Here’s What’s Weighing On Techs Today

October 17, 2003
Vincent Mao

Stocks are
lower this midday. The major indices are
modestly lower on this options expiration Friday. Positive economic news from
the still red-hot housing sector, as well as rising consumer sentiment, are
failing to inspire more buying in this overbought market. Housing starts rose by
the second-fastest rate since 1986 as the Commerce Department reported a 3.4%
jump in new home construction. Building permits slipped 2.2% but was still above
economists’ expectations.

Consider the following:

On Wednesday, Oct. 15, the
major indices made multi-month highs but subsequently reversed

Then yesterday, the broader
indices (S&P 500 and Nasdaq Composite) tried for a comeback and closed up
slightly

Today, the indices took out
both Wednesday’s and Thursday’s lows

Bonds are higher today despite
the positive economic news.

The day’s leading sectors are
Telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating), +0.06%.

In economic news, Housing
Starts in September came in at 1.888M vs. expectations of 1.827M. Building
Permits came in at 1.860M vs. 1.835M. The University of Michigan’s Consumer
Sentiment Index came for October came in at 89.4% vs. expectations of 88.2.

30-year Bonds are +155
at 110 020.

The dollar
is -0.15 at 92.75.

Gold is -2.00 at 371.20.

Crude Oil is -1.29 at
30.25.

Volume is 710,000,000 on
the NYSE, and 1,006,000,000 on the Nasdaq.

Market breadth is negative,
with NYSE declining issues over advancing issues by 1.91 and down over up
volume by 2.64; Nasdaq declining issues over advancing issues at 1.91, and down
volume over up volume at 3.62.

Top Dow stocks are:

Stocks in the news:

Broadband equipment maker
Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating) is trading lower by 6% after Smith Barney downgraded
the stock from “Hold” to “Buy”. The firm based the downgrade on high valuations
and believes that sales momentum will slow. Yesterday Broadcom reported that its
third-quarter net loss narrowed to 2 cents a share compared to 68 cents a share
in the year-ago quarter. Revenues rose 47% to $425.6 million.

RSA Security
(
RSAS |
Quote |
Chart |
News |
PowerRating)
is lower by more than 18% after the company provided fourth-quarter estimates
that were below expectations. The company did report a third-quarter profit of 6
cents a share compared to a loss of 14 cents a share in the year-ago quarter.
The results topped consensus estimates by a penny. Looking ahead, the company
sees Q4 revenues between $63 million to $67 million and earnings between 4 to 7
cents a share. Consensus estimates are calling for revenues of $66.9 million and
earnings of 7 cents a share. RSA CEO, Jeff Glidden, commented that “We still
don’t see large upticks. IT budgets are still constrained, and we do not see any
significant increases in IT spending.”

Internet auction site eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating) is trading lower by 5.5% after the company reported in line
third-quarter results but disappointed traders with its fourth-quarter outlook.
For its third quarter, earnings excluding item came in at 16 cents a share
compared to 11 cents a share in the year-ago quarter. Excluding items, the
company earned 18 cents a share. Revenues jumped 84% to a $530.9 million.
Looking ahead, the company sees fiscal 2004 results to be 98 cents a share,
compared to estimates of $1.05 a shae.