Can’t Leave This Sector Alone
Like indecisive teenagers, analysts again agreed to
disagree about the outlook for the semiconductor industry in the latest in a
week-long expression of diverging opinions on the topic. Today, Credit Suisse
First Boston chimed in with its view that customers should stop purchasing
stocks of semiconductor equipment makers and makers of chips for communications
and electronics applications.
The downgrade follows proclamations by Merrill Lunch,
Salomon Smith Barney, Lehman Bros., and even the president of Intel who
collectively come out split on the intermediate-term fate of the industry.
Chip stocks are down for a third consecutive session, a
drag on the Nasdaq, but higher prices in the market’s biggest stock and an
encouraging economic report are resulting in a narrowly mixed market.
Anemic volume is adding to listless trading and mixed
returns in today’s major market averages. Volume on the Nasdaq was the lowest of
the year yesterday and is again light today.
The Nasdaq is down 5.50 at 2028.66, the S&P 500 is up
2.01 at 1202.49, and the Dow is up 31 at 10432.
CSFB’s downgrade of the most notable semi equips and their
stocks are suffering today with losses of 4.75% to 5.7%: Applied Materials
(
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is down 2.33 at 46.40, Novellus
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Tencor
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But gains in Microsoft
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for 10% of the weighting on the Nasdaq, is working to counterbalance losses in
chip stocks. Microsoft is up .35 on the session at 66.48.
Some investors are also encouraged by a favorable
productivity report, the best quarterly result in one year. Higher productivity
theoretically results in a better bottom line and higher earnings.
Keep an eye on TradingMarket’s Top
RS/Earnings New Highs List. From the list, Global Imaging Systems
(
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PowerRating) has
rallied more than 12% today after closing at a high yesterday on a surge in
volume. Also from the list, Sterling Bancshares
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PowerRating) is up over 3% and trading at an all-time high,
up .63 at 21.85.