Quarter to Quarter Aggressive Growth Stocks

[maronti1]

Super..FUTURE
SFOR

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124537038

[NYBob]

The rebuilding process in Silver & Gold -
will begin on technical factors and gather momentum -

once the market realizes that the central banksters -
haven't made the total 2006 Gold robbery of scheme sales -
called quota and are unlikely to make it next year as well -
(if that indeed is found to be the case when
the smoke clears) -
the current central banksters Gold cabals agreement -
runs to 2009 -

In my view this does not have to do with Gold's allies
coming together to push the price of Gold higher -

It has to do with try to saving the system and keeping the
various bullion banksters from getting in more over their
heads and creating a situation the central banksters
may not bail out of without total collapse -
still pushed a bit forward -

That is a more formidable and permanent force underlying
the market than the desire to push the price higher -

The system seems to require about 50 tonnes of central
bank Gold robbery per month - from the 888 peoples -
future welfare -

The question is:
Where is that Gold going to come from if you get
to a place where the previous sellers, or subscribed
sellers sell it many time and decide not to deliver? -

That is the situation with which the armies of
the night could very well be confronted when
the smoke clears -

Treasury secretaries, finance ministers, and chancellors
will play politics with money and finance and use whatever
tools at their disposal to advance the interests of
their political parties books in back pocket tells them -
that is a given by red bolsheviks lines -

At this moment the finance ministers in Europe want lower
interest rates? -
They are campaigning for it, using every avenue open to
them to make their argument -

But as powerful as they are, they have opposition in
Trichet and the European central banksters decide -

If you viewed only one side of the equation --
the finance ministers' side --
you might prepare your portfolio for a lower --
interest rate environment -

If so, you might be in for a nasty surprise if
the ECB holds sway -

It is also a given that the major players with their
concentrations of fiat capital and evil power will
endeavor to move the markets in their direction -

Some will view this as conspiratorial;
others will view it, as I do, as just market 666 elements
schemes that need to be figured into the ST equations -

If, in this example, the conspirators cabals were to drive
the price of a group of commodities lower, what would be
the result? -

A buying opportunity for those who have a need for or
believe in the LT long-term value of that commodity -

Gold is a good example in this regard -
Let me assure you that the bolsheviks East lies in wait,
just hoping for lower prices -

Powerful players -- even if they sit as head of the
finance ministry, the treasury department, or
the chancellery -- are not omnipotent -

They cannot have their way with the markets without
some banksters opposition -
To believe otherwise is the mistake that many
conspiracy theory proponents make -

How often, do you believe, some powerful individual
somewhere hasn't thought to himself:

"No matter what I do to discourage these people from
going to Gold, it keeps going up -
what's it ABCs going to take to calm their ardor? -
What's a finance minister to do?" -

I believe that those who believe that the conspirators
are godlike in their powers miss a good deal of
the analysis by believing that the opposition resides
on Mount Olympus -

In my view, if the analysis ends there, it stops short -

Little do some analysts know how well they serve
the lie by making others believe that those who are
perceived as powerful can have -
their 666 way unchallenged -

In my view, a group can conspire to make a market do -
something but cannot continue for LT long if it is
against the primary trend -
and cannot continue for LT long without -
substantial fiat expense -

As any student of ancient Greek literature knows -
there is always a price to pay even if you dine
with the gods and goddesses amid the clouds on -
Olympus.

We should ask ourselves a question:

If the anti-gold 666 conspirators are so powerful -

how did we get from $250 Gold to $730 Gold? -

How successful might we have been if we believed -
even then that the forces opposed to Gold -
were invincible? -

I do believe that there is value in understanding -
the natural forces at play in these markets -
including the powers within the 888 -

Franklin - FMNJ - PM's -
Est. 1864 - gather up -
the Cerro Rico - Precious Metals -
The Holy Grail of Truth - Au & Ag -
against the mendacity and chicanery -
of the central banksters, politicians -
and the overconsuming & debt-ridden public -





Yield curve is finally fully inverted...
give it a bit more
time for recession to hit -
while inflation continues to tear -
at the remaining purchasing fiat power -
of the once almighty USD$$ -
(now 95% less purchase power since 1960) -







Franklin Mining Announces Pulacayo Tailings Program
Tuesday September 12, 12:14 pm ET

http://biz.yahoo.com/iw/060912/0162261.html

Franklin Mining Announces Program to Fund Tailings Program
and Establish Ten Plants -
Thursday September 7, 12:52 pm ET

http://biz.yahoo.com/iw/060907/0160914.html

Count your microeconomics and ask yourself? -

were you want to be at the time when -

US & Can fiat$ next in line -
to take 3 zeros off the National huge debt? -



http://www.alkalizeforhealth.net/Ldebtclock.htm



In a very real sence, games can go on for ST -
The question here is;
Can the circus thru "fiat paper wealth" go on a bit more? -

History has shown that they end suddenly! -
with great puzzlement as to the loss of all importance -
without wealth the end result -

Silver will always be part of "The Real Gold & Silver Money" -
Some defend a fraud system with that, "its far too small
a market for large, modern economies" -

Well, its only to put a higher fair value on the Silver money -
it used to be worth $800/oz 500 years ago -



take the inflasion into the picture and Silver maybe worth -
a fair market value $80,000/oz sooner or later? -

Silver will do far better than any fiat fraud paper asset -
it will serve better as a "personal holding" and as
the major Real Money when its valued to its fair market value -

If it is of your way to balance wealth, then Silver will show
the LT Real value -

Metals have not shown their true worth for many years as
the world has done very well with manipulations of fiat fraud
paper money -

This is very good some say - outside of ex. FMNJ Potosi -

But, all things do change! -


As it is our time and place to live this change -
our thoughts must view the future as it must be! -

Who can know the minds of men and countries -
as the 666 fiat paper burns? -

In our present system - all fiat currencies are
backed by the US$ -

as long as the US$ is on an "oil standard" of backing -
no other country can change -

the BIS would destroy their economy in a second of storm -

Many think that a country may sell or cut it's CB/US debt
backing at will! -

They cannot? - they will not! -
Oil will not accept another system? -
as long as the Oil/Gold bond works? -

the world currency system is somewhat in a counterfeited
owg order? -

If a crisis erupts and Gold breaks the bond with oil -
then a change must take place! -

We will no doubt see a mass run of CBs into Gold -
at ANY price! - this we know! - as for now -
each person must protect your worth -

as the nation/state is locked from change? -
You still may have a little bit of some time -


FMNJ - need an 'every day Update' on the -
Silver Companies > Market cap's (updated?) -

FMNJ - Franklin Mining, Inc. = $45 MILLION?

http://www.investorshub.com/boards/board.asp?board_id=2957
http://www.investorshub.com/boards/board.asp?board_id=5406

vs. compare to -

ECU - ECU Silver = $488 MILLION

http://www.investorshub.com/boards/quotes.asp?ticker=v.ecu
http://www.investorshub.com/boards/board.asp?board_id=6098


HL - Hecla Mining Co = $681.71 MILLION
http://www.investorshub.com/boards/quotes.asp?ticker=cde&qm_page=64251&qm_symbol=hl
http://www.investorshub.com/boards/board.asp?board_id=6097


SIL - Apex Silver Mines Ltd. = $905.33 MILLION
http://www.investorshub.com/boards/quotes.asp?ticker=v.ecu&qm_page=4079&qm_symbol=sil
http://www.investorshub.com/boards/board.asp?board_id=5810


SLW - Silver Wheatonfiltered= $2.06 BILLION

http://www.investorshub.com/boards/quotes.asp?ticker=v.ecu&qm_page=98063&qm_symbol=slw
http://www.investorshub.com/boards/board.asp?board_id=4338


SSRI - Silver Standard Resources Inc. = $1.16 BILLION
http://www.investorshub.com/boards/quotes.asp?ticker=v.ecu&qm_page=17190&qm_symbol=ssri
http://www.investorshub.com/boards/board.asp?board_id=6095


CDE - Coeur d'Alene Mines Corp = $1.47 BILLION
http://www.investorshub.com/boards/quotes.asp?ticker=v.ecu&qm_page=35188&qm_symbol=cde
http://www.investorshub.com/boards/board.asp?board_id=5237


PAAS - Pan American Silver Corp. = $1.59 BILLION

http://www.investorshub.com/boards/quotes.asp?ticker=v.ecu&qm_page=63958&qm_symbol=paas
http://www.investorshub.com/boards/board.asp?board_id=4490

UCOI (UNCN) - Unico Inc. = $1.2 MILLION -
(only $1.2 is very oversold - undervalued) -



http://www.investorshub.com/boards/quotes.asp?ticker=ucoi
http://www.investorshub.com/boards/board.asp?board_id=6582

Including - The Silver Bell Mine -
The Deer Trail Gold & Silver Mines -
The Bromide Gold Mines -

Note. if You have more updated info -
Silver comp. market cap. please, don't
hesitate to let us know -
tia.

SILVER Chart TA LT - Strong Bullrun Long Overdue -


http://www.investorshub.com/boards/board.asp?board_id=5406

SILVER used to be worth -
more than GOLD -
history often repeat itself -



Do not let any volatility shake You out -
the more volatility the higher it will go -

the new trend waves will often be -
Fibonacci - 162% of the previous correction -

when the weak hands exhaust themselves -
we'll see the next waves up -

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt -
as of Aug. 2006:


http://www.alkalizeforhealth.net/Ldebtclock.htm

Unless the United States gets all of its economic
house in order ? -

Gold will become the basic real money again -
(which Gold has been for 1000's of years)
and national currencies will only be money -
if backed by - Gold.

With the exception only of the periods of -

- The Great Gold Standard -

practically all governments of history -

have used their exclusive power to issue fiat money -

to defraud with totalitarian bureaucratic powers -
rob, plunder and to make slaves -
of most the people -



http://www.goldrush21.com/

Thanks for your participations -
Brgds
Bob



___________________

[JUST 10-11-12]

For those interested the DPTR board is being constructed.


Keith

[jackhartmann]

I forgot the password. :P

Will try to put stuff here once in a while.

jack

[jackhartmann]

Portfolio performance for August was down 0.4%
Gilder2002 down 56.0% YTD. Down 1%
Fuel cells/Alt energy down 73.8% since August 2000. Down 0.3% for the month.
Gorilla Hunters down 77.9% since December 3, 2000. Up 5%
OC-192 down 90.4% since Mid-February 2001. Down 1% for the month
May Additions
HOOV $5.06 to 6.23. Up 23.1%

June Additions
TXCC $0.90 to 0.66. Down. 26.6%. Peaked in July.
PFE $32.35 to 33.08. Up 2.2%
HD $30.88 to 32.93 Up 6.6%

August Additions
BRCD $15.97 to 14.47 Down 9.3%
DISH $16.48 to 17.80 Up 8.0%
MIR $3.83 to 3.78. Down 1.3%
SBC $24.83 to 24.74 Down 0.3%
T 11.20 to 12.22 Up 9.1%
WINS 3.33 to 3.51 Up 5.4%

Deletions
RCNC $1.46 to 1.48. Up 1.3%
CIEN $4.03 to 3.45. Down 14.3%
EMC $7.50 to 6.64. Down 11.4%
CENT $15.00 to 12.90. Down 14.0%
CSCO $11.38 to 12.25. Up 7.6%
BBY $19.15 to 20.97. Up 9.5%
AMAT $13.44 to 13.98. Up 4.0%
NKE $44.09 to $44.00. Down 0.2%
BEAS $6.36 to 6.49. Up 2.0%
OSIP $14.77 to 15.52. Up 5.0%
MIMS $12.11 to 10.31. Down 14.8%

A look if 10K was invested in each stock. 250K Model starts anew each month.
21 Stocks rotated in January. (210K x 1.015)-210K = $3,150 profit or 1.5% profit
17 Stocks rotated in February (170K x -0.111) - 170K = $18,870 loss or -15,720K or down 6.2% YTD on 250K
20 Stocks rotated in March (200K x 1.019) - 200K = $3,800 profit or -11,920 or down 4.7% YTD on 250K
36 Stocks rotated in April (200K x -1.066) - 200K = $13,200 loss or -25,120 or down 12.5% YTD on 200K.
25 Stocks rotated in May (200K x 1.003) - 200K = $600 profit
or -24520 or down 12.2% YTD on 200K
25 Stocks rotated in June (250K x -1.035) - 250K = 8750 loss or -$33270 or down 16.6% YTD on 200K
15 Stocks rotated in July. (150K x 121.5)- 150K = 32250 profit or -20 or down 0.1% YTD 200K
21 Stocks rotated in August. (210K x -100.4)- 210K = -840 loss or -860 or down 0.4% YTD on 200K

Dow - 8736 to 8,663. Down 0.1% for period
NASDAQ - 1328 to 1314. Down 1.0% for period
S&P500 - 911 to 916. up 0.5% for month
Dow - 10221 to 8,663 Down 15.2% for the year
NASDAQ - 1950 to 1314. Down 32.5% for the year
S&P500 - 1148 to 916. Down 20.2% for the year

For August. Visiblilty looks bleak. Expect a bottom.

It appears the bottom was July 24, but not many were in.

For September, Think markets seem to continue. Expect 9/11 relief rally.

Jack

I forgot I even had this site :P

[jackhartmann]

Did you yahoo is what I get when at SI.

[jackhartmann]

Portfolio performance for April up 21.6%. Down 5% for the year
Gilder2001 down 23.8% YTD.
J-blimps down 37.1% since May 25.
Fuel cells/Alt energy down 24.8% since started in August.
Gorilla Hunters down 51.6% since December 3, 2000.
OC-192 down 37.6% since started in Mid-February.

Long timers
MDT - $45.74 to 44.25. Down 3.2%
ORCL - $14.98 to 17.15. Up 14.5%

2000 Additions
SCHL $36.06 to 42.98. Up 19.2%
PHA $50.37 to 52.25. Up 3.7%
RMBS $20.60 to 17.07. Down 17.01%
AMAT $43.50 to 53.89. Up 23.8%

January Additions
BRCD $20.89 to 35.62. Up 70.5%

February Additions
GLW $20.69 to 20.75. Up 0.2%
UCL $34.57 to 37.55. Up 8.6%
NTAP $16.81 to 21.86. Up 30.0%

March Additions
CAT $44.38 to 50.31. Up 13.3%
DRMD $5.78 to 7.42. Up 28.3%
X $14.69 to 18.78. Up 27.8%
DCI $26.69 to 28.24. Up 5.8%
BGP $16.83 to 17.73. Up 5.3%
NTRO $5.00 to 4.68. Down 6.4%
VLGC $1.34 to 2.78 . Up 107.4% Wowser.
WFII $4.13 to 6.51. Up 57.6%

Deletions
None

Average gain of 21.6%

A look if 10K was invested in each stock. Model starts anew each month.
27 Stocks rotated in January. (270K x 1.080)-270K = $21,600 profit or 8% profit
35 Stocks rotated in February. (350K x 0.79)-350K = $73,521 loss or 21% loss, Down 13% for the year.
30 Stocks rotated in March. (300K x 0.87)-300K = $39,000 loss or 13% loss, Down 26% for the year.
18 Stocks rotated in April. (180K x 1.216) – 180K = $38,800 profit or 21.6 % profit. Down 5% for the year.

Dow – 9879 to 10810. Up 9.4% for month
NASDAQ – 1840 to 2075. Up 12.7% for month
S&P500 – 1160 to 1253. Up 8.0% for month
Dow – 10787 to 10810. Up 0.2% for the year
NASDAQ – 2470 to 2075. Down 15.9% for the year
S&P500 – 1320 to 1253. Down 5.0% for the year


<I>For April. Further drift down of all indexes.</I>

Hahahaha. I ‘m so out of synch with the market.

For May, Greenspan, cuts rates by only 25 basis points.

As of 4/29/01 average tech fund was down 24.4%

http://screen.morningstar.com/FundSearch/SpecTechtrytd.html?

Only 7 tech base funds profitable.

Our portfolio shoots up to #15 out 317 funds. Top 5% in the tech sector.

Even though this is not the end of the month. I’ll be updating the monthly report the last Saturday of the month. Easier on me with baseball season starting for the kids.

Goal for May is to add a utility stock or finacail with some tech exposure gradually phrase in on a dip.

Spoke with the ever dedicated Mr. January. Up 60% this year on the great January and playing 100% energy stocks the last three months. Now looking for a semi run FWIW.

We have tied the S&P, lag the dow, and up 10% over the Nasdaq. Tough month on the back of some screamers.

Jack

[jackhartmann]

Bottom called here on April 3. "Put/call and VIX signaling a short term bottom. I see Greenspan intervening in the next two weeks. Economic news is poor and No one wants in the market."
http://www.investorshub.com/beta/read_msg.asp?message_id=70530

The Greenspan prediction also came true.

Jack

[jackhartmann]

Portfolio up 0.2%, Dow down 1.06%, Nasdaq down 0.86%, S&P500 down 0.85%, J-Blimps dowm 0.8%, Fuel cells/Alt Energy up 0.6%, Gorilla Hunters down 0.0%, Gilder2001 up down 0.1%, OC-192 up 1.7%.

