Intel’s Earnings Were Good, But Here’s Why The Market Is Down
Stocks are
moderately lower this midday.
Stocks quickly reversed direction after a higher open, with cautious
comments from the tech sector weighing on the markets. Economic reports today
were a non-event as investors focused on comments from Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), Lucent
Technologies
(
LU |
Quote |
Chart |
News |
PowerRating), and Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating). The semiconductor giant reported
better-than-expected results late yesterday, but its CFO was still cautious
about a recovery in IT spending. Shares of Intel are up near 5% despite the
comments. Meanwhile Lucent’s plan to return to profitability this year was
thrown out the window and Motorola warned of a wider-than-expected third-quarter
loss. Fed chairman Greenspan continued his testimony before the Senate Banking
Committee today. Greenspan commented that the Fed would consider buying Treasury
notes in order to combat deflation. After yesterday’s plunge, bonds are
continuing to sell off today.
The Dow Jones Industrial
Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) is -0.69% at 9,066.65. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
is -0.89% at 991.50. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is -0.69% at 1740.99.
The day’s leading sectors are
Airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating), +1.55%, Transports
(
$TRANX.X |
Quote |
Chart |
News |
PowerRating),
+0.37%, Homebuilders
(
$HGX.X |
Quote |
Chart |
News |
PowerRating), +0.16%, and Retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating),
+0.04%.
Weak today are Networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), -3.11%, Healthcare
(
$HMO.X |
Quote |
Chart |
News |
PowerRating), -2.98%,
Internet
(
$GIN.X |
Quote |
Chart |
News |
PowerRating), -2.29%, Internet Commerce
(
$ECM.X |
Quote |
Chart |
News |
PowerRating),
-2.22%, and Telecoms
(
$XTC.X |
Quote |
Chart |
News |
PowerRating), -1.92%.
In economic news, Business
Inventories in May fell 0.2% compared to an expected flat reading. CPI in
June rose by an expected 0.2%. The Core CPI for June came in flat
compared to a 0.1% rise. Capacity Utilization in June came in as expected
at 74.3% and Industrial Production rose by an expected 0.1%.
The 10-year U.S. Note
is -140 at 114 185.
The dollar is -0.30 at
96.92.
Gold is +1.80 at 344.20.
Crude Oil -0.67 at
30.95.
Volume is 809,000,000 on
the NYSE, and at 1,001,000,000 on the Nasdaq.
Market breadth is negative
on the NYSE and Nasdaq, with NYSE declining issues over advancing issues by
a ratio of 2.33, and down volume over up volume by a 3 ratio. Nasdaq declining
issues over advancing issues is 1.90, and down volume over up volume is 1.76.
Top Dow stock(s) are:
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), +4.68% at 25.23,
Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), +0.63% at 33.38, American Express
(
AXP |
Quote |
Chart |
News |
PowerRating),
+0.59% at 45.41, Microsoftl
(
MSFT |
Quote |
Chart |
News |
PowerRating), +0.44% at 27.39, and Hewlett
Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating), +0.17% at 22.94.
Stocks in the news:
General DynamicsÂ
(
GD |
Quote |
Chart |
News |
PowerRating)
is higher by 2.7% after the company reported second-quarter results that topped
analysts’ estimates. The company reported earnings of $1.22 a share compared to
estimates of $1.17. However the results were still down from the year-ago period
of $1.29 a share.Â
Harley Davidson
(
HDI |
Quote |
Chart |
News |
PowerRating)
is higher by 4.7% after the motorcycle manufacturer reported second-quarter
results that topped estimates. The company reported earnings of 66 cents a share
compared to estimates of 58 cents a share. For the same quarter a year ago,
Harley had earned 47 cents a share. Harley did caution that gross margins for
the second half of the year could come under pressure due to costs of its new
plant in Pennsylvania.Â
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) is
higher by 3.5% after the chip giant reported second-quarter results that beat
expectations. The company reported earnings of 14 cents a share or double from
same quarter from last year. Intel also beat estimates by a penny. Going
forward, the company set a third-quarter revenue target of $6.9 to $7.5 billion.
However, Intel CFO commented that they are not seeing any signs of a economic
recovery, a big upgrade cycle, or rising IT budgets.Â
Sears
(
S |
Quote |
Chart |
News |
PowerRating) is trading
higher by 9.7% after the Dow component announced that it was selling its credit
and financial services operations to Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) for approximately $6
billion in cash.Â
Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) is
lower by 3% after the company announced that CEO Sandy Weill will be stepping
down. However Mr. Weill will remain as chairman of the board until 2006. He will
be replaced by Charles Prince.Â
Lucent Technologies
(
LU |
Quote |
Chart |
News |
PowerRating)
is lower by 12.5% on heavy volume after the company warned that it will not
return to profitability until 2004 due to weakness in the wireless market. The
company also warned of a wider-than-expected third-quarter loss of 5 to 8 cents
a share compared to estimates of a 5 cents a share loss.Â
Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating) is
lower by 5% after the company reported a recently lowered loss of 5 cents a
share compared to a loss of $1.02 a share a year ago. The company also warned
that it doesn’t see much of an improvement for the second half of the year and
added that third-quarter results would fall short of expectations.Â
If you have any comments or
questions, please feel free to email me.