This Sector Is Poised For Additional Upside…
U.S. stocks are falling for the first time in
four days on concern last week’s rally drove semiconductor shares too high amid
the economic slump. General Electric
(
GE |
Quote |
Chart |
News |
PowerRating) and Coca-Cola
(
KO |
Quote |
Chart |
News |
PowerRating)
are leading the decline on the S&P 500 index after analysts downgraded
their shares.
Chipmakers including Texas Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating), Xilinx
(
XLNX |
Quote |
Chart |
News |
PowerRating) and Altera
(
ALTR |
Quote |
Chart |
News |
PowerRating)
have been falling after the Philadelphia Semiconductor Index
(
$SOX |
Quote |
Chart |
News |
PowerRating) leaped
almost 10%.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is lower today
at 2048.75, down 10.63. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating) is down 3.99 at
1168.52, and the Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) is lower by
25.56 to 10234.62.
Optimism that interest-rate cuts will revive
profit growth this year had sent the S&P 500 up 21% since Sept. 21 and the
Nasdaq up 45%. Yet some investors and analysts say earnings may not recover as
swiftly as expected.
The Nasdaq Composite
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
index started the week out higher on moderately bullish market internals. Look
for intraday resistance in the area of 2081 which represents today’s intraday
high and also approximates the upper end of its 10-day Bollinger bands. To the
downside, look for initial support at 2062/2065, followed by subsequent support
at 2050.Â
Sector Watch: The Oil Services Index
(
$OSX |
Quote |
Chart |
News |
PowerRating) appears to be set up well for additional upside from present
levels. Currently trading towards its best level of the session at 85.66, look
for initial resistance at an area of congestion around 86.00 followed up by
subsequent overhead at 88.0. To the downside, look for intraday support at 84.00
followed by subsequent support around 83.50.
Merrill Lynch analyst Steve Fortuna does not
think the Compaq
(
CPQ |
Quote |
Chart |
News |
PowerRating) news changes the company’s story;Â he
views the positive guidance as a consumer-driven one-time
event. He believes this offers potential for DellÂ
(
DELL |
Quote |
Chart |
News |
PowerRating)
to show better top-line, and perhaps a penny upside. Mr. Fortuna also
thinks Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating) has a better chance of showing a profit in
Q4.
The Clorox
(
CLX |
Quote |
Chart |
News |
PowerRating) CEO reiterated the
company is on track to deliver FY02 earnings of $1.82-$1.87 before special
charges, despite the recent devaluation of the Argentine peso; consensus
estimate for 2002 is $1.84.
Handspring
(
HAND |
Quote |
Chart |
News |
PowerRating)
is seeing bids this morning, helped by positive pre-open comments from Bear
Stearns which said that HAND could exceed Q2 revenue and EPS estimates and that
holiday sales accelerated; Bear Stearns maintains a Neutral rating and price
target of $3.00-$4.50 on the stock.
Merrill Lynch upgraded Circuit City
(
CC |
Quote |
Chart |
News |
PowerRating)
to Long-term BUY from Neutral; raised FY02 to $0.94 from $0.82 and FY03 to $1.42
from $1.00; and said CC doesn’t appear to be losing as much market share to Best
Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) as the firm thought.
Shares of Network Appliance
(
NTAP |
Quote |
Chart |
News |
PowerRating)
are falling lower on a rumor the company will have difficulty making its
quarter. Another rumor in the market is that Broadcom is close
to receiving an order from Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating).
Click Here for today’s Top
Stocks