NYSE Volume: 1,526 mln...Adv: 1198...Dec: 1866
Up Volume 533.57 Down Volume 985.08
New Highs 73 New Lows 31

Nasdaq Volume: 2,519 mln...Adv: 1825...Dec: 2018
Up Volume 1160.30 Down Volume 1341.32
New Highs 65 New Lows 32

Put/Call ratio 0.48 (Range 0.36 to 0.51)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.12 per million British thermal units. Up 2 cents

VIX 29.01
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Oil Services ($OSX) 118.23 +3.21 +2.79%Bounce after being down a few days

Collapse of the day
Hardware ($HWI) 232.83 -8.58 -3.55% Profitaking

QQQ at $48 Chart: Perhaps a turn. Blocks: 744/807. Volume%: 66
Profitaking

One stock
Microsoft( MSFT) Up 1.41% yesterday beat Wall Street's earnings estimates, reporting net income of $2.45 billion, or 44 cents a share, topping its 42-cent First Call/Thomson Financial target. Microsoft's revenue was $6.46 billion, up 14 percent from the year-ago period, and better than the 9 percent gain Wall Street analysts predicted.
Note: Received well. Volume highest in three months.

Portfolio Watch

BRCD up double digits. Banc of America Sec. upgrades to BUY from Mkt Perform; feels that business conditions at BRCD are near a bottom; signs of a bottom are consistent with firm's industry/channel checks as well as what other infrastructure companies have been seeing. CEO Reyes says that "enterprise customers are starting to spend money again" but says that this will not manifest itself in renewed revenue growth until the Fall; suggests that enterprises aren't sitting on their hands, they are just taking more time to make purchase decisions. Company indicates on call that revenues will be roughly flat in the July qtr before picking up in the fall. In response to question about McData (MCDT) and competition for business with EMC, CEO Greg Reyes says that Brocade "did not lose any revenue traction at EMC" and even gained share, and that there is no inventory build-up of Brocade pdts at EMC; subtly hints that there might be inventory build-up of MCDT pdts at EMC. On conference call, Brocade is relatively optimistic about the future; says this is low-water mark for the company, gross margins will remain in 60% area, company has no inventory overhang, and DSOs will remain in 50-60 day range. Stock only down slight in pre-market at 30.10, as this warning was not as bad as many had feared.

Watch List things to watch but not trade

Argentina Woes : Goldman Sachs squawks that financial situation in Argentina
could continue to get worse as no US help is expected and Argentine consumer
confidence is deteriorating thus threatening a run on the banks. Says that
recently appointed Finance Minister Cavallo has not proposed significant
spending cuts, thus increasing the default risk, and has also exacerbated
fears of a peso devaluation by talking about changing from a 1-to-1 dollar
peg to a peg vs a basket of currencies.
Note: really more important than many realize. We had Turkey blow up, The Thai Baht in trouble, now this.

The LatAm chatter is starting to make it's way around the street, and I'll
reiterate that my intention was only to pass along what I was hearing, not
talk my position. Todd Harrison of TSCM
Note: I think financials that have exposure or companies in that area may be vunerable.

Quote of the Day

Does the market have to decline because we're reaching an overbought reading Friday? No, it doesn't, but it can. And Thursday's rally wasn't very broad-based, so I suspect we will see the market back off for a few days. That action will keep the bears happy, as they'll feel justified that the rally has stopped, but it will also make the bulls happy, as they'll see the opportunity to jump on board. So the bears will try to push it down, while
the bulls will be in there buying. That's how momentum stalls. While we may be seeing a short-term peak in upside momentum that will probably cause us to back off here, I don't believe we've seen the last of this rally. For us to believe this rally is over, the intermediate-term indicators need to halt their rises and roll over as well, and these indicators are still rising. Helene Meisner
Note: Nasdaq up 24% in two weeks. That’s years worth gains in a normal market.

Summary

I am starting to feel that this market move resembles Oct 1998. We ran for three months before a pullback. I could envision a scenario of running hard to the May FOMC meeting, but the two sell indicators must not trigger.

Put/call got below sell indicator intraday, but option expirations was the reason. The put/call closed above 0.40 at the end. We will ride the wave until either Put/call or VIX hit sell numbers.

Jack

[jackhartmann]

IVX is good solid company. I have PHA and probably won't add another drug company to the portfolio. Has a good chance to run to $43 in the next couple of months.

Jack

[jackhartmann]

Portfolio up 5.3%, Dow 3.91%, Nasdaq up a top ten 8.12%, S&P500 up 3.91%, J-Blimps up 8.3%, Fuel cells/Alt Energy 2.9%, Gorilla Hunters up 13.8%, Gilder2001 up 12.4%, OC-192 up 12.1%.
Best days in Nasdaq history percentage wise.
01/03/01 up 14.17% Greenspan drops rates unexpectedly 50 basis points for fed funds rate
12/05/00 10.48% Greenspan, crude dropping below $30 and positive election outcome
04/05/01 8.92% DELL affirms guidance and Alcoa has a good quarter. Yahoo got Lehman upgrade.
04/18/01 8.12% Greenspan cuts rates, INTC says demand may have bottomed and TXN says largest wireless customer inventory done and they would be ordering.
05/30/00 7.94%
10/13/00 7.87% Friday the 13th and a Full Moon too.
12/22/00 7.56 Santa Claus visited the Nasdaq
10/21/87 - 7.34%
4/18/00 - 7.19%
4/25/00 - 6.57%
4/17/00 - 6.56%
4/10/01 – 6.09% CSFB upgrades European telcos to Neutral from underweight, Marconi says it will make numbers.
09/08/98 - 6.02%
12/08/00 – 5.99%
10/20/87 - 5.92%
11/14/00 5.78%
10/31/00 5.58% Halloween

NYSE Volume: 2.2 mln...Adv: 2036...Dec: 1062
Up Volume 1745.80 Down Volume 454.47
New Highs 134 New Lows 30

Nasdaq Volume: 3.1 mln...Adv: 2869...Dec: 1139 Wow the highest since the new volume recording started
Up Volume 2893.26 Down Volume 254.45
New Highs 108 New Lows 67

Put/Call ratio 0.51 (Range 0.45 to 0.51)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.14 per million British thermal units.

VIX 28.45
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Nasdaq 100 ($NDX) 1830.79 +159.28 +9.53% Greenspan, Greenspan, Greenspan

Collapse of the day
Hospitals ($RXH) 289.50 -10.28 -3.43% Sector getting hurt by Medicare caps.

QQQ at $39 Chart: gapped and held. Blocks: 1045/987. Volume%: 65 129M shares is record under new accounting system.

One stock

Intel (INTC) Up 20.12% Quarterly revenues came in at $6.7 billion versus expectations for $6.6 billion; earnings came in at $0.16 EPS relative to a consensus estimate of $0.15 EPS. More importantly, Intel issued second quarter guidance consistent with current analyst expectations. The company expects to generate between $6.2 billion and $6.8 billion in second quarter revenue with gross margins of approximately 49 percent. The company did state second half results should be "larger than" results for the first half of the year. Intel sees solid business in its distribution channels which is a leading indicator of what the company will see in upcoming quarters. Encouragingly, Intel feels quarter two will represent the frequently sought bottom of this current semiconductor downturn. As for current first quarter results, relative "strength" (read stability) in microprocessors was the key. CEO Craig Barret stated, ``Our microprocessor business appears to have stabilized and we expect to see normal seasonal patterns going forward from our current business level." Lehman analyst Dan Niles reducing FY01 est. to $0.55 from $0.65 (mean $0.65) and FY02 to $0.65 from $0.70 (mean $0.94)... Niles questions whether the pickup in demand being seen is related to a replenishment of channel inventory or a pickup in fundamental end demand; his conversations with PC OEMs yesterday indicate that they have not seen a bottom in demand; with a P/E of 40x calendar 2002 estimates, notes that INTC shares are not cheap.
Note: 7.5B in capex will be maintain also.

Portfolio Watch

Only PHA red. ORCL, AMAT, BRCD, NTAP, VLGC up double digits.

I didn’t realize that ORCL been up 7 days in a row.

VLGC is up 32.31%

Watch List things to watch but not trade

At about 10:54 ET the Fed cut interest rates by 50 basis points. This means the federal funds rate now stands at 4.5% while the discount rate is 4.0%.
Note: I expected it on April 1, but gave up on it last week.

Nasdaq futures trading lock limit up at +42.00 this morning on TXN and INTC news.
Note: I saw it on CNBC and thought CSCO news late Monday didn’t dampen the techs.

Hewlett-Packard (HWP) down 9.06% Company lowers Q2 outlook; puts earnings for the qtr in the range of $0.13-$0.17, or less than half the $0.35 mean estimate; cites global slowdown in consumer IT spending; forecast includes approx. $150 mln of one-time inventory and capacity write-downs associated with some of the company's consumer products. "At this time, it is quite clear that the U.S. downturn in the consumer market is now spreading to other regions, notably Europe..." Company planning to eliminate up to 3,000 management positions... Sees 2%-4% decline in Q2 revenues; expects revenues for Q3 to be flat sequentially and yr/yr; notes assumptions are subject to change based on evolving market conditions.
Note: Great timing for HP.

America Online (AOL) Up 11.62% Reports Q1 cash earnings of $0.23 a share, 3 cents above the First Call mean estimate, vs yr-ago pro forma net of $0.19. Total revenues increased 9% to $9.1 bln. AOL advertising and commerce revenues rose 37% to $721mln; cable ad revenues were up 17%. Subscription base rose 16% to 133 mln, with AOL service adding more than 2 mln new users. Company improved stickiness, as AOL users spent an average of nearly 70 minutes on line per day, up from 64 in the year-ago period. Successfully cross-promoting its brands, as evidenced by 1) addition of 1.1 mln new Time magazine subscriptions through the AOL service since June 2000 and 2) 69% jump in unique visitors to Time Warner Web sites such as CNN, Sports Illustrated, Entertainment Weekly. EBITDA grew 20% to $2.1 bln and EPS rose 21% (year/year) to $0.23 (two cents above estimates)... Revenues jumped 9% to $9.1 bln.
Note: Film division added quite a bit so all not so rosy as indicated.

Summary

4/10/01The troika effect should happen again. Another 5% gain in the Nasdaq in the next two weeks.

Yep. Never failing indicator.

Today rise might be like January starting a run to the May FOMC meeting. The key difference is that TXN and INTC gave some hope for the bottom. If it was two week as ago, John Joseph of SSB call was great timing.

I never got to buy on the 16th as I am very busy at work. Hope to relax some tomorrow.

Jack

[goop]

What do think of IVX?

Drug companies in general should have good earnings and there is news today about a Pepcid generic. The news says IVX has gotten 4 approvals with 34 more waiting. Fundamentals show yr-to-yr gains and looks like they have a 3rd Q down repeating cycle.

Think this fits in your scheme of things.

[jackhartmann]

Portfolio down 2.2%, Dow down 1.28%, Nasdaq 3.62%, S&P500 down 2.00%, J-Blimps down 4.6%, Fuel cells/Alt Energy down 0.8%, Gorilla Hunters down 5.4%, Gilder2001 down 7.8%, OC-192 9.3%.

NYSE Volume: 1,448 mln...Adv: 865...Dec: 2130
Up Volume 263.72 Down Volume 1170.61 day 1
New Highs 58 New Lows 53

Nasdaq Volume: 1,824 mln...Adv: 1198...Dec: 2395
Up Volume 228.36 Down Volume 1553.12 day 2
New Highs 48 New Lows 185 20 days of 2/1

Put/Call ratio 0.82 (Range 0.69 to 0.82)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.38 per million British thermal units. Down 3 cent.

VIX 36.75 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Gold ($XAU) 50.40 +0.18 +0.36% Flight into quality

Collapse of the day
Network ($NWX) 357.69 -28.62 -7.41% SCMR, EXTR, and A warn yesterday evening.

QQQ at $36 Chart: gapped and held. Volume good, but not blazing. Blocks: 631/618 pos for 3 day. Volume%: 60

One stock

Tellabs (TLAB) down 17.18% Telecom equipment maker lowers Q1 outlook to $0.29 per share, from previous guidance of $0.35-$0.38 (mean $0.36); cites reduced and deferred spending by major communications carriers late in the qtr. On conference call, company saying received requests from customers in the last two weeks of the qtr to push large number of Titan orders into the next qtr; notes that these were push-outs, not cancellations
Note: Not a surprise but the size of the decline was.

Portfolio Watch

BRCD, DRMD, and BGP were green.

Medtronic (MDT) Robertson Stephens initiates coverage with a LT ATTRACTIVE rating and 12-month price target of $50; cites tremendous new product pipeline and excellent growth prospects.

Applied Materials (AMAT) : Lehman becoming more cautious on company's fundamental outlook for the next 2-3 qtrs, citing continued weakness in industry fundamentals and lower projected capital spending; thinks there is potential earnings risk to the downside.

Watch List things to watch but not trade

Power-One (PWER) Banc of America Sec. cautions that earnings warnings from SCMR and EXTR reaffirm firm's thesis that PWER's customer base is experiencing badly deteriorating fundamentals; feels PWER is expensive to its peers and near term prospects.
Note: Always mean to DD this one.

Motorola (MOT) Strongly denies published report that it might soon face a serious liquidity problem due to its amount of outstanding commercial paper of $6.4 billion as of December 31, 2000; through April 6, MOT had more than $4.5 bln in cash and cash equivalents vs $3.1 bln in outstanding commercial paper.
Note: This debt is the albatross.

Quote of the Day

"In the next few weeks, we will likely see a mixed bag of earnings results at best. We think the leading stocks in a narrow recovery will be dominated by recession-resistant stocks in the consumer-related businesses, oil and gas, and independent power producers," commented Louis Navellier of the Navellier Performance Funds.
Nopte: Noticed the nat gas is holding the $5 level well.

Summary

<I>4/5/01 Really no major warnings tonight. Maybe a dead cat bounce on the Nasdaq tomorrow.</I>

Yep. A deadcat bounce indeed.


Jack

[jackhartmann]

Portfolio up 6.9%, Dow up 4.23%, Nasdaq up top three 8.92%, S&P500 up 4.37% J-Blimps up 11.5%, Fuel cells/Alt Energy 5.4%, Gorilla Hunters 14.3%, Gilder2001 down 13.0%, OC-192 15.8%.
Best days in Nasdaq history percentage wise.
01/03/01 up 14.17% Greenspan drops rates unexpectedly 50 basis points for fed funds rate
12/05/00 10.48% Greenspan, crude dropping below $30 and positive election outcome
04/05/01 8.92% DELL affirms guidance and Alcoa has a good quarter. Yahoo got Lehman upgrade.
05/30/00 7.94%
10/13/00 7.87% Friday the 13th and a Full Moon too.
12/22/00 7.56 Santa Claus visited the Nasdaq
10/21/87 - 7.34%
4/18/00 - 7.19%
4/25/00 - 6.57%
4/17/00 - 6.56%
09/08/98 - 6.02%
12/08/00 – 5.99%
10/20/87 - 5.92%
11/14/00 5.78%
10/31/00 5.58% Halloween
NYSE Volume: 1.54 bln...Adv: 2303...Dec: 753 day 1
Up Volume 1343.33 Down Volume 195.53 day 1
New Highs 66 New Lows 26 day 1

Nasdaq Volume: 2.29 bln...Adv: 2832...Dec: 851 day 1
Up Volume 2175.91 Down Volume 86.37 day 1
New Highs 58 New Lows 105 19 days of 2/1

Put/Call ratio 0.70 (Range 0.70 to 0.86)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.42 per million British thermal units. Up 26 cent.

VIX 34.98 down
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
DOT ($DOT) 202.95 +24.35 +13.63% Lehman upgrade to YHOO helped.
Collapse of the day
Gold ($XAU) 50.22 -0.07 -0.14% Some selling, but most everyone sat on what they had

QQQ at $37 Chart: gapped and held. Volume good, but not blazing. Blocks: 663/625 neg for 3 day. Volume%: 69

One stock

Dell Computer (DELL) up 13.52% Last night, PC maker issued press release stating plan to reaffirm Q1 earnings and revenue targets this morning at its spring analyst meeting. Company is maintaining quarterly targets of $0.17 a share, on $8 bln in revenue. CSFB makes comments after the direct computer systems maker reaffirmed Q1 guidance of $8 bln in revenues and earnings per share of $0.17; reports that management would not answer questions as to how it will achieve consensus EPS estimates with regard to lower gross margins vs. higher revenue growth and lower operating expenses; firm continues to believe that Dell will outperform the group, but cautions that group fundamentals could worsen near-term as pricing wars erupt.
Note: A TXN person of unknown reliability said DELL pumped up the numbers. Expect let down on both TXN and DELL on earning or the future.

Portfolio Watch

Every single stock was green!. RMBS, AMAT, BRCD, NTAP were up double digits.

Watch List things to watch but not trade

webMethods (WEBM) Up 11.76% Provider of integration software solutions expects to report Q4 results in the range of $0.00 to ($0.03), compared to a profit of $0.06 anticipated by Wall Street; puts revenue at $60-$62 mln (mean est. $65 mln). Company says it will need to reassess revenue guidance and further monitor cost structure given that its customers, in a number of cases, are deferring IT spending decisions
Note: Warned on a good day.

