Intel’s Weakness, What This Will Mean.
Stocks ended
the day lower ahead of the pre Labor Day weekend. Positive data
on the jobs front was dragged down all day long by Intel’s lowered forecasts.
Tech stocks were hit particularly hit hard today losing more than 1.5%.Â
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The all important jobs reports showed that the economy continued to add jobs
last month. The Labor Department reported that 144K jobs were added in
August. Although this was slightly below the Street’s forecast of 150K
jobs, anything over 100K is seen as very positive. The Unemployment Rate slipped
by 0.1% to 5.4%. This was the lowest since October of 2001. Also helping to
improve the jobs picture, the Labor Department upwardly revised the July
non-farm payrolls from 32,000 to 73,000. In other economic news, the ISM
Services Index fell to 58.2% last month from July’s reading of 64.8%, this was
below consensus estimates of 62.2%. Hourly Earnings in August came in at 0.3% or
slightly better than consensus estimates of 0.2%. Lastly, the Average Workweek
in August remained at 33.8.Â
Semiconductor fell 5.23%. Late
yesterday, the world’s largest chip maker, Intel
(
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PowerRating) lowered its Q3
revenue forecast to between $8.3 billon and $$8.6 billion from it’s previous
range of $8.6 billion to $9.2 billion. Gross margins are now expected to be 58%
down from 60%. The Philadelphia Semiconductor Index
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PowerRating) fell to
levels not see since last June. Intel CFO Andy Bryant said that the company’s
lower guidance stems from both “a weaker demand picture and an inventory
correction”. The semiconductor industry’s is fueled by demand for
PCs, cellular phones and other electronic devices. A slowdown in chip sales
could have ripple effects throughout the tech arena.  Â
21st Century Insurance
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PowerRating) is
higher by more than 7%. Dutton Associates reiterated their “strong
buy” rating as 21st Century underwrites homeowner’s policies that are
mostly in central and southern Florida rather than coastal areas.Â
| Dow | -30.08 | 10260.20 |
| S&P 500 | -4.68 | 1113.63 |
| Nasdaq | -28.95 | 1844.48 |
Strong today are: Oil
Services
(
OSX.X |
Quote |
Chart |
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PowerRating) +1.59%, REITs
(
DJR.X |
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PowerRating) +0.59%.
Weak are: Semiconductors
(
SOX.X |
Quote |
Chart |
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PowerRating) -5.23%.
10-year Notes are -225 at 112 150
The dollar
is +0.66 at 84.66
Gold is -5.50 at 401.00
Crude Oil is -0.16 at
43.99
Volume is 527 million on
the NYSE and 778 million on the Nasdaq.
Market breadth is negative.
| NYSE | Issues | |
| Advancing | 1351 | Up Vol 377 |
| Declining | 1913 | Down Vol 533 |
| Ratio | 0.70 | 0.70 |
| Nasdaq |
||
| Advancing | 1141 | Up Vol 167 |
| Declining | 1842 | Down Vol 1065 |
| Ratio | 0.62 | 0.16 |
Stocks in the News
Intel
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PowerRating): Company issues downside
guidance for Q3.
Cypress Semi
(
CY |
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News |
PowerRating): Company announces downside guidance for September
quarter due to ongoing softness in customers orders.
Xilinx
(
XLNX |
Quote |
Chart |
News |
PowerRating): AG Edwards cut XLNX to Hold.
Pfizer
(
PFE |
Quote |
Chart |
News |
PowerRating): Company to resolve Quigley asbestos claims.
Teva Pharmaceutical
(
TEVA |
Quote |
Chart |
News |
PowerRating): Company announces $300 million buyback
of shares and convertible debentures.
Vincent Mao