Overheard On The Street
Here’s what they’re saying at mid-day:
Todd Gold, Technical Strategist, Gruntal
& Co.: "Certainly the semiconductors from yesterday seem to have
spilled over into today. Some of them are hanging in there, but in general, it’s
still a weak overall market here. We have negative breadth on both the New York
and the Nasdaq. What we’re really waiting for, and this is not a very technical
thing, is for some of the semiconductor analysts who were very bullish over the
past few weeks to come out and really defend their stocks pretty aggressively.
If that doesn’t happen, unfortunately, I think that we could be in some danger
here on both the SOX and the Nasdaq.
"If the Nasdaq 100 or the QQQs can close over 90 3/4, I would take that
as a near-term positive. As things stand now, there’s no real technical damage
done to the Composite, so we remain bullish at this time, however, we are
cautious of the semiconductor situation because it could certainly thwart any
rally attempts for the market in the near-term."
Barry Hymen, Chief Market Strategist, A
Ehrenkrantz King Nussbaum: "You’ve had a nice turnaround so far in the
Nasdaq because it was down most of the morning. The semiconductor sector has
rebounded a bit, but you really wouldn’t know it from most of the stocks other
than Intel. I believe this is a very interesting debate that is taking place on
Wall Street. You have a Salomon Smith Barney analyst who is understanding the
cyclicality of the semiconductor industry and making a call based upon the fact
that earnings and capital spending will peak in the next nine months to a year
versus the rest of Wall Street who is saying who cares about a year from now, we
have this quarter to deal with.
"That is the conflict here. It’s taking that longer viewpoint,
understanding that this is a cyclical sector, and trying to put a valuation tag
on a cycle that may be ending. It’s no wonder that you see these stocks just
knocked down because they have been the strongest sector and they also have
fairly high PEs. These are not normal valuations if you go back 10 or 15 years.
So I think this is an interesting debate that may be determined over the next
month or two, but it is good to see the Nasdaq turn around today because people
were a little nervous on that front."