Those folks who have been calling for a V bottom should be happy with today, but most traders I know are still not believing this. This was the third largest % gain in the Naz ever. Also known as "crashing up". Dave Nadig on TSCM
Note: I don’t see the V bottom scenario. If it happened after April 15, maybe, but not now.

Verizon Comms (VZ) up 1.23%: Company's Verizon Wireless unit reports a 518,000 increase in net new customers during Q1. Merrill Lynch says Verizon Wireless report of a 518K increase in new customers was below firm's range of 575-750K (with most analysts at 700-750K). Thinks shortfall was due primarily to two factors that are, in this case, specific to Verizon Wireless; 1) a one-time adjustment to the prepaid base and 2) an increase in churn, in particular higher analog churn. Nevertheless, expects sector to be under pressure today as investors react to the news
Note: LU got 5B from them. Actual proof that the build our will need to begin. This a large increase despite ML negative waves.

Yahoo! (YHOO) Up 22.61% Lehman upgrades to BUY from MKT PERFORM; feels that at current levels, the downside on the stock is protected by takeover potential; convinced that the worst is over and the risk-reward on the shares is favorable for investors with a longer-term time horizon; firm has a 12-month price target of $20.
Note: Shorts hopping all over this. One more day and there will be some damage to the shorts.

I've been out of my old favorite JDSU for a while now, and glad of it. Morgan is telling clients this morning that they're hearing that order cancellations have suddenly slowed dramatically, and that new orders have actually unexpectedly picked up. Can you believe it? Good news in optical-land? Unheard of!! Morgan has had a hot hand in this space, and I'm going with them for a trade. Don Luskin on TSCM
Note: No access to note.

Emulex (EMLX) Up 36.00%: Company projecting that Q3 pro-forma earnings will approximate $0.13 per share, up roughly 30% from the yr-ago, but down from its earlier expectation of up to $0.23 (mean $0.20). Cites continuation of the downturn in Fibre Channel host bus adapter demand for need to lower forecasts. "It has now become clear that the progressive weakening of the economic climate impacted the storage networking sector during the first calendar quarter." Company has insufficient visibility to provide guidance on future quarters at this time.
Note: Can you imagine shorting on this at the open and watch it rocket up all day.

Extreme Networks (EXTR) AH Company warns for Q3; sees loss of $0.06-0.08 versus current consensus of $0.12; revenues seen at $110-115 mln versus $163 mln consensus; company also announces layoffs that will reduce cost structure by 10%; Extreme cites weakness in North America which delayed purchasing decisions at major customers. International sales rose to 61% of total from 50% in the Dec qtr. Company's sales force says that customers still dedicated to network plans, but have delayed spending. On conference call, company notes the following: book-to-bill was greater than 1 for the quarter; pricing environment did not see any major shifts; gross margins roughly 48% from 51.8% last qtr due primarily to reduced volume; in dollar terms international business was flat to down with almost all of the decline coming North America; most delayed shipments were delayed until next qtr; expects return to profitability this calendar year.
Note: I need to see cash and insider buying before buying this.

Sycamore Ntwks (SCMR) AH Company issues a warning for Q1; sees loss of $0.16-0.19 versus current EPS estimate of $0.05, and sees revenues of just $50-60 mln, a fraction of the $157 mln consensus; company also announces a restructuring and associated $140-150 mln charge to reduce costs. On conference call, company cites four reasons for the dramatic revenue shortfall: 1) two of its largest customers have recorded "little to no orders" this quarter; 2) cancellation of orders by smaller customers; 3) delays with ramping production of SN16000 optical switch; 4) negotiations with an emerging carrier that shifted from a cash deal to vendor financing that forced SCMR to walk away from the deal. On conference call, CFO says that SCMR "will not be generating cash from operations for the next several quarters." Stock still sinking, at 6 7/16.
Note: Now we know why insiders never bought once.

Agilent Tech (A) AH Company says dramatic change in orders will have a negative impact on Q2 results; company will also temporarily reduce employee pay by 10%; says that demand from "major customers has dropped dramatically in the last four to six weeks.
Note: Optical is worse now than a month ago.

Quote of the Day

This rally has probably trapped a lot of shorts. Today is the reverse of Tuesday, when the market couldn't rally one bit, but this session has seen no pullbacks at all. This may ensure a rally into option expiration day two weeks away. Wouldn't suprise me. Jay Shartis on TSCM
Note: There are some option millionaire made today. Just not me. I can’t see a two week rally into option expirations. Wishful thinking.

Summary

<I>4/5/01 Really no major warnings tonight. Maybe a dead cat bounce on the Nasdaq tomorrow.</I>

It looked good, but I’m not convinced. We are still 4% down on the Nasdaq for the week. A lot shorts got pounded so hedge funds are going to jack it and force more covering. The volume was good, but lower the two red days before.

Met with a railroad employee. 230K of employees supporting 860K retirees. System solvent for 20 years. Union Pacific is largest one out there. Rails are still the cheap way to move freight. Sector consolidating and been in a bear for years.

Jack

[jackhartmann]

Portfolio up 0.1%, Dow up 0.31%, Nasdaq down 2.04%, S&P500 0.29% J-Blimps down 2.0%, Fuel cells/Alt Energy down 0.8%, Gorilla Hunters down 1.7%, Gilder2001 down 4.3%, OC-192 down 4.2%.

NYSE Volume: 1.66 mln...Adv: 1517...Dec: 1533 Huge volume
Up Volume 807.14 Down Volume 839.54
New Highs 61 New Lows 154 day 2

Nasdaq Volume: 2.42 mln...Adv: 1472...Dec: 2207
Up Volume 687.42 Down Volume 1681.62 day 2
New Highs 43 New Lows 681 Huge 18 days

Put/Call ratio 0.71 (Range 0.59 to 0.76)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.18 per million British thermal units. Up 7 cent.

VIX 39.07 down
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Gold ($XAU) 50.29 +2.50 +5.23%

Collapse of the day
Semis ($SOX) 463.49 -27.17 -5.54% AMAT and the chip equipment leading it down

QQQ at $35 Chart: descending. Blocks: 591/641 neg for 3 day. Volume%: 56

One stock

Lucent Tech (LU) down 14.01 Dow Jones running a headline stating that Lucent is denying bankruptcy rumors. CIBC analyst says that LU unlikely to go bankrupt as company needs roughly $5 bln to cover debt and operating losses, but lenders will probably not want to push company into bankruptcy and LU can always resort to sales of either optical fiber or wireless units (worth roughly $6-7B and $5B respectively). Analyst notes that biggest concern for LU is its $6-7 bln in vendor financing, and that today's rumors could be related to fears concerning $500 mln in financing to troubled WCII or talk that LU walked away from a vendor financing deal in Europe.
Note: 5B in debt and this is killing LU and other depending on it. Been hearing LU bids contracts but having a hard time getting timetables met. Nothing I can confirm first hand though.

Portfolio Watch

Tech was down, rest mostly up.

Watch List things to watch but not trade

Microsoft (MSFT) Financial Times reports that Microsoft has fallen behind schedule in shipments of a software development kit for its Xbox game console. "Although falling a few days behind schedule is unlikely to force Microsoft to postpone Xbox's autumn launch, prolonged delays could mean the group's initial third-party software might be disappointing," reports the Financial Times.
Note: Starting to see SONY PS2 in stores now. Free online gaming is a big threat to it though.

"We are now at the stage where we are double and triple discounting more of the same. We think it is hard to stand back and remove the emotion, which is why it's difficult to buy bottoms and sell tops," commented Elizabeth Mackay, Bear Stearns' chief strategist. "We think a year from now, we could look back and say that the market was oversold, pessimism was rampant, we had enormous cash buildups are on the sidelines, the Fed was easing - why didn't we buy? Bottom line, because prices are going lower and [there's the] fear factor," Mackay concluded in a note to clients Tuesday morning.
Note: Hopefully big red volume before April 15.

Calif. Amplifier (CAMP) Company confirms overstatements to net income for fiscal year 2000 as discussed in March 29 press release, as well as additional overstatements to net income for the interim quarterly statements issued in fiscal year 2001. Company working with Nasdaq to determine when trading in stock will be allowed to resume.
Note: Curious to see if it gets cheap.

"Since a lot of tech companies finalize sales in the last days of any given quarter, it's not surprising to see these warnings crop up right now. The only surprising part of [the recent tech news] was probably the magnitude of the earnings warnings. IT spending is falling like a rock," commented Louis Navellier of the Navellier Performance Funds. "There are very few sectors that are immune from selling right now. Many investors are still selling stocks to pay for last year's realized capital gains. In addition, the margin investors are selling whatever they can, even their good stocks, to meet margin requirements. The best equities to invest in right now are the recession resistant stocks that have low-to-moderate price-to-earnings ratios. The current hot spots are consumer-related stocks, oil and gas stocks, and the independent power producers," Navellier added.
Note: Louis saying what I’ve said all along.
Cisco Systems (CSCO) CNBC reporting that Cisco has discontinued its optical router product; this product was a result of its $500 mln August 1999 Monterey Networks acquisition and has long been rumored to be in trouble (rumors which Cisco frequently denied). Light Reading reported in early February that Cisco had given up on the Monterey gear and was developing a new optical switch in-house. Cisco cited weak market conditions for the decision, but Ciena (CIEN) has had much success with its optical switch, suggesting that product shortcomings had more to do with this decision.
Note: Will help JNPR and CIEN.
Tech is still about 18% of the S&P. In '92, it was 2.7% Ian McDonald of TSCM.
Note: I think the financials were on fire then.

FedEx Corp (FDX) AH: Executive Vice President and Chief Financial Officer Alan B. Graf, warns that based on current volume trends in Q4 "it is unlikely that we will hit our prior earnings forecast of $0.85 to $.90 per share for the fourth quarter"; company cites deteriorating economic conditions which have plunged more rapidly than expected; reports that March 2001 U.S. domestic express package volume at FedEx Express is expected to decline 4.4 percent compared to the prior year period; previous volume guidance for U.S. domestic express package volume had been a decline of 1 to 2 percent; additionally says that the current economic uncertainty "is making it extremely difficult to forecast future financial results";
Note: recession as business slows down

"The Register," the UK-based insider website for the microprocessor industry, a story that VIA Tech, Taiwanese chipset maker, said chip sales in March were 24% higher than in February (or 57% more than March 2000). The growth was driven by demand for AMD chipsets using DDR memory. Demand for such chipsets "exceptionally high." From Luskin of TSCM
Note: Great news. Wonder why no one else carrying it.

Watchguard Tech (WGRD) AH: Company warns for Q1; sees loss of $0.10-0.14 per share; current EPS estimate is $0.06. WatchGuard expects to report net revenue of $16.7 to $17.3 mln. Company cites continued economic slowdown;
Note: Another security company to warn. SYMC and CHKP next.

Another economic data point to add to the slowdown camp. It is becoming increasingly clear that energy demand is sagging as a result of overall strength (or lack thereof) in the economy and not just based on price. Very little of the price-sensitive demand appears to be bouncing back even as gas prices have dropped precipitously in the past month. This morning Lehman's Tom Driscoll lowers his natural gas price estimate for 2001 to $5.00/MMBtu from $5.75/MMBtu saying "huge natural gas demand losses persist." The nat gas stocks may see some short-term strength after the recent sell-off, but commodity pricing concerns will continue to put pressure on the group. Chris Edmonds of TSCM
Note: Interesting point that is missed by many chasing the energy sector.

Akamai Tech (AKAM) Company warns for Q1; sees revenues of $39-41 mln; est $45 mln; current EPS estimate is ($0.62). However, company sees narrower than expected loss. AKAM plans to reduce overall workforce by 14%.
Note: A company waiting for a buyer.

Dell Computer (DELL) issued a press release not long ago announcing that the company will reaffirm Q1 guidance tomorrow.
Note: A hint of good news in that.

TheStreet.com (TSCM) : Company to take steps to reduce operating expenses due to continued economic uncertainties and difficult market conditions; plan includes a 20% reduction in worforce, subleasing a portion of its principal office space, and cutting discretionary spending in areas such as contract services, marketing and travel; measures expected to save over $15 mln on an annualized basis
Note: On last legs despite getting better.



Abby Cohen at the World Economic Conference. She noted that the top 1% of U.S. households control 50% of equities. In addition, she said the top 10% control 90% of the equity market.
Note: Makes sense. I’m sure Steve Forbes lost more money than me last year.

Quote of the Day

"When you get close to a bottom, the market tends to display this kind of volatility. Until you get companies to say the outlook is improving, we won't stage any meaningful rally," observed Peter Cardillo, chief strategist and director of research at Westfalia Investments.
Note: This volatility was present all the way down.

Summary

Really no major warnings tonight. Maybe a dead cat bounce on the Nasdaq tomorrow.


Jack

[jackhartmann]

Portfolio down 8.5%, Dow down 2.99%, Nasdaq down 6.17%, S&P500 down 3.44% J-Blimps down 8.5%, Fuel cells/Alt Energy down 5.8%, Gorilla Hunters down 11.8%, Gilder2001 down 11.8%, OC-192 down 11.3%.

Record Nasdaq days on the downside
10/19/87 -11.35 %
04/12/00 -9.67
10/20/87 -9.00
10/26/87 -9.00
08/31/98 -8.56
04/03/00 -7.64
01/02/01 – 7.23% Funds lock in profits, Robbie Stephens downgrades EMC, INKT, NTAP, many others. NAPM Index at 43.7% (consensus was 47.1%), the lowest since April 1991 and indicative of a continued contraction in the mfg. sector
12/20/00 – 7.12% FDRY takes down infrastructures with the warning.
04/13/00 -7.02
10/27/97 -7.02
03/12/01 – 6.30% CSCO warns prior period, Barron’s pummeling fiber optics stocks, ERICY warns.
01/05/01 – 6.20% BAC rumors of bad shortfall due to CA utilities and CSCO rumors of missing quarter sent it down.
04/03/01 – 6.17% - ABRA, ITWO, RBAK, AXP, INKT, ENTU, BVSN, warn last night.
03/27/80 -6.15%
03/28/01 – NT and PALM warn the night before sending networkers down double digits.
05/23/00- 5.93%

NYSE Volume: 1.55 bln...Adv: 738...Dec: 2351 Monster volume,
Up Volume 90.02 Down Volume 1103.35 day 2
New Highs 42 New Lows 141 day 1

Nasdaq Volume: 2.54 bln...Adv: 779...Dec: 2984 Capitulation day.
Up Volume 139.69 Down Volume 1811.96 say 2
New Highs 26 New Lows 541 Huge 17 days

Put/Call ratio 0.97 (Range 0.76 to 0.97)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.11 per million British thermal units. Up 1 cent.

VIX 39.33 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Gold ($XAU) 47.79 +1.59 +3.44% Flight from red into yellow.

Collapse of the day
DOT ($DOT) 180.74 -30.06 -14.26% All the tech warnings hit sector.

QQQ at $35 Chart: descending Blocks: 625/680 neg for 2 day. Volume%: 65

One stock

Inktomi (INKT) Down 55% INKT slashing 25 percent of its work force. The company said late Monday it now sees a second-quarter loss of 23 to 25 cents a share vs. the 4-cent a share loss that had been expected by First Call.
Note: I can’t imagine the calls to a fund manager who rode this down.

Portfolio Watch

SCHL and AMAT were green.
ORCL, BRCD, NTAP were down double digits.

Watch List things to watch but not trade

Nokia (NOK) Announcing (eur) 1.5 bln deal with mobile operator Orange to deliver solutions for a European 3G network. As part of the agreement, NOK will provide a bridge-financing package with an estimated value of over (eur) 2 bln
Note: Didn’t help wireless stock one bit.

Finisar Corp (FNSR) Company announces that an affiliate of founder Frank H. Levinson purchased a total of 1.2 million FNSR shares in a series of open market transactions on March 29 and 30. Prior to these purchases, Levinson was the beneficial owner of approx. 41.1 mln FNSR shares or 22% of company's outstanding stock.
Note: This was hammered with the rest.

Ford Motor (F) Company announces that March U.S. sales declined 13% from the same month a year ago; also says Ford is reducing its previously announced second quarter North American production plan by 20,000 units to 1,230,000 cars and trucks, primarily reflecting the elimination of one of three shifts of production at the Michigan Truck Plant;
Note: Ford troubles affects all of the manufacturers.

Rational Sftwr (RATL) Company warns for Q4; sees EPS of $0.20-0.22; current EPS estimate is $0.22; expects revenues between $240 and $245 mln. The company also announced that it would reduce its workforce by approximately 10%, or a total of approximately 400 positions;
Note: Not surprising.

Quote of the Day

"There's a lot of anxiety. Until recently, drug and natural gas companies had been holding up but it's now almost impossible to find areas of the market immune to the selling. Investors are [dumping] the most liquid names to pay for margin calls," remarked Mike Sheldon, chief market strategist at Spencer Clarke. "We're seeing the unraveling of the massive building in capital equipment spending during the late 1990s. Time is a key factor [in the healing process]," Sheldon conceded.
Note: Nothing is a safe except cash. At least we have low inflation.

Summary

Other techs like KANA, BBSW, KEYN also warned.

Put/call and VIX signaling a short term bottom.

