Here’s What’s Weighing on Tech

September 30, 2003
Vincent Mao

Stocks are
lower this midday. The major indices
are lower today as worse-than-expected economic data and Sun Microsystems’
warning of a wider-than-expected loss wiped out gains from yesterday’s bounce.
Selling in stocks accelerated after consumer confidence in September fell to a
six-month low. The decline in consumer confidence could be attributed to the
slow recovery in the job market. Eric Wiegand of CSFB commented that “The
jobless nature of the recovery thus far doesn’t leave consumers or investors
with a sense of feeling very secure or confident in the sustainability of the
recovery.”

Later this week, we have the ever-important non-farm payrolls
and unemployment numbers. A report on manufacturing activity in the Mid-West
declined more than expected. Network computer maker Sun Microsystems’
(
SUNW |
Quote |
Chart |
News |
PowerRating)
warning is weighing heavily on tech stocks. Late yesterday, the company revised
its earlier reported fourth quarter profit of $12 million to a loss of $1.04
billion or 32 cents a share. Sun now also sees a first-quarter loss of 7 to 10
cents a show compared to compared to estimates of a loss of 2 cents a share.
Bonds are up more than 2 full points and are at a two-month high.

In economic news, Chicago
PMI in September came in at a reading of 51.2 vs. expectations of 57.0. Consumer
Confidence in September came in at 76.8 vs. expectations of 80.5.

The 10-year U.S. Note
is +200 at 114 040.

The dollar is -0.34 at
93.10.

Gold is +4.30 at 387.70.

Crude Oil is +0.85
at 29.25.

Volume is 781,000,000
on the NYSE, and 1,000,000,000 on the Nasdaq.

Market breadth is mixed,
with NYSE advancing issues over declining issues by 1.06 and down over up
volume by 1.60; Nasdaq declining issues over advancing issues at 1.23, and down volume
over up volume at 3.18.

Top Dow stocks are:

Stocks in the news:

Transportation equipment
supplier Arvinmeritor
(
ARM |
Quote |
Chart |
News |
PowerRating) is lower by 13% after the company guided
first-quarter and full-year 20004 earnings below consensus estimates. Due to
higher-than-expected costs for new product launches, the company now sees first-quarter 2004 results of 25 to 30 cents a share compared to current estimates of
58 cents a share. Full-year 2004 results are now projected at $2.20 to $$2.40 a
share, or below consensus estimates of $2.67 a share.

Diversified media company Emmis
Communications
(
EMMS |
Quote |
Chart |
News |
PowerRating) is
higher by 3% after the company announced second-quarter results that topped
expectations. Due to strong performances in both radio and TV segments, the
broadcaster reported earnings of 14 cents a share compared to a loss of 13 cent
s share in the year-ago quarter.

Harris Corp.
(
HRS |
Quote |
Chart |
News |
PowerRating) is
higher by 4.5% after the company said that first-quarter results would come in above
current consensus estimates. Due to cost cuts across the board, the
communications equipment maker now sees first-quarter result of 37 to 38 cents a
share. Current estimates are calling for 32 cents a share. Revenues for the
quarter are estimated between $540 million to $550 million or above estimates of
$517.4 million.

Software maker Network
Associates
(
NET |
Quote |
Chart |
News |
PowerRating) is now fractionally higher after the company agreed to
settle a class action lawsuit. The network security software maker agreed to pay
$70 million in a suit which alleged that the company misled investors by
improperly recognizing revenues.

Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating)
is lower by 15% after the network computer maker warned of a wider-than-expected
first quarter loss. Due to a slow return to profitability, the company will now
take a $1.05 billion charge to write down tax credits. The charge will also mean
that Sun lost 32 cents a share last quarter.

If you have any comments or questions, please
feel free to email me.

Vincent Mao

vincentm@tradingmarkets.com

Here’s What’s Weighing on Tech

BUY THE FEAR, SELL THE GREED

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