I see Greenspan intervening in the next two weeks. Economic news is poor and No one wants in the market.

Jack

[jackhartmann]

Portfolio down 8.5%, Dow down 2.99%, Nasdaq down 6.17%, S&P500 down 3.44% J-Blimps down 8.5%, Fuel cells/Alt Energy down 5.8%, Gorilla Hunters down 11.8%, Gilder2001 down 11.8%, OC-192 down 11.3%.

Record Nasdaq days on the downside
10/19/87 -11.35 %
04/12/00 -9.67
10/20/87 -9.00
10/26/87 -9.00
08/31/98 -8.56
04/03/00 -7.64
01/02/01 – 7.23% Funds lock in profits, Robbie Stephens downgrades EMC, INKT, NTAP, many others. NAPM Index at 43.7% (consensus was 47.1%), the lowest since April 1991 and indicative of a continued contraction in the mfg. sector
12/20/00 – 7.12% FDRY takes down infrastructures with the warning.
04/13/00 -7.02
10/27/97 -7.02
03/12/01 – 6.30% CSCO warns prior period, Barron’s pummeling fiber optics stocks, ERICY warns.
01/05/01 – 6.20% BAC rumors of bad shortfall due to CA utilities and CSCO rumors of missing quarter sent it down.
04/03/01 – 6.17% - ABRA, ITWO, RBAK, AXP, INKT, ENTU, BVSN, warn last night.
03/27/80 -6.15%
03/28/01 – NT and PALM warn the night before sending networkers down double digits.
05/23/00- 5.93%

NYSE Volume: 1.55 bln...Adv: 738...Dec: 2351 Monster volume,
Up Volume 90.02 Down Volume 1103.35 day 2
New Highs 42 New Lows 141 day 1

Nasdaq Volume: 2.54 bln...Adv: 779...Dec: 2984 Capitulation day.
Up Volume 139.69 Down Volume 1811.96 say 2
New Highs 26 New Lows 541 Huge 17 days

Put/Call ratio 0.97 (Range 0.76 to 0.97)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.11 per million British thermal units. Up 1 cent.

VIX 39.33 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Gold ($XAU) 47.79 +1.59 +3.44% Flight from red into yellow.

Collapse of the day
DOT ($DOT) 180.74 -30.06 -14.26% All the tech warnings hit sector.

QQQ at $35 Chart: descending Blocks: 625/680 neg for 2 day. Volume%: 65

One stock

Inktomi (INKT) Down 55% INKT slashing 25 percent of its work force. The company said late Monday it now sees a second-quarter loss of 23 to 25 cents a share vs. the 4-cent a share loss that had been expected by First Call.
Note: I can’t imagine the calls to a fund manager who rode this down.

Portfolio Watch

SCHL and AMAT were green.
ORCL, BRCD, NTAP were down double digits.

Watch List things to watch but not trade

Nokia (NOK) Announcing (eur) 1.5 bln deal with mobile operator Orange to deliver solutions for a European 3G network. As part of the agreement, NOK will provide a bridge-financing package with an estimated value of over (eur) 2 bln
Note: Didn’t help wireless stock one bit.

Finisar Corp (FNSR) Company announces that an affiliate of founder Frank H. Levinson purchased a total of 1.2 million FNSR shares in a series of open market transactions on March 29 and 30. Prior to these purchases, Levinson was the beneficial owner of approx. 41.1 mln FNSR shares or 22% of company's outstanding stock.
Note: This was hammered with the rest.

Ford Motor (F) Company announces that March U.S. sales declined 13% from the same month a year ago; also says Ford is reducing its previously announced second quarter North American production plan by 20,000 units to 1,230,000 cars and trucks, primarily reflecting the elimination of one of three shifts of production at the Michigan Truck Plant;
Note: Ford troubles affects all of the manufacturers.

Rational Sftwr (RATL) Company warns for Q4; sees EPS of $0.20-0.22; current EPS estimate is $0.22; expects revenues between $240 and $245 mln. The company also announced that it would reduce its workforce by approximately 10%, or a total of approximately 400 positions;
Note: Not surprising.

Quote of the Day

"There's a lot of anxiety. Until recently, drug and natural gas companies had been holding up but it's now almost impossible to find areas of the market immune to the selling. Investors are [dumping] the most liquid names to pay for margin calls," remarked Mike Sheldon, chief market strategist at Spencer Clarke. "We're seeing the unraveling of the massive building in capital equipment spending during the late 1990s. Time is a key factor [in the healing process]," Sheldon conceded.
Note: Nothing is a safe except cash. At least we have low inflation.

Summary

Other techs like KANA, BBSW, KEYN also warned.

Put/call and VIX signaling a short term bottom.

I see Greenspan intervening in the next two weeks. Economic news is poor and No one wants in the market.

Jack

[jackhartmann]

Portfolio down 3.1%, Dow down 1.02%, Nasdaq down 3.11%, S&P500 down 1.25% J-Blimps down 3.3%, Fuel cells/Alt Energy down 3.3%, Gorilla Hunters down 4.5%, Gilder2001 down 5.8%, OC-192 down 4.6%.

NYSE Volume: 1,392 mln...Adv: 1171...Dec: 1855
Up Volume 382.95 Down Volume 994.01 Day 1
New Highs 66 New Lows 67

Nasdaq Volume: 1,821 mln...Adv: 1001...Dec: 2693
Up Volume 336.65 Down Volume 1412.36 day 1
New Highs 61 New Lows 303 Huge 16 days

Put/Call ratio 0.73 (Range 0.68 to 0.80)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.10 per million British thermal units. Up 10 cent.

VIX 34.75 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Insurance ($IUX) 737.35 +11.28 +1.55%

Collapse of the day
Semis ($SOX) 503.17 -41.87 -7.68% Within the chip index, chip equipment stocks got hit in Monday trading. Applied Materials (AMAT) shares shed $3.50 to $40 and KLA-Tencor (KLAC) stock dropped $4.56 to $34.81. Novellus Systems (NVLS:) shares gave up 11 percent to $36.25.
Note: AMAT near $38 support.

QQQ at $37 Chart: descending Blocks: 382/554 neg for 1 day. Volume%: 63

One stock

Art Tech Grp (ARTG) down 50.26% Developer of CRM software warns of a Q1 loss in the $0.19-$0.22 range vs profit of $0.10 a share anticipated by analysts; puts DSOs at approx. 90 days... At end of the qtr, company saw large enterprise customers across many vertical industries delay technology purchases due to the current economic environment.
Note: Took whole B2B sector down today.

Portfolio Watch

Netro Corp (NTRO) down 13.75% : Provider of broadband wireless access solutions expects revenues to decline 61% on a sequential basis to $8.5 mln. Sees loss per share for the qtr significantly greater than current analyst estimates.
Note: Not good timing.

Watch List things to watch but not trade

American Express (AXP) down 3.85%: Warns that Q1 earnings will decline 18% from yr-ago net of $0.48. Wall Street had expected company to earn $0.51 for the qtr. The decline will reflect pre-tax losses of about $185 mln from the write-down and sale of certain high-yield securities held by American Express Financial Advisors. Without the pre-tax losses of $185 million from the write-down and sale of high-yield securities, American Express said profits would have come in flat with the year-ago quarter at 48 cents a share.
Note: Hit other financials too. High yield = junk bonds.

Investor redemptions from stock funds outpaced investments by $5.7 billion in the five trading days ending last Thursday, according to the latest data from liquidity tracker TrimTabs.com.
Note: More and more, investors pulling the wreckage into money markets.

RealNetworks (RNWK) up 7.08%: Formally announces deal with Warner Music Group, Bertelsmann's BMG Entertainment and EMI Group to license their music for RNWK's planned online music subscription service.
Note: Deal looks good, but the devil is in the details.

It has been a little more than a week since the market sent us one of its most reliable, yet least-seen bullish signals. Only seven times in the past 32 years has the 10-day moving average of the Arms Index for the New York Stock Exchange moved over 1.50. (The Arms Index shows the relationship between the number of stocks that increase in price and those that decrease, and the volume associated with those stocks.) In each case, it was a clear and timely signal that the market was ready to move higher. The occasions that it has given such a reading are at the bottom of a big decline in 1970, the bottom of the bear market in late 1974, the decline of 1980, the low just before the secular bull market lasting 17 years got started in 1982, the panic bottom in October 1987 and the big drop in 1997. In most cases, it was within a few days of the exact low. At the close on March 21, this index (which some traders may still be calling the TRIN) went to 1.61. Dick Arms in TSCM
Note: Neat stats if I could have seen the historical data charts. It is tracked on briefing.com

i2 Technologies (ITWO) Up 6.47% : Company warns Q1 (Mar) will be approximately $0.02 per share, current First Call estimate is $0.06; expects to report license and total revenues of approximately $210 million and $355 million respectively; cites current economic environment and the associated decrease in revenue visibility;
Note: Apparently the news is not as bad.

Manufacturing activity contracted for an eighth-straight month in March, though slightly less than expected, and price pressures decelerated sharply, according to a survey of U.S. purchasing managers. The NAPM index of manufacturing activity, which provides an early reading of economic conditions in the previous month, rose 1.2 points to 43.1 in March. "The overall picture is one of continued decline in manufacturing activity during the month of March," said Norbert J. Ore, the chairman of NAPM's business survey committee. "The manufacturing sector is in its eighth month of decline and appears to lack drivers sufficient to stimulate recovery."
Note: Mr. Ore said it all.

Dynegy (DYN) Company issues upside preannouncement for Q1 and expects earnings of about $0.40 vs current EPS estimate of $0.31; also lifts FY01 forecast to $1.92-$1.97 from current range of $1.80-$1.87;
Note: Tough to chase this in the weak season.

Applied Micro Circuits (AMCC) The Sunday's editions of The New York Times reported that CEO David Rickey sold 800,000 shares of AMCC stock, roughly 90 percent of his holdings, between July 2000 and March 2 of this year. The article juxtaposed those sales, which were disclosed in filings with the Securities and Exchange Commission, with Rickey's comments on financial news cable channel CNBC on March 2 when he dared investors not to own the stock. Applied Micro Circuits wasn't immediately available for comment. The New York Times said Rickey has sold more than 99 percent of his holdings in the San Diego, Calif., communications chip firm since 1999, making $170 million in the process.
Note: I was thinking selling this at $25 was a mistake. Now at $14.

Ariba (ARBA) Company warns; sees a significant loss from operations of approx. $0.20 a share, vs profit of $0.05 expected by analysts; puts revenues at approx. $90 mln (mean $175.2 mln). Company says experienced a large unexpected drop-off in our sales closure at the end of the qtr; notes that impact was primarily in N. America, but is beginning to be felt in Europe as well... ARBA responding to downturn in business by reducing workforce by about 700 employees or one-third
Note: Tech news keeps on depressin’

President Bush issued a strong statement to the Chinese on Monday, demanding a "prompt and safe return" of 24 military crewmen and a U.S. Navy electronic surveillance plane that made an emergency landing in China on Sunday morning after colliding with a Chinese F-8 fighter jet that had been dispatched to intercept it.
Note: Talk is cheap. Haven’t seen if we were over their territorial waters.

New Focus (NUFO) Company reaffirms Q1 revenue guidance of $38-41 mln and announced the departure of Paul G. Smith, VP and general manager for a portion of the company's telecom business.
Note: Never good to have management fleeing a company ina downtrend.

In a filing with the Securities and Exchange Commission this afternoon, Warren Buffett's Berkshire Hathaway (BRK.A:NYSE)disclosed it owns 8 million shares or 0.9% of the Gap (GPS:NYSE) and 4.9 million, or about a 4% stake, in GPU Inc. (GPU:NYSE), an electric utility in the NE United States. Buffett's investment in the Gap amounts to approximately $204 million and his GPU stake is about $181 million.
Note: Buffet bought Ann Taylor and others last year. The utility investment is interesting.

Redback Ntwrks (RBAK) Company warns for Q1; expects revenues to be approx. $85-$90 mln (mean $133.4 mln); plans to reduce workforce by 150 people, or about 12%
Note: Hit after hit.

I've heard of "sell on the news," but this is re-dick! Intersil, which is one of our largest positions, and to which we added pre-opening, is getting clobbered. Should be a moment of defining triumph. Microsoft is abandoning BlueTooth and HomeRF, and embracing 802.11 as the anointed survivor in wireless networking standards. Intersil is the purest play in the space. It should be on fire, but instead it's burning down. Tough game, huh? Don Luskin on TSCM
Note: Wi-lan is the pure play in the area.

Inktomi (INKT) : Company warns for Q2; sees a loss excluding items of $0.23 to $0.25 per share vs the First Call consensus of ($0.04); sees Q2 revenue between $36-$38 mln. Company also plans to cut roughly 25% of staff. Cites faster than expected decline in economic conditions in both the United States and Europe;
Note: Cheap from 52wk high. But can it survuve?

Internet security solutions company Rainbow Technologies (RNBO) said it expect a loss of between 7 cents and 10 cents a share. Previously, the company anticipated a profit of 6 cents, while the three analysts polled by First Call expected a profit of 5 cents a share. The company cited lower sales, due to order delays.
Note: Waiting for SYMC and CHKP to warn next.

Entrust Tech (ENTU) : Company warns for Q1; sees loss in the range of $0.32 to $0.34 per share (vs estimate of $0.02 profit), on revenues of $31 to $32 mln. Cites a significant reduction in expected software license sales primarily attributable to the slowing U.S. economy;
Note: No surprise here.

The average price for a single terabyte of storage capacity -- enough to hold 20,000 music CDs -- has dropped 24% in the last three months to $100,000, according to Enterprise Storage Group, a Milford, Mass., research firm. That compares with a drop of just 12% in the prior quarter. Overall, prices for raw storage capacity have been halved in the last 15 months, but software and other attachments often add to the final cost of storage capacity. Tony Prigmore, an analyst with the firm, attributes the accelerated decline to "more diligence and negotiating" by customers.
Note: Lower margins, tough climate.

BroadVision (BVSN) : Company warns for Q1; sees revenue between $85 and $90 mln and basic pro-forma loss per share, pending review of non-recurring items, will be in the range of $0.14 to $0.16 vs First Call mean estimate of $0.02 profit. Company to cut approximately 325 people, or 15% of the Companys workforce;
Note: Death rattle is occurring
Quote of the Day

Inevitably, this selling will one day abate and normalcy will return to our noble profession. When that occurs, you can be sure that the hibernating bulls will climb out of their cardboard boxes to proclaim that, in hindsight, it was obvious, that we should have known. That they knew. Todd Harrison on TSCM
Note: Someday, yep.

Summary

Another grinding day. Sell into rallies still the theme. Waiting for April 15 to pss by to buy.

Jack

[jackhartmann]

Thanks V!

Jack

[VirginiaRD]

jackhartmann

Great info. Keep'em coming.

V

[jackhartmann]

Portfolio down 0.0%, Dow up 0.81%, Nasdaq up 1.08%, S&P500 up 1.08% J-Blimps up 1.1%, Fuel cells/Alt Energy up 3.9%, Gorilla Hunters up 1.9%, Gilder2001 up 0.4%, OC-192 down 0.7%.

NYSE Volume: 1.27 bln...Adv: 2097...Dec: 957 day 1
Up Volume 948.95 Down Volume 496.02 day 1
New Highs 108 New Lows 56 day 1

Nasdaq Volume: 2.1 bln...Adv: 2342...Dec: 1395
Up Volume 1189.98 Down Volume 845.58
New Highs 134 New Lows 279 Huge 15 days

Put/Call ratio 0.75 (Range 0.70 to 0.84)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

May natural gas $5.05 per million British thermal units. Down 24 cent.

VIX 33.82 down
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
DOT ($DOT) 224.20 +11.10 +5.21%

Collapse of the day
Semis ($SOX) 545.04 -24.96 -4.38% Micron Tech (MU) down 8.22% DRAM chip maker reported a Q2 loss of $0.01 a share, 2 cents narrower than Wall Street views. Revenues fell 8.1% to $1.07 bln... ABN AMRO reiterating BUY rating on stock this morning; believes pricing could be up significantly in the 2nd-half vs depressed level of Q1; comforted to note that only MU and IFX are increasing their DRAM capital investment in CY01.
Note: rebounded from day’s low.

QQQ at $39 Chart: up on lower volume Blocks: 484/483 pos for 1 day. Volume%: 51

One stock

IBP, Inc (IBP) down 28.04% After the close, Tyson Foods (TSN) announced that it has called off the merger with IBP based on concerns regarding IBP's financial statements. Tyson says it was inappropriately induced to enter into the merger agreement and claims a right to rescind or terminate the merger agreement and to receive compensation from IBP. Tyson has begun legal proceedings seeking relief. Meat packer IBP sues Tyson to force $3.2 billion acquisition to go forward.
Note: When it settles down, it might be worth a look.

Portfolio Watch

Brocade Comms (BRCD) In an intraday call, AG Edwards reiterates ACCUMULATE on the manufacturer of switches for computer data storage systems; firm lowers estimates for FY01 to $0.51 from $0.56 and for FY02 to $0.72 from $0.79; cites lower estimates on EMC, lower guidance at Compaq (CPQ) and evidence of high order pushouts to Finisar (FNSR).
Note: Not a big drop in EPS.

Watch List things to watch but not trade

RealNetworks (RNWK) up 10.78% WSJ report that company negotiating a licensing agreement with 3 major record companies.
Note: Maybe the solution to MP3 problems.

How's this for pork barrel politics: there's a bill running through the House of Reps currently that would give a $1000 credit for purchasers of fuel cells for residential stationary power generation. Here's the instant message from my power analyst, JK Lunde: "Obviously makes it more competitive for fuel cells vs. microturbines and solar panels, but it's so targeted that it really only benefits three companies, and one of those is private. Plug Power (PLUG:Nasdaq), H Power (HPOW:Nasdaq), and Nuvera (private) all stand to get a significant boost If this were to pass. Not only would it ratchet down the cost of these systems by almost 1/3, it totally ignores the fact that the same credit applied to other technologies like microturbines would essentially make the units free. Government efficiency at its best." Dave Nadig on TSCM
Note: To buy on a hope that a congressional bill will get through is foolish.

EMC Corp (EMC) Up 1.38% Thomas Weisel Partners says channel checks suggest EMC will not make their current quarter. Firm cuts Q1 estimates to $2.3 bln revenues and $0.19 EPS from $2.5 bln and $0.21 (consensus EPS is $0.21). FY01 revenue estimate cut from $12.0 bln to $11.4 bln, EPS from $1.02 to $0.93; FY02 revenue estimate from $15.7 bln to $14.9 bln, EPS from $1.33 to $1.25.
Note: I think no one surprised at storage problems in this haze.

The only real winners in this market’s first quarter were the funds that bet against it. Bear funds, mutual funds that short the market, were up 34 percent as a group
Note: Strong performance. Now people will chase it down too late.

Micron (MU) Lehman's Dan Niles weighing on stock; he notes sharp increase in days of inventories to 120 days in Feb from 90 in Nov, saying that this "shocked" people given last week's comments from MU on inventory. He notes that many of the low inventory figures cited recently by MU and many foreign companies included only finished goods and are understated; instead of the 2-3 weeks of inventory cited by many, he believes that inventories are closer to 6-10 weeks when work-in-progress and raw materials are included. He also notes that the recent firming in DRAM pricing has reversed in the past 2 days.
Note: Took SOX down

ARTT filed for Chapter 11 protection this morning.
Note: No cash, so just ran out of money.

According to Thomson Financial/First Call, for 2002, S&P 500 companies are expected to earn $63.22. That works out at 12% earnings growth in the two years to the end of 2002, or an average of 6% a year. The price-to-earnings ratio is 20 using the 2001 forecast earnings, and 18 for the 2002. Those P/Es are about three times the expected growth rate of 6%.
Note: Still high for a collapse.

Justin Lahart of TSCM Strange thing about this is that the auto makers – the major force in U.S. manufacturing and an even more major force in the Chicago PMI's survey area -- have been improving lately. Also at odds with the Philly survey. All very strange. Certainly brings Monday's NAPM report front and center. Makes people less happy adding new positions going into the weekend, and puts another wrinkle on all the end-of-quarter stuff going on today
Note: I think the overall trend in the nation is down.

Quote of the Day

"Markets do tend to overshoot in both directions," said Don Cassidy, a Lipper senior research analyst. "But who's going to be anxious to buy them? People have lost a lot of money on these stocks."
Note: If they have no money, how can people play.

Summary

Stocks rose on the last day of three-month period that saw $1.8 trillion in equity wealth wiped out per cbsmarketwatch.

Every sector underperformed unless you were short.

WFII was gapped down as if the death was near. Should fill the gap.

Jack

[jackhartmann]

Portfolio down 3.3%, Dow up 0.14%, Nasdaq down 1.81%, S&P500 down 0.46% J-Blimps down 4.7%, Fuel cells/Alt Energy down 0.4%, Gorilla Hunters down 4.2%, Gilder2001 down 3.6%, OC-192 down 7.6%.

NYSE Volume: 1.24 bln...Adv: 1489...Dec: 1559
Up Volume 562.69 Down Volume 657.40
New Highs 70 New Lows 66

Nasdaq Volume: 2.07 bln...Adv: 1470...Dec: 2142
Up Volume 463.61 Down Volume 1566.06 day 2
New Highs 44 New Lows 262 Huge 14 days

Put/Call ratio 0.86 (Range 0.58 to 0.86)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.38 per million British thermal units. Down 23 cent.

VIX 33.99 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Hospitals ($RXH) 284.15 +10.39 +3.80%

Collapse of the day
Network ($NWX) 404.95 -18.96 -4.47% NT still a stinging

QQQ at $39 Chart: descending slowly Blocks: 483/518 neg for 2 day. Volume%: 50

One stock

SafeNet (SFNT) down 61.61%: Warns that Q1 revenue and earnings will be lower than previously communicated. Attributes revenue shortfall to order cancellations and reduced expectations from OEM accounts in the networking industry.
Note: Second security stock to warn. Now CHKP and SYMC are the ones to watch for warnings.

Portfolio Watch

MDT, PHA, DCI, BGP were green.

NTAP and BRCD down 12% on JNIC news.

Brocade Comms (BRCD) Merrill Lynch on BRCD: Firms says near term situation remains tough; odds of a preannouncement continue to rise. February was very weak, March was improved, but lumpy; last week in March will be key since it is when the OEMs end their quarters. Longer term, company's strategic position is stronger than ever. Software will be the key differentiator in network storage; Brocade will be a leader here, and the size of the potential market remains underestimated.
Note: The news of the warning is priced in.

NEW YORK, March 29 (Reuters) - Unocal Corp (NYSE:UCL - news) said Thursday it will offer U.S. oil companies a licensing fee on its special blends of anti-smog gasoline of between 1.2 cents per gallon and 3.4 cents per gallon -- but only to refiners that have not challenged the controversial patents in court. Unocal added that the offer does not extend to Exxon Mobil (NYSE:XOM - news), Texaco Inc (NYSE:TX - news), Chevron Corp (NYSE:CHV - news), Royal Dutch/Shell (quote from Yahoo! UK & Ireland: SHEL.L), or Arco, now part of BP Amoco (quote from Yahoo! UK & Ireland: BP.L)-- companies which challenged Unocal's gasoline patents in court.
Note: UCL has to be careful that reformulated gas is just allowed to be thrown out.

Watch List things to watch but not trade

JNI Corp (JNIC) 17.47%: After the close, supplier of Fibre Channel host bus adapters to the storage market warned that Q1 EPS would post between $0.03 and $0.04 vs $0.14 mean estimate. Company blamed shortfall on continued weakness in the Sun Microsystems (SUNW) server marketplace.
Note: Took all the storage stocks down with it.

I see the Consensus reports only 10% bulls this week. That's very low. The
lowest in the 1990s was 12% bulls reported in the summer of 1994. Put this
one squarely in the bull camp. What was the lowest reported in modern times?
On May 20th of 1998 the Consensus found 3% bulls -- which was a great buy
point. Imagine that. Good article on the sentiment surveys in today's
Investor's Business Daily. Jay Shartis of TSCM
Note: Kinda of odd May 20th was 3% bulls. I though August 1998 was bad.

Calpine (CPN) Expects 2001 results to exceed forecasts. Puts full yr EPS at $1.80 vs previous estimates of $1.50; sees Q1 earnings of $0.20-$0.25 (mean $0.13).
Note: Will decide after April 15 to buy an utility.

U.S. economic growth slowed to its weakest pace in more than five years in the fourth quarter, with GDP rising just 1%. Corporate profits fell 4.3%, the largest decline since the first quarter of 1998.
Note: Still a positive GDP.

Delta Air Lines (DAL) Air Line Pilots Association (ALPA) announced it was declining arbitration proffered by the National Mediation Board (NMB) last week. In response to decision, DAL says it is prepared to resume negotiations and reach agreement as soon as possible. Company notes that Pres. Bush has stated his intention to take the necessary steps to prevent airline strikes this year.
Note: Sector is one big mess.



Delphi Auto (DPH) Announces global restructuring that will eliminate 11,500 positions and that will result in a charge of $450 mln against 2001 earnings. DPH also warning that weaker than expected vehicle manufacturer orders and soft U.S. aftermarket sales will result in Q1 results ranging from a net loss of $50 mln to breakeven. Company was expected to post a profit of $0.17 per share for the qtr.
Note: Confirms the problems in the auto sector. I think people bid up the stocks figuring the rate cut will help.

Schaumburg, Illinois, March 29 (Bloomberg) -- Motorola Inc. said the U.S. Securities and Exchange Commission has opened an informal inquiry into discussions earlier this month between officials with the No. 2 mobile-phone maker and some analysts. Such talks could be ruled to have violated SEC rules requiring that companies release market-sensitive information to the public before or at the same time that they give it to Wall Street professionals. The Schaumburg, Illinois-based company is ``cooperating fully, and we don't believe there has been a violation'' of the rule, said Scott Wyman, a Motorola spokesman.
Note: All eyes on the SEC.

Ingersoll-Rand (IR) : Revises Q1 forecast to $0.50-$0.52 from management's previous range of $0.60-$0.65. Mean estimate for the qtr is $0.62. Each of company's major end markets in N. America deteriorated during March.
Note: CAT probably will follow the same pattern.

Stock funds were in net outflows to the tune of $21.6 billion in the first two weeks of this month, according to liquidity tracker TrimTabs.com.
Note: So much on the side, it hard to tell what will move it first.

Calif. Amplifier (CAMP) Even. Announced that during preparation for its fiscal 2001 audit examination, the company's corporate controller abruptly resigned and advised by letter that in fiscal year 2000 he made certain adjustments to accounting records that caused a reduction in recorded expenses which may have resulted in overstating net income for the fiscal yr by as much as $2.2 mln or $0.18 per basic share.
Note: Uh-oh. Bad news and the stock was flat, Odd.

Intl Paper (IP) down 3.03% Guides down Q1 earnings to the $0.05 area vs $0.16 mean estimate; says the economic downturn, high energy costs and continued strong U.S. dollar are curtailing exports and fostering imports.
Note: Big drop and drops a dollar

Ford Motor (F) In 8-K filing with the SEC, company's CEO reiterates comfort with Q1 mean of $0.54; company is not expressing any comfort level with such estimate for Ford for full-year 2001 of $2.55 per diluted share;
Note: Demand will build as time goes on, but short term next 3-6 months may be rough.

EMC Corp (EMC) Merrill Lynch makes positive comments this afternoon and says EMC is becoming more aggressive on hardware pricing while seeing more competition from Hitachi Data Systems; ultimately, when hardware prices are reduced, more units are sold leading to a larger installed base which grows faster and more software is sold; however firm does not think that EMC will get the help on gross margins this quarter that it has in the past from component price decreases; thinks demand outlook will be key.
Note: The news doesn’t look so good.

Wireless Facilities (WFII): Company warns for Q1; expects its revenues and earnings to decline from previously estimated levels due to the slowing U.S. economy, the recent volatility in the financial markets and the slowdown in wireless telecommunications infrastructure spending. Company fails to provide any further guidance other than to say, "Company is therefore unable to re-affirm any prior revenue and earnings estimates for fiscal 2001 and does not expect to provide revenue and earnings estimates at least until market conditions stabilize and visibility improves.";
Note: A warning out of the PMCS handbook.

Micron Tech (MU) 45.25 +1.00: Reports Q2 loss of $0.01 a share, $0.02 better than the First Call consensus of ($0.03), vs year-ago earnings of $0.30; revenues fell 8.1% to $1.07 bln from a year-ago of $1.16 bln; On conference call, company said it has seen a pick-up in pricing over the past couple of weeks, but not sure if sustainable...separately, much of Q&A focusing on large inventory build-up which is up from Aug 31 by 66% -- mgmt does not seem concerned even though the trend is continuing in March
Note: Inventory buildup is death to a tech now.

Foundry Networks (FDRY) In 10-K filing, company discloses: "We...continue to receive a lower than anticipated amount of product orders for the first quarter of 2001 as a result of decreased or delayed capital spending by existing and prospective customers and the slowing U.S. economy. Due to a number of factors which are discussed in more detail below, we expect our selling prices and gross margins to decrease as a result of our increased efforts to compete aggressively and maintain sales levels.
Note: Selling in the single digits, but still no visibility.

Quote of the Day

“Most tech stocks are very dangerous right now. Companies are scrambling to meet earnings projections in the last days of the quarter. What is hurting tech even more is the inability to offer guidance. Many of these companies have no idea what to expect in the months to come. That leaves very little opportunity for techs to have any sustainable rallies," commented Louis Navellier of the Navellier Performance Funds.
Note: Inability to offer guidance hurts stocks. Say it ain’t so.

Summary

Met with a Chicagoland construction association for the summer picture.
Looking bleak. Strong spring, weak summer. everyone delaying building
projects. Industry becoming a bunch of piranhas fighting for maintenance
contracts as backlog chewed though. The implication for a Lowes, Home Depot
is clear as they will see a rise and then a fall. Also USG, and building
components will be affected too. Best to pull out a chart of stocks in that
time frame to get One contact said worse summer since 1993-1994. Felt a rate
cut won't even help.

Visited with a precast plant making hollow core precast panels for floors. The municipal government projects like jails and schools still getting built but seeing the slowdown in the commercial construction sector. Recently let the second shift go due to inventory buildup.

Perhaps we are seeing end of quarter window dressing with funds dumping the losers.
Friday may be the time to nibble on the techs with a bounce.

Jack

[jackhartmann]

Portfolio down 3.3%, Dow down 1.63%, Nasdaq down 5.99%, S&P500 down 2.44% J-Blimps down 6.7%, Fuel cells/Alt Energy down 4.2%, Gorilla Hunters down 10.0%, Gilder2001 down 8.7%, OC-192 down 12.6%.

Record Nasdaq days on the downside
10/19/87 -11.35 %
04/12/00 -9.67
10/20/87 -9.00
10/26/87 -9.00
08/31/98 -8.56
04/03/00 -7.64
01/02/01 – 7.23% Funds lock in profits, Robbie Stephens downgrades EMC, INKT, NTAP, many others. NAPM Index at 43.7% (consensus was 47.1%), the lowest since April 1991 and indicative of a continued contraction in the mfg. sector
12/20/00 – 7.12% FDRY takes down infrastructures with the warning.
04/13/00 -7.02
10/27/97 -7.02
03/12/01 – 6.30% CSCO warns prior period, Barron’s pummeling fiber optics stocks, ERICY warns.
01/05/01 – 6.20% BAC rumors of bad shortfall due to CA utilities and CSCO rumors of missing quarter sent it down.
03/27/80 -6.15
03/28/01 – NT and PALM warn the night before sending networkers down double digits.
05/23/00- 5.93%

NYSE Volume: 1,302 mln...Adv: 1083...Dec: 1977
Up Volume 411.95 Down Volume 874.03 day 1
New Highs 62 New Lows 46

Nasdaq Volume: 2,056 mln...Adv: 1100...Dec: 2608
Up Volume 143.67 Down Volume 1883.07
New Highs 36 New Lows 192 13 days of 2/1

Put/Call ratio 0.82 (Range 0.75 to 0.85)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.61 per million British thermal units. Down a penny.

VIX 33.22 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Drugs ($DRG) 380.86 +2.81 +0.74%

Collapse of the day
Network ($NWX) 423.91 -56.08 -11.68% NT hit so hard.

QQQ at $39 Chart: Down on higher volume Blocks: 636/886 neg for 1 day. Volume%: 70

One stock

Nortel Networks (NT) down 16.47%: Merrill Lynch downgrades to NEAR TERM NEUTRAL from NEAR TERM ACCUMULATE after company negatively pre-released 1Q01 again yesterday citing reduced capital spending and increased pricing pressure; firm lowers Q1 forecasts from EPS loss of ($0.04) to ($0.12) and revenue from $6.3 bln to $6.1 bln; firm now believes Nortel's annual revenue in 2001 may be below 2000 and gross margins will remain under pressure.
Note: It can always get worse.

Portfolio Watch

MDT, PHA, CAT, DRMD were green. BRCD, GLW, NTAP were down double digits.

Brocade Comms (BRCD) This afternoon, Merrill Lynch reiterates NT BUY/LT BUY as firm is meeting with management; near-term reports that visibility is not good, however firm remains bullish on longer-term prospects for two reasons: 1) software will be very important in storage networking and analyst thinks BRCD can be a leader in this area and 2) the market size is much larger than people appreciate
Note: So much for Reg D.

Caterpillar stock rose more than 40% over the last five months without attracting much attention. Its core heavy-machinery business, while not exciting, offers investors a chance to play a U.S. economic recovery. Expansion efforts overseas and the power-generation division offer exposure to attractive long-term growth markets. The stock has a history of outperforming the market following recessions and gained 250% between 1991 and the end of the 1994 slowdown. While there is no hurry to take positions, the stock is being upgraded to "accumulate." For investors looking out two to three years, a pullback to the $33-$37 range would represent an opportunity. During the last year, Caterpillar has improved market share in the domestic truck-engine business. And in early March, Cat announced a new product designed to help truck engines meet stricter emissions standards and lower operating costs. The company says the device will also reduce engine noise by up to 50%. The nation’s electricity shortage is good news for Caterpillar’s power-generation unit. Electric-power sales represented 33% of engine revenue last year, and that sector should generate much of Cat’s future growth.
From Dow theory Forecasts.


Watch List things to watch but not trade

Arch Coal (ACI) Coal producer expects Q1 (Mar) earnings of $0.10-0.15 per share, current First Call estimate is $0.04; results are expected to benefit from high profit margins on a small volume of coal sold in the spot market and income tax benefits related to depletion; Arch Coal (ACI) 27.90: Coal producer expects Q1 (Mar) earnings of $0.10-0.15 per share, current First Call estimate is $0.04; results are expected to benefit from high profit margins on a small volume of coal sold in the spot market and income tax benefits related to depletion;
It will be interesting to see USX’x coal numbers to lagging steel production.
What I like are hard facts, like the insight I received yesterday from the gentleman running the hedge fund out of Banc America Prime Brokerage. He told me that his back office people at Bank America, who see a slew of hedge funds, calculated that the short interest -- the sheer number of shorts -- was the highest they had ever seen on Wednesday. That's great information I can use. Or consider this, another piece of data that someone from one of these high-net-worth departments like I worked in at Goldman Sachs told me: "On Thursday a series of very wealthy clients told me they could not take it anymore and five or six of them bailed from some of the biggest highflying Nasdaq stocks. It was true capitulation the likes of which I have never seen before." http://www.thestreet.com/p/rmoney/jamesjcramer/1365192.html
Note: Cramer does have contracts. Sounds like some sign that too much bearishness is there.
The recent run-up in crude-oil prices suffered a severe reversal after the Department of Energy reported a sharp increase in U.S. crude inventories. Inventories had fallen to their lowest levels in a quarter century in early March, but a three-week-long surge in imports has lifted them by nearly 27 million barrels, or 10%. May crude-oil futures on the New York Mercantile Exchange tumbled $1.44 to close at $26.31 a barrel.
Note: Inventory like one big yoyo.
"We're letting more air out. Big-cap tech stocks are obviously not ready to turn around yet. Nortel's announcement is very disturbing and is having very severe effects on the rest of the market," observed Donald Selkin, chief strategist at Joseph Gunnar.
Note: Selling into rallies will become a nauseating theme for a while.

Lucent Technologies (LU: news, msgs, alerts) shaved 12.2 percent. Late in the session, rating agency S&P placed Lucent on CreditWatch with negative implications. The action, S&P said, reflects lower-than-expected proceeds from the IPO of Agere Systems, with about 63 percent now owned by Lucent.
Note: I have watched LU thinking about an entry, but this is a serious negative.
Novatel Wireless warned late Wednesday that it would not meet analyst loss estimates for the first quarter due to a slowing economy. The developer of wireless modems and related software that provides anywhere access to the Internet said that it expects to lose 22 to 23 cents a share vs. an average loss of 14 cents a share expected by three analysts polled by First Call/Thomson Financial. The San Diego-based company also lowered revenue estimates to $18 to $20 million. Novatel (NVTL) did say it expects to break even in the fourth quarter of the year through an "aggressive" cost reduction program that should save the company in excess of $6 million a year.
Note: Haven’t followed it, but wireless is picking up for certain companies like those with LU relationships..

Whirlpool (WHR) said it remained "confident" that it would report first-quarter earnings in the "high end" of expectations. Analysts currently expect the appliance maker to report EPS of $1 to 90 cents, with an average of 96 cents, according to First Call/Thomson Financial survey of 9 analysts. "Given the challenges, we are pleased with our execution of the company's initiatives," said David Whitwam, the company's chairman and chief executive.
Note: First good news out of the durable goods sector after Maytag warned this week.

GX has 433K of shares getting dumped by insiders per form 4s filed since 3/23/01
Note: Always fun when the insiders want to diversify their holdings.

Japanese industrial production in February rose less than companies expected, missing forecasts for the eighth month, as businesses from Sanyo Electric Co. to NEC Corp. slow assembly lines in response to a slide in export orders. Factory and mining production rose 0.4 percent, seasonally adjusted, last month, after falling a record 4.2 percent in January, the Ministry of Economy, Trade and Industry said. From a year ago, output fell 2.1 percent, the first drop in 21 months.
Note: The yen is weak to the dollar so exports should have been better.

"We believe that (the quarter ending in) June will be worse than March in terms of revenue declines for the entire communications components industry," wrote Lehman Brothers analyst Arnab Chands. "We are hard pressed to find safe havens at this point."
Note: No safe tech havens until April 15 has passed.
According to TheStreet.com, short interest in March increased over 160 million shares to 3.6 billion. I am also noting lately an unusually large number of emails asking about shorting. Contemplating the movement in the Nasdaq from one extreme to another, it occurs to me that Joe Investor is often late. Many were entering enthusiastically still at Nasdaq 5000. Now, with such an extreme move downward, many are looking back in hindsight, thinking "if I had only been short". If Joe Investor is now jumping on the short band wagon this late in the game, I am wondering if he won't be run over again on the way back up. Ken Wolff of TSCM
Note: Short near my 1500 target? The risk reward is not there despite poor visibility.

A poll conducted by Reuters queried 13 Wall Street strategists who concluded that by year-end the S&P 500 will rise 40%, the Dow will be up 33% and the Nasdaq up 80%. Jay Shartis of TSCM
Note: Someone spiked the Kool-aid over on Wall Street. Wishful thinking at its best.

I wonder how much malice was in Nortel's timing of their preannouncement. In the midst of a smart rebound, and a day before their biggest competitor's IPO -- an IPO Lucent desperately needs for cash -- NT lowers their expectations for the quarter. Since they have to preannounce, why not time it for maximum advantage? Barry Rizholtx of TSCM.
Note: NT is sucking air and they wouldn’t be in this position if they didn’t order so much. To say they planned this gives an incompetent management credit for a flash of brilliance. I don’t buy this apple.
Quote of the Day

HOWEVER, stocks bottom well before there is ANY visibility regarding an improved fundamental outlook. This is especially true given the backdrop of such a large decline - especially on the NASDAQ. Consider a year to fifteen months ago when everything was just fine. Stocks began to slip well in advance of any evidence of a fundamental deterioration. The market is the final arbiter, and time after time is an accurate discounter of future events. Sometimes evidence of stability of fundamentals, or substantially lower prices which sufficiently discounts poor fundamentals makes for a bottom. Nevertheless, the nice thing, as it relates to Technical analysis, is that the Technicals (developing price action) often are a KEY to a turn in the fundamentals. That is why I find good technicians to be worth their weight in GOLD.
Doug Kass on TSCM
Note: I disagree with the above post. Maybe true overall, but I got out of the biotechs in March because the fundamentals were going down. Also, LU warned in January 2000 and took a 30% hit. MOT warned in March 2000 and this was the sign that handsets were going to weaken. I just missed this signal.

Summary

Last time NT warned (in Feb 15), it went down 32% and started a four day Nasdaq slide. Might be best to miss a bottom opportunity than watch the trade sink.

I met with several contractors. Many are seeing let payments and they are concerned how the summer will shape up. The spring looks solid, but booking for the summer is behind last year pace in the Chicagoland area.

Visited a gray iron foundry. Laid off a shift due to slowing automotive business. They are seeing replacement truck parts start to pick up but felt too much trucks sitting in lots. They said the industry overbuilt and new truck orders may be three-six months out.

Jack

[jackhartmann]

Portfolio up 2.7%, Dow up 2.68%, Nasdaq up 2.80%, S&P500 up 2.56% J-Blimps down 1.0%, Fuel cells/Alt Energy up 2.8%, Gorilla Hunters up 3.3%, Gilder2001 up 1.2%, OC-192 down 0.0%.

NYSE Volume: 1.31 bln...Adv: 1932...Dec: 1118
Up Volume 979.22 Down Volume 321.94 day 2
New Highs 107 New Lows 31 Huge day 3

Nasdaq Volume: 1.93 bln...Adv: 2208...Dec: 1566
Up Volume 1355.80 Down Volume 522.74 day 1
New Highs 63 New Lows 129 12 days of days of 2/1

Put/Call ratio 0.68 (Range 0.48 to 0.68)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.62 per million British thermal units. Up 26 cents.

VIX 30.69 down
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch
Breakout of the day
Nasdaq 100 ($NDX) 1735.70 +58.80 +3.51% good strength, average volume.

Collapse of the day
Oil Services ($OSX) 121.84 -2.39 -1.92% American Petroleum Institute posted a 8.9 million-barrel rise in U.S. crude inventories as of the week ended March 23. Analysts, on average, predicted a 1 million- to 1.4 million-barrel drop, according to a Bridge News survey.

QQQ at $43 Chart: Up on low volume Blocks: 821/744 pos for 1 day. Volume%: 61

One stock

TranSwitch (TXCC) down 19.87%: Banc of America Sec downgrades to MKT PERFORM from BUY; yesterday TXCC announced that due to increased weakness in North American demand its revenues would decline 26% sequentially in Q1 to $38 mln from $51 mln; firm believes that poor broadbased North American and European visibility and slowing end market demand for broadband communications equipment will create an uphill battle for TXCC to reach its revised guidance for a flat June quarter.
Note: In trouble as the rest of the IC chip companies.

Portfolio Watch

Scholastic Corp (SCHL) up 4.98%: Announces that it has decided not to bid for selected eToys assets. On Monday, SCHL confirmed that it made a contingent bid for inventory at $0.30 on the dollar, or $8 mln, as part of the auction process in ETYS' bankruptcy proceedings. SCHL shares fell 16% in trading Monday.
Note: Eight million was really cheap, but who wants old toys.

Demand for fiber continues to outstrip Corning’s production capability. Recognize that this is the main reason that Corning appears to be looking at Lucent’s [LU] fiber business. Pricing is stable, but there is a shift to European and Asian customers from the high-growth North American market in 2000 . Corning did announce that it received a huge order for premium fiber from Charter Communications [CHTR: Nasdaq], the first such purchase by a cable company.
http://www.ideaadvisor.com/article/article.asp?aid=9947

Watch List things to watch but not trade

Corvis (CORV) Optical networking site Light Reading reporting that sources close to CORV have confirmed that the company will announce "at least two" new customers as early as the next few weeks. Corvis currently has only three customers (WCG, Q, BRW), all of which own stock in the company, making additional customer wins key
Note: Yawn. Let’s see the contract before getting excited.

After speaking to the 4 major German carriers at the European wireless conference at CeBIT, CIBC analyst believes that carriers will reduce their cell phone subsidies to preserve cash flow due to 3G licence spending; if this happens it dampens the growth of the strongest replacement marketplace in the world (Europe) and would put the low end of Nokia's (NOK) estimate of 450M -500M handsets at risk.
Note: The number sold for 2001 was once estimated to be 600M.

RealNetworks (RNWK) down 4.87% Inks 3-yr agreement with Major League Baseball to make RealNetworks the exclusive platform for a broad range of online services, including live audio webcasts of all MLB games.
Note: $10 for baseball games all season. Pay per listen is beginning and RNWK is pushing the envelope.

Ericsson (ERICY) has sold its remaining stake in Jupiter Networks (JNPR) that will result in a one-time gain of $536.9 million in the first quarter. According to an Ericsson statement, the cell phone maker "continues to work closely with Juniper Networks in offering carrier-class IP infrastructure products to the market."
Note: Think how much ERICY could had if they sold last summer.

Texas Instruments (TXN) Goldman Sachs initiates coverage with a RECOMM LIST rating and price target of $46; firm says TXN is arguably the major chipmaker most leveraged to the wireless communications market; says no segment of the electronics market is yet showing signs of recovery, but the wireless market, which "got sick first," has had nearly a year to recuperate and firm believes is likely to be the first to recover; believe that TXN stock is the most obvious semiconductor destination for money flow following any sign of cyclical recovery.
Note: TXN never went down 80% like the others.

JNI Corp (JNIC) Bear Stearns downgrades to NEUTRAL from ATTRACTIVE; cites weak Sun server market (accounts for 90% of JNIC revenues) and strategic challenges in terms of competition with other larger industry players. Firm reduces Q1 forecast to $0.06 from $0.10, 2001 to $0.40 from $0.80, and 2002 to $0.60 from $1.00
Note: I didn’t know SUNW was that high of JNIC revs.

Rejecting calls for price caps on wholesale electricity, President Bush said his administration "does not and will not support price controls." Bush said the energy problem will take time to solve. "We must have a strategy to keep the wheels running and the lights on," he said. A good public energy policy increases supply and encourages conservation, he said.
Note: Utilities are getting tempting as no CO2 rules and no price caps.

QUALCOMM (QCOM) Up 5.74% Wall St Journal online reporting that China Unicom (CHU) will spend 20 bln yuan, or $2.42 bln, to build out its CDMA network by 2002; in mid-February a CHU executive cited a figure of $1.8 bln.
Note: Always hearing the China card, Just be nice if the revenues materialized.

Cutting marginal tax rates is the best way to insure that America keeps its commanding lead as the top economy in the world, Treasury Secretary Paul O'Neill said Tuesday. O'Neill dismissed calls for an immediate tax rebate to stimulate the economy now, saying that only a permanent change in tax rates would change people's consumption habits.
President Bush said the American consumer needs tax relief immediately, if not yesterday. He said he strongly supports decreasing taxes retroactive to Jan. 1, 2001. But "America needs more than a pick-me-up," he said. Only long-term tax cuts will restore long-term prosperity. Bush said the people had elected him to "look for warnings of economic trouble ahead and to heed them and to act."
Note: Same team, different opinion.

IPSCO Inc. (IPS) down 3.38% Company warns Q1 (Mar) will be $0.10-0.14 per share, current First Call estimate is $0.22; believes unfavorable conditions for the North American steel industry have become as bad as they will get in this cycle
Note: Only 9900 shares traded.


Mr. Buffett said he would start buying shares again "when businesses sell for less in the market than they're worth." On Tuesday Mr. Buffett reiterated his aversion to tech stocks, saying he hasn't bought any shares in the sector despite the Nasdaq Composite Index's plunge over the past year. He added, however, that it wasn't "inconceivable" for him to change his mind and invest in a telecommunications or dot-com stock. "I'd have to understand it, and it would have to be selling for less than it's worth. I don't see either of those things happening, but I don't rule anything out," he said.
Note: How can he not understand a MSFT or INTC. Even my nontech mother understands those two companies.

Sun Microsystems (SUNW) Sun's VP/Treasurer, George Reyes, at SG Cowen's Global Tech Conference, reports that visibility is extremely limited; literally, "week-to-week", says Europe and Asia/Pacific are so far so good; analyst maintains NEUTRAL rating, has enormous respect for management's focus and execution prowess, but sees no hurry to buy stock at current levels.
Note: We are still weak in NA otherwords.

The level of short sales not yet closed out, known as short interest, rose 4.8% to a record 3,608,599,871 shares in the month through March 12, up from 3,444,789,352 shares in February and topping the previous high hit in December. The figures include Nasdaq small- and large-capitalization stocks and reflect transactions through March 15, allowing extra days to complete settlement.
Note: We are at an inflection where the shorts continue to press their bets and the longs have run into money markets.

Palm Inc (PALM) Reports Q3 earnings of $0.02 a share, $0.01 better than the First Call consensus of $0.01, vs year-ago earnings of $0.03; revenues rose 72.9% to $470.85 mln from a year-ago of $272.29 mln. Company warns for Q4; sees revenues in the range of $300 to $315 mln (vs est. of $584 mln) and loss of $0.08 per share (vs est. of $0.03 net);
Note: Ouch. Good thing we are out. Wife’s expensive toy idea was right.

Sanyo Electric Co., which makes two-fifths of mobile phone batteries worldwide, said it will cut 6,000 jobs to trim costs as earnings may fall in the next six months on slower demand for mobile phones and personal computers.
Note: 40% of the battery market is a stat I had not seen before.

Nortel Networks (NT) Company warns for Q1; sees per share loss of $0.10-0.12 and revenues of about $6.1-6.2 bln; below the Company's previous estimates of $6.3 bln of revenue and loss per share from operations of $0.04 provided on February 15, 2001. Consensus Q1 EPS estimate is ($0.03) and revenue est. is $6.323 bln. Company is planning further headcount reductions and now expects an aggregate net reduction, by mid year 2001, of approximately 15,000 employees; "We continue to feel the impact of the economic downturn in the United States and are now seeing customers globally assess its effect on their businesses," said John Roth, Nortel's chief executive.
Note: JDSU will be next to warn.

Turkey's economy minister Kemal Dervis admits the nation needs $10-12 billion more foreign aid to lift the nation out of a financial crisis.
Note: Knock, knock. Show me the money. Watch this in the corner of your eye.

Quote of the Day

Thomas Galvin, chief investment officer at Credit Suisse First Boston, believes they are.

"We've really run the gamut of bad news and I think people have grown tired of it," "There's no question that this market has to learn how to walk before it can run again," Thomas Galvin, chief investment officer at Credit Suisse First Boston
Note: Cliches are everywhere.

Summary

A lazy day watching the market trickle up. Next week is RFMD and MOT and the real bad news will start.

Jack

[jackhartmann]

Portfolio down 2.6%, Dow up 1.92%, Nasdaq down 0.53%, S&P500 up 1.13% J-Blimps down 2.6%, Fuel cells/Alt Energy up 1.8%, Gorilla Hunters down 3.8%, Gilder2001 down 0.1%, OC-192 down 2.6%.

NYSE Volume: 1,1 mln...Adv: 1995...Dec: 1077 day 2
Up Volume 818.78 Down Volume 289.78 Huge day 1
New Highs 72 New Lows 27 Huge day 2

Nasdaq Volume: 1.7 mln...Adv: 2003...Dec: 1634
Up Volume 655.21 Down Volume 994.80
New Highs 46 New Lows 89 11 days of 2/1

Put/Call ratio 0.58 (Range 0.49 to 0.59)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.33 per million British thermal units. Up 6 cents.

VIX 33.18 down
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch

Breakout of the day
Dow Utils ($UTIL) 367.42 +15.94 +4.54% California proposed raising utilities bills 30%.

Collapse of the day
Hardware ($HWI) 217.14 -12.26 -5.34% CSCO hits hard.

QQQ at $41 Chart: Down on very low volume Blocks: 517/574 neg for 2 day. Volume%: 59

One stock

Cisco Systems (CSCO) down 4.35% In an interview with the Financial Times, CEO, John Chambers, noted that the U.S. economic downturn would continue for a least three quarters and that there were signs of it spreading. Chambers said the company had seen the issues expand to the Asia-Pacific region and that it saw early signs in Europe. UBS PaineWebber reduces FY01 est. to $0.49 from $0.57 and FY02 to $0.50 from $0.61. Firm now estimates that sales for the April qtr will be down sequentially 20% (vs -12% est) and gross margin will decline to 52.5% (vs 56% est), resulting in EPS of $0.05 (current mean $0.14).
Note: Chambers spooked the entire sector of networkers

Portfolio Watch

Brocade Comms (BRCD) down 18.70%: Morgan Stanley Dean Witter downgrades from OUTPERFORM to NEUTRAL and cuts estimates: FY01 EPS now $0.47 (revenue: $600 mln), from EPS of $0.55 (revenue: $700 mln); FY02 EPS now $0.64 (revenue: $785 mln), from EPS of $0.78 (revenue: $980 mln). Says channel checks reveal further weakness and the risk reward characteristics for the stock have turned unfavorable.
Note: Momo hedge funds bailed fast. Most trades at retail so funds holding.

Scholastic Corp (SCHL) down 13.67%: Deutsche Banc Alex. Brown downgrades from STRONG BUY to BUY based on very difficult near-term earnings comparisons. Following two years of nearly 40% annual EPS growth, comparisons will be challenging in FY02 (May year-end), particularly in light of the absence of a new release in the phenomenally successful Harry Potter series. Children's book publisher Scholastic announced that it has put the kibosh on its potential purchase of defunct Internet retailer eToys' assets. Before deciding against the acquisition, Scholastic, which publishes children's educational and entertainment books, made a contingent bid of 30 cents on the dollar for the eToys inventory, which would have valued the bid at about $8 million.
Note: I disagree with the assessment. The movie in the fall and a new book probably then mean SCHL will be higher then than now. Someone dumped 401K shares at bid toward end of day. $36 held for most of the day, but that block pushed it lower. Glad Etoys issue is dead. It didn’t fit into the business model.

Watch List things to watch but not trade

C-Cube Micro (CUBE) Agrees to be acquired by LSI Logic (LSI 20.69) Cube in a stock-for-stock transaction valued at approx. $878 mln. Based on the 0.79-to-1 exchange ratio, deal values CUBE at about $16.34 per share.
Note: LSI dropped 12%. One to watch for basing as deal looks good.

Trim Tabs reported that U.S. equity funds lost an estimated $3.6 billion during the three days ending March 22. The fund flow tracker defined liquidity as "horrible," indicating that equity funds had redemptions for a second straight week and for four out of the past five.
Note: This is a vicious cycle of redemptions forcing prices lower and bargain hunters trying to find the bottom.

Globix (GBIX) Up 12.50% Chairman/CEO Marc H. Bell exercises options to purchase 55,600 shares of Globix stock and has also purchased $10 mln of the company's 12.5% Senior Notes on the open market. "I am confident in the future success of Globix and in our ability to execute on our business plan."
Note: A new tech buying stock. Novel idea.

Jeffrey Applegate, chief investment strategist at Lehman Brothers, acknowledged his year-end price target of 1600 for the S&P is "silly," and thus lowered it to 1400. "Regrettably, we have been bullish and wrong" for the past year (plus), he added.
Note: No penalty for wrong predictions. Just like Jeane Dixon in the National Enquirer.

Vyyo (VYYO) down 40.77%: Warns that Q1 revenues will be significantly lower than its previous expectations due to significantly reduced orders from system integrators and inability of customers to obtain adequate financing.
Note: Interesting that obtaining financing is still a problem.

A survey of loan officers showed banks continued to tighten credit standards, a finding that could motivate the Fed to further ease interest rates. From wsj.com
Note: Hmmm. This match well. Those with a lot of debt like telcos could have trouble.

Inktomi (INKT) up 0.44%: Banc of America Sec. lowering FY01 est. to ($0.13) from ($0.02) and FY02 to $0.16 from from $0.29. Maintains BUY rating but lowering price target to $9 from $25.
Note: I think INKT is ready to be bought out.

Salomon Smith Barney analyst John Joseph expects semiconductor industry to bottom in August of 2001. Expects June qtr to be materially negative, but will not be as negative as March qtr. Best case scenario for a bottom would be late spring/early summer; worst case would be late fall.
Note: I figure the train is leaving 4-6 months early.

Home Depot (HD) Salomon Smith Barney upgrades from OUTPERFORM to BUY and raises price target to $52 from $45. Believe that improving housing turnover and increased lumber prices provides visibility to the back half of 2001.
Note: I thought lumber prices were down. Seems to contradict what I am seeing in construction.

Manugistics (MANU) said that it met earnings estimates of 5 cents a share on higher-than-expected revenue for its fiscal fourth quarter. The Rockville, Md.-based company said that revenue came in upwards of $89 million, more than doubling the previous year's intake of $43.7 million. "Our differentiated solutions, solid execution at all levels of our business, balanced sales across key industry verticals, and increasing sales strength from our global operations are the key factors driving our market momentum and profitability -- allowing us to overcome current market trends," said Greg Owens, Manugistics chief executive. Reports Q4 earnings of $0.05 a share, in line with the First Call consensus of $0.05; revenues rose 104.6% to $89.30 mln from a year-ago of $43.65 mln;
Note: A quote out a of management 101 book. I would have said we had a good quarter.

Lucent Tech (LU) Reuters reports that KPN is set to award LU a contract worth just under one billion euros to build its UMTS mobile phone network, citing German publication Focus Money.
Note: LU been getting some serious deals coming its way. Think which companies are dependent on LU and they should do well.

Some investors and analysts see warning signs that the lodging industry isn't a particularly safe haven for stockholders, as bookings are down from this time last year and hotels scramble to fill high-priced rooms. From WSJ.com
Note: A slowdown in the economy affects travel, which affects travel. A pettern. J

TranSwitch (TXCC) : Company warns for Q1; sees EPS of $0.09-0.10; current EPS estimate is $0.16. Revenue to be approximately $38 mln. Company cites increased cancellations and push-outs of orders;
Note: Problems, problems, all day long.

A leading telecom expert has told the BBC's Money Programme that third-generation mobile phones may never exist. Over-investment in the purchase of 3G licences is blamed. Professor Peter Cochrane, until recently the head of technology at British Telecom, has told the BBC that the new third-generation phones may never appear. The professor is also concerned that some telecom companies may collapse under the financial strain of trying to develop and run a new generation of hi-tech mobile phones. "Make no mistake about it, this is a fairly serious game of poker. Some people are betting everything on this technology," he told the Money Programme, which is due to broadcast on Wednesday. Professor Cochrane, who was responsible for BT's 3G research programme until November 2000, said the auction process was "a really good study in madness". "It was a bit like lemmings going over the edge of a cliff," he added. In the UK alone, it is estimated that 3G networks will need up to 28,000 new masts and base stations. "I think Europe has shot itself in the foot, and certainly the UK has, because I don't think we are going to see 3G," said the professor Kent Thexton from BT said in the programme: "Now 60% of the UK population have found a way to put into their monthly expenditure their mobile phone bills... and what we're talking about is adding to that." http://news.bbc.co.uk/hi/english/business/newsid_1244000/1244153.stm
Note: The European telcos are suffering with huge debt problems like the US counterparts.

Vitesse Semi (VTSS) Company warns for Q2; sees $0.10-0.11; current First Call EPS estimate is $0.21; cites weakness in demand and order cancellations in the quarter; reduces Q2 revenue forecast from $150-160 million to $120-125 millionl; President and CEO, Lou Tomasetta, says " Near-term visibility at a majority of our customers has worsened over the last few weeks and we expect this phenomenon to continue into the next quarter.";
Note: Commuication chip companies are in trouble. Watch BRCM and AMCC to be next.

Dutch telecoms firm KPN is selling off chunks of its business as it gets serious about reducing its £13.7bn debt mountain.
Note: Not as big of debt as ATT, but interest payments are killers. Same company that gave LU a big contract. Go figure.

PMC-Sierra (PMCS) 33.94: Communications chip maker lowers Q1 outlook to $0.02-$0.03 vs $0.12 First Call mean. Reduces revenue forecast to $118-$120 mln. Company to cut workforce by 13%, or 230 employees, in response to the slowdown in customer demand.
Note: Ugly as recession in sector is going to be longer.

Kazakhstan has opened the first major pipeline offering a direct link between Caspian oil fields and international markets. Kazakh Prime Minister, Kasymzhomart Tokayev, turned on the tap on the 1,580-kilometre (950-mile) link via Russia, which analysts say strengthens Moscow's hand in the race to control the region's oil. The pipeline runs from the huge Tengiz oil field in western Kazakhstan to the Russian Black Sea port of Novorossiysk and has an initial capacity of 560,000 barrels per day
Note: More oil, low prices. Just like 1998.

Conexant (CNXT) Down 5.62%: Warns that Q2 results will be lower than previously anticipated due to continuing weak demand and excess channel inventory. Anticipated Q2 net loss of $0.35-$0.40 vs red ink of $0.24 anticipated by analysts. UBS Warburg in their afternoon note says that the company's warning that total revenues will decline 35-40% sequentially in the March 2001 quarter was largely expected; leaves FY02 revenue and EPS estimates unchanged; lowers FY01 EPS estimate to a loss of $1.23 from a loss of $1.14.
Note: Will hit old favorite KOPN as CNXT was 40% of revs.

Quote of the Day
Earlier this month, AT&T Wireless (AWE) started to advertise this new full service -- 3G wireless service, access to the Internet, streaming video, audio, the whole bit. They pointed out that what this was is this NTT DoCoMo I-Mode service, that it used this wide-band CDMA [code division multiple access] chipsets from Qualcomm (QCOM). Then I saw the announcement that Verizon (VZ:) was giving Lucent (LU) a $5 billion contract to build out the infrastructure for this service. When we started to build up our exposure to communications-equipment business in late-December 1996, it was on the same basis. Contracts, after like an 18-24 month period, in December of 1996 were being led by the wireless companies to build out the PCS digital-wireless spectrum. We made the first meaningful uptick in our exposure in technology in some time. We bought an investment position in Lucent, and we bought an investment position in Qualcomm. I mean, $5 billion is a huge contract, and it's more likely to be front-end loaded than back-end loaded because AT&T Wireless is offering this service. I'm sure they're using Lucent and Qualcomm components in this thing. Larry Fuller
http://www.thestreet.com/p/funds/fundjunkie/1361968.html
Note: I’m glad someone else noticing the wireless deals. It seems the press doesn’t want to discuss this trend in better visibility.

Summary

Watched QCOM for a trade. Right now, we see the sell all rallies theme still holding. LU news is good. NTRO should benefit.

We are seeing the hedge funds rotating in and out of sectors. Best to watch and not get suckered into any false rallies. Ease into tech over a ten month timeframe.

1998 was similar but the price of oil was half of what it is now. Inflation, unemployment, interest rates, and stock prices are similar to then. Perhaps, we might be a little more tied to natural gas and oil for the recovery than anyone wants to admit.

Jack

[jackhartmann]

Portfolio up 0.2%, Dow up 1.23%, Nasdaq up 1.63%, S&P500 up 1.99% J-Blimps down 0.2%, Fuel cells/Alt Energy up 3.3%, Gorilla Hunters up 2.3%, Gilder2001 up 2.9%, OC-192 up 0.2%.

NYSE Volume: 1,365 mln...Adv: 1976...Dec: 1040 day 1
Up Volume 1048.17 Down Volume 301.54 day 1
New Highs 59 New Lows 57

Nasdaq Volume: 2,281 mln...Adv: 2485...Dec: 1228
Up Volume 1300.51 Down Volume 936.55
New Highs 25 New Lows 89 Still 10 days of 3/1

Put/Call ratio 0.52 (Range 0.52 to 0.58)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.27 per million British thermal units. Up 6 cents.

VIX 34.90
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch

Breakout of the day
Banks ($BKX) 807.40 +41.78 +5.46% Wells Fargo & Co. shares jumped 3.3 percent to $1.43 to close at $45.43. Earlier the company said it would buy financial services firm H.D. Vest Inc. for $127.5 million, or $21.03 per share, in cash. The price represents a 200 percent premium from the $7 that H.D. Vest shares closed at Thursday.
Note: This should have went down not up.

Collapse of the day
Gold ($XAU) 48.88 -0.62 -1.25% All three indexes green so gold gets sold.

QQQ at $42 Up 1.63% Chart: 3/21 Trend reversal signaled by Friday. As the Friday red streak was broken Blocks: 786/832 neg for 1 day. Volume%: 71

One stock

McDATA (MCDT) Up 25.47% Wit SoundView is hearing that EMC is leaning toward pushing MCDT ahead of BRCD as its preferred fabric switch platform. MCDT also thought to be benefiting from word in the market EMC is working on embedding a switch into a new storage product and EMC has chosen MCDT as the supplier. Other perspective suppliers were BRCD and QLGC.
Note: This may be ugly if EMC support MCDT. BRCD has market share and this could create a wall around EMC.

Portfolio Watch

Applied Materials (AMAT) Up 1.64%: Extends stock repurchase program following the expiration on March 22 of its prior plan. New authorization allows the company to repurchase up to $2 bln of its common stock over the next three years in the open market.

Pharmacia (PHA) up 6.80%: Company discontinuing research programs for progenipoietin and PNU 101387. ProGP was being studied to stimulate bone marrow recovery following chemotherapy. PNU 101387 was in Phase II clinical trials for the treatment of schizophrenia. Company proceeding with the development of Camptosar for small-cell lung cancer but will no longer pursue registration of an indication in non-small cell lung cancer.

Deere & Co (DE) Bear Stearns downgrades to NEUTRAL from ATTRACTIVE as analyst meeting yesterday failed to reinforce confidence in near-term earnings outlook; firm cuts EPS estimates by $0.15 this year to $1.85 from (recently cut) $2.00; suggests swapping DE for CAT.
Note: Those rate cuts will help eventually.

Scholastic Corp. (SCHL) won the bidding to acquire the inventory of former Internet retailer eToys Inc., but said its bid is contingent on its winning all of the stock of the reorganized company.
Scholastic's bid of 30 cents on the dollar was the highest offer for eToys' inventory at the auction, said Howard Steinberg, an attorney representing the toy retailer.
Note: They have cash and this is what they are buying. Odd.

Watch List things to watch but not trade

Avici Systems (AVCI) Down 6.49% Enron Broadband announced today plan to reduce 2001 capital expenditures from an expected $750 mln to $250 mln or less. According to Merrill Lynch, company has been surprised by the availability of leased bandwidth. Enron is one of the three customers that generate 10% or more of Avici's business. Enron, Qwest, and AT&T made up over 90% of the company's revenue last qtr
Note: Big news on the downside. May be $10 soon.

Sam Ginzburg, senior managing director of equity trading at Gruntal, described as "irrational selling" in the wake of the Federal Reserve's decision Tuesday to lower interest rates by 50 basis points, rather than the hoped-for 75 or even 100. But despite the midweek signs of capitulation (albeit controversial), Ginzburg isn't convinced the worst is over because the advance late Thursday and Friday was without a significant catalyst. "I do think we can have two or three good days, but I feel it's an impossibility we're out of the woods," he said. "I still think we're in the sixth or seventh inning of a nine-inning ballgame" of selling. That said, the trader also noted "good institutional buying" Friday and the fact "people want to buy stocks" and that the level of cash on the sidelines is "unbelievable."
http://www.thestreet.com/p/markets/aarontaskfree/1359776.html
Note: Be nice to get a figure on the cash.

Nortel Networks (NT) Down 4.34% In pre-market comments, Dain Rauscher Wessels stated that channel checks performed by firm indicated that orders for Nortel's OC-12 and 48 products began picking up a couple of weeks back, with the long-haul products (OC-192) showing improvement in the last week or so; these are the first positive data points firm has seen in the last couple of months.

Cisco Systems (CSCO) down 5.38% In pre-market call, SG Cowen reduced its Q3 est. for company to $0.06 from $0.11, putting Cowen well below the $0.14 mean. Feels that Q3 could come in below firm's est. if CSCO makes the strategic decision to not pursue higher-risk, vendor-financed opportunities. First Union reduced estimates on Cisco following discussions with industry sources at this week's Optical Fiber Conference, says no one saw a pick-up in service provider spending before next year; First Union cuts Apr qtr revenue estimate to $5.7 bln from $5.9 bln and EPS to $0.09 from $0.11; also sees an increasing risk that Cisco will preannounce, which would send stock to low/mid teens. Paul Sagawa from Sanford Bernstein, is saying that Cisco is going to have a sequential revenue decline that may be more than 15%, and maybe as low as 19%
Note: A double shot in the chest to CSCO. Chart shows people selling any rally. It will need to base a while. I like Sagawa, He said the fiber optics were too high in the fall. I thought dropping 30% was enough. Sagawa is proved right in hindsight.

With Intel's (INTC:Nasdaq) move into the WiFi market, ISIL's dominance in wireless networking is complete. No matter how much Proxim wants to believe, the writing is on the wall: 802.11 is winning, and HomeRF is as good as dead. Luckily it took the stock a few days to catch up, giving investors time to catch the wave. Dave Nagig on TSCM
Note: ISIL balance sheet reveals the truth. INKT dominates the internet caching business yet sucks wind. ISIL may be the gorilla, but the revenues and profits have to show some improvement.

Nucor (NUE) Lowers Q1 earnings outlook to $0.40-$0.44 (mean estimate of $0.54), citing continued weak pricing environment for steel products.
Note: Still no bottom or firmness in steel

Micron Electronics (MUIE) plans to exit the PC business and refashion itself as a Web-hosting services company by acquiring Interland for $130 million in stock.
Note: Bad strategy. Enter a dying market during death spasms.

Adaptec (ADPT) Warns Q4 revenues will fall short of projections and be down sequentially from Q3 by an additional 10-12%, driven by channel inventory pressures worldwide.
Note: PC market still not healthy

World Wrestling Federation Entertainment (WFE) is buying the ailing World Championship Wrestling from AOL Time Warner Inc., ending an intense rivalry that has inflamed professional wrestling fans for more than 20 years
Note: Wrestling is fading. Now if we can figure out the next big thang.

Sun Microsystems (SUNW) Sources at Wit SoundView saying that firm has learned that Hitachi (HIT) has taken some of SUNW's business at EBAY; SoundView believes SUNW will use its balance sheet to make its $0.07 estimate, but out-quarters are at risk
Note: New product out, but will it sell. SUNW gets hit of old products selling at 10 on the dollar hurting SUNW. Would anyone buy my 486/33 PC, no. his is the value of older SUNW products. So much has changed in the technology in 18 months. Support building off base at $17.50.

Nokia (NOK) Company's board of directors approves the repurchase of up to 50 mln Nokia shares through public trading. The repurchases will begin on March 30 at the earliest.
Note: NOK using the stagnant cell phone market to get more market share. Support at $21. Maybe worth a try on a dip above support.

Bowater (BOW) Company warns for Q1; sees $0.50-0.60; current EPS estimate is $0.78. Cites production curtailments in newsprint and market pulp, as well as the decline in market pulp pricing;
Note: Paper stocks trading at low end of two year range. One worth a try since energy declining and lower interest rates will help debt load. Negative ad revs reported by print media hurting.

Reliance Steel (RS) BB&T Capital Mkts upgrades to STRONG BUY from LONG TERM BUY rating due to the recent price decline over the past month; firm says RS has a history, and the potential, for growth; company has posted double-digit top- and bottom-line growth for the past ten years, and firm believes company will continue to grow at a 12%-17% pace both organically and by the acquisition of other service centers; price target is $34.
Note: Analyst babble at its best

Quote of the Day

"The question is whether all the bad news on profits is out," said Nick Sargen, global market strategist at J.P. Morgan Private Bank, which manages funds for wealthy individuals. "The revision to profit expectations is the severest in memory, but it still begs the question of when the economy will pick up."
Note: We are seeing a little break here and there on the economy.

Summary

We saw a seesaw battle all day. Tough to see the outcome when in the war so I bowed out and watched. When the risk reward is even, the market is not the place to be.

April 15 should see the end of tax loss selling. The tricky question will buying begin then or early. Since we are in a mirror image reversal of last year. The tax selling week may be a strong one for the techs. We were down 25% last year that week.

Been watching CREE build a base. Could run 10% to $19.50.

On a side note, the Chicago Bulls beat Charlotte in OT. Good athlete, weak coaching. I did see them use a handheld wireless Symbol Technology bar code scanner, but the discounted merchandise and the regular price had to be rung up separately. I got a behing the scene tour. Lower level skyboxes were $150K a year with an eight year lease. Apparently Jordan help sell them in the first year. $45K for the second level ones. Courtside only runs $450 a game and are sold to season ticket holders. $85 for a row back. Such a deal. Food was nearly $5 for everything. 32oz Pepsi was $5. The bathrooms were spotless at the United Center. I figured it cost me $200 to take one son there.
http://209.100.85.31/photos/p11.JPG is the tourist photo by the Bulls of me and my son.

Jack

[jackhartmann]

Portfolio up 2.1%, Dow down 1.03%, Nasdaq up 3.69%, S&P500 down 0.41%, J-Blimps up 8.3%, Fuel cells/Alt Energy up 2.1%, Gorilla Hunters up 6.2%, Gilder2001 up 4.4%, OC-192 up 7.6%.

NYSE Volume: 1.73 bln...Adv: 779...Dec: 2333 You want capitulation volume, here it is. Day 2 of 2/1 decline
Up Volume 432.80 Down Volume 1295.05 day 3
New Highs 54 New Lows 270

Nasdaq Volume: 2.48 bln...Adv: 1507...Dec: 2287
Up Volume 1719.61 Down Volume 727.34
New Highs 17 New Lows 506 Huge nine day

Put/Call ratio 0.79 (Range 0.58 to 0.97)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.21 per million British thermal units. Up 17 cents.

VIX 39.70
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch

Breakout of the day
Semis ($SOX) 626.39 +68.37 +12.25% RMBS + MU + Cowen’s = $$$$$
Note: I know people who shorted the semis on the rise yesterday when most went down. They either covered at a loss or on pins and needles. This is a strong double top breakout busting through resistance levels of 580 and 620. Support at 550.

Collapse of the day
Dow Utils ($UTIL) 348.66 -13.50 -3.73% Independent power producers provide about 30 percent of California's electricity from a variety of sources including wind, solar and other sources. Because many of the companies, known as Qualifying Facilities, or QFs, haven't been paid they've begun to withhold power, contributing to blackouts in the state Monday and Tuesday.
California has suffered from $6.2 billion in excessive wholesale power costs over the past 10 months, according to a report by managers of the state's power grid.
Note: Descending triple bottom breakdown. 384 was support level that collapsed. Support at 332. This position by CA indicates the fighting may get ugly.

QQQ at $42 Up 6.02% Chart: 3/21 Trend reversal signaled by Friday. Bingo. Right on the money. This is the largest up volume in QQQ since it started! Do not underestimate this. There was strong institutional buying forcing involuntary short covering.
Blocks: 1218/1005 pos for 1 day. Volume%: 76 Volume total was 130M.

One stock

Micron Tech (MU) Up 11.16% SG Cowen expects stock to trade up over the near-term, as it appears the DRAM business has bottomed and that Q2 EPS will be at least in line with consensus. After the close, MU announced it would delay reporting its Q2 results until next week. According to Cowen, indication by company that chip operations for the qtr were "slightly profitable" is probably a little above market expectations
Note: Add the CC last night and this note of sunshine and the semis exploded.

Portfolio Watch

Rambus (RMBS) Up 32.74 EBN posted a story on its website late last night claiming that the delay in the Rambus/Infineon (IFX) trial announced last week is a positive for Rambus, as it gives the company more time to investigate a 1992 document that Rambus cites as evidence that Infineon deliberately copied its technology. " The Rambus charged that a confidential planning document showed the then-Siemens Semiconductor division "deliberately copied" its technology.
At one time Rambus moved up and down depending on which way Intel (INTC) breathed, and now it's which way the court battles go," said Gary Harmon, Rambus' chief financial officer. Indeed, Rambus' stock has a history of rising and falling 20% in a day on the mere hint of news. Harmon said there's been no change in plans to go to trial. In a note to clients Thursday morning, Morgan Stanley Dean Witter analyst Mr. Edelstone said new documents brought into the case, as well as U.S. District Judge Robert E. Payne's decision to delay the start of the jury trial in Richmond, Va., are two factors that might work in Rambus' favor. Documents recently admitted into the trial, including an Infineon internal memo, suggest that "Infineon's DRAM design uses intellectual property patented in Rambus' DRAM architecture," Mr. Edelstone said. Mr. Edelstone said he thinks the judge's extension of the trial favors Rambus because Judge Payne ordered Infineon to perform a thorough search of all its employees' files and ensure no files, including those on computer, are erased or destroyed. "Based on the new evidence, we believe that the potential for Infineon to want to settle out of court has increased significantly," he said. The 1992 briefing was belatedly discovered on an old hard disk and the document was turned over to Rambus attorneys only at midnight last Friday. The specific document surfaced only this week after a transcript of last week's hearing resulting in the trial delay became available.
According to the transcript, David Monahan, Rambus lead attorney, characterized the Siemens Semiconductor document as showing the firm "was knowledgable of the Rambus technology, contrary to their sworn denials. They said 'We're going to make it public domain We're going to change some parts.' They deliberately copied and misappropriate the invention."
By contrast, the Infineon attorneys argued that the document supported their contention that Rambus had synchronous DRAM proprietary technology as early as 1992 that they failed to disclose to the JEDEC (Joint Electron Devices Engineering Council) open industry standards deliberations on SDRAM. They denied the then-Siemens Semiconductor division or JEDEC copied any Rambus IP but rather developed an entirely different SDRAM specification. The specific portion of the 1992 Siemens Semiconductor session minutes discussed "the Rambus interface problem. And how Rambus created an integrated memory concept."
The minutes said, "A JEDEC committee on MOS memory has attempted for roughly a year to define a universally usable successor for the previous DRAM, the so-called synchronous DRAM (SDRAM).
"The original idea of SDRAM is based on the principles of a simple clock input (IBM toggle pin) and the complex Rambus structure. NEC (Rambus license holder) was first to suggest a leaner 'public domain' version based on this, synchronous controls, 2 bank, 4-field internal clock bus, 4-word register at the data output and possible low level interface (similar to GTL), while leaving off the proprietary Rambus control protocol.
"It has become clear that Rambus memory can easily be converted into a SDRAM (1 or 2 bank) or conventional DRAM," according to the document quoted by Monahan.
He also referred to a slide presentation by Meyer of Sept. 30, 1992 that referred to making this SDRAM design 'public domain.'
The transcript showed that the court ordered Rambus to take a deposition of Meyer last week, while Infineon President Schumacher was allowed to return to Germany on condition that his deposition would be taken this week.
The transcript released this week also revealed that even Rambus attorneys conceded that Judge Payne's narrow interpretation of the firm's SDRAM patent definitions would eliminate one Rambus patent.
However, attorney Monahan argued that three other SDRAM patents in the case aren't affected by the ruling.
Infineon asked that Judge Payne dismiss the case because the firm's SDRAMs don't use any of the multiplexed bus or read/write or block size specifications cited in the Rambus patents.
The judge said he wasn't open at that time to considering any more of the many motions for summary judgment filed by both sides, although he opened the door to possible consideration in the future.
Still pending also in the case is a federal court of appeals ruling on Rambus request for a Writ of Mandamus barring Judge Payne's waiver of attorney-client privilege to allow Infineon depositions on Rambus legal discussions on the JEDEC policy requiring disclosure of pending patents.
Note: Easy to watch if long. Day trading it is another matter. $33 is resistance so this baby could run tomorrow. This post by Monty Lenard on Mar. 21 describes the feeling of the shorts today. “There was one time when I boxed a position but it was when I shorted RMBS and they tried to tear my head off.
I boxed it until it topped and sold the long and held the short but I agree with you that it is not a good practice and sure isn't fun.”

Oracle Corp (ORCL) up 5.08% Wit SoundView field checks indicate business conditions are challenging, with many customers having delayed deals, or chosen to execute considerably smaller deals... Firm chooses to maintain its Strong Buy rating on belief that ORCL shares are at or near a bottom.

NTAP up 16.72%

AMAT, BRCD up double digits

DRMD, PHA, MDT down 5%

Watch List things to watch but not trade

JDS Uniphase (JDSU) Roberston Stephens downgrades to LT ATTRACTIVE from BUY on concerns that March is shaping up to be another tough month for communications components companies. Components companies indicating that their customers continue to be silent in their ordering to the extent that some of the past weeks have seen no net bookings. Could take well over 2 qtrs for excess inventory situation to fix itself such that the EMS players and the OEMs can begin reordering product again.
This follows Micron’s CC exactly.

The book-to-bill ratio hits 0.77 in February, worse than January's 0.80
Note: Rate of decline is slowing.

Semi Recession : ABN AMRO calls this the worst semiconductor recession since 1974. That said, firm still expecting a V-shaped recovery in the group, starting in late-Q3 (within the context of a U-shaped U.S. economic cycle). Looking at the past 5 down cycles since 1980, IC Insights found that in no case did qtr/qtr decline last more than 3 qtrs.
Note: Not seen this data before.

Bear Stearns [BSC] At current market prices of $44.13, the valuation measure of market price to book value per share is 1.38 times, approaching its ratio of 1.21 times per-share book value reached in October 1998
Note: Maybe a dabble in one should occur.

Sun Microsystems (SUNW) Most recent round of channel checks by CSFB indicate continuing weakness in the server market, which appear to be leading to slowing sales growth and increasing pricing pressure. Firm reducing estimates to reflect lingering macro and capacity issues. Reduces Q4 EPS to $0.09 from $0.11 and revenue est. to $4.5 bln from $4.8 bln. FY02 forecast lowered to $0.54 from $0.66 and to $21.8 bln from $24.2 bln.
Note: Weakness now, but for how long.

Procter & Gamble, the consumer products giant, plans to cut 9,600 jobs worldwide in a further effort to save money and boost sales growth.
Note: P&G products have quiet been hiked so sales growth will be tough.

Cree (CREE) Increases stock repurchase program announced in January by 3 mln shares to a total of 7 mln.
Note: They announced the first one at $30’s.

TXN reports good reception of their combo PDA/cellphone in European trials.
Note: Just a word passed on the sly. Need to figure out what is actually meant by this.

Utd Parcel Svc (UPS) Guides down Q1 EPS to $0.49-$0.51 (mean $0.58) to reflect the slowing economy. If current economic conditions persist, Q2 earnings will fall in the range of $0.55-$0.60 (mean $0.64).
Note: A surprise since Fedex was strong.

Speaking Wednesday at a semiconductor conference in Austin, SSB analyst John Joseph said chip makers must continue cutting capital spending in this downturn. "We will be in decline through August of 2001, at least," he added, pegging the real start of the chip downturn to August 2000. Semiconductor stocks typically start an up-tick two to three months after business conditions start to improve, he noted, putting a recovery in chip stock prices in October or November, at the earliest. Joseph said Taiwanese chip set and DRAM makers are "beginning to see a tightening in the (supply) chain," a possible indication of better business conditions. He forecast a 22% decline in shipments of microprocessor units this year, the first such decline since 1985.
Note: Joseph is the hot semi analyst.

Morgan Stanley on Machinery : In light of Deere & Co. (DE) warning, firm advises buying on weakness. Earnings risk in the group is less now than in previous downturns. Several quarters of depressed industrial demand, coupled with aggressive production cuts, have left inventories at half to a third of the levels leading up to previous cyclical downturns. Would stick with Caterpillar (CAT), Parker-Hannifin (PH), Ingersoll-Rand (IR), and Terex (TEX).
Note: All ready to sell and I saw this note. Why fight the Fed?

"What we have is a confidence crisis, not an economic crisis" said Alfred Goldman, chief market strategist at A.G. Edwards & Sons, as the Dow industrials plumbed the depths early Thursday. "Folks are just selling stocks willy-nilly."
Note: Willy-nilly, must be a technical term. <gg>

Immunex (IMNX) Immunex and American Home Products Corporation (AHP) announced that guidance from an independent data monitoring board indicates that ongoing studies of ENBREL (etanercept) in chronic heart failure (CHF) would not be able to meet efficacy endpoints. Based on this guidance, the companies have decided not to proceed with the large Phase 2/3 clinical studies in CHF;
Note: Biotechs would normally be hit with this.

British researchers are developing a new kind of optical fiber that could surpass the known data transmission limitations of fiber. Augmented with a pattern of microscopic air holes that runs their entire length, these aptly-named holey fibers have a variety of surprising optical properties, not the least of which is single mode operation at all wavelengths and the ability to withstand the transmission of huge amounts of energy or data. To produce the fibers, researchers aligned an array of thin glass tubes, melted them together, and then stretched them to make a single fiber several kilometers long and about 125 microns across. While it's previously been suggested that such fibers would be predominantly used to transmit power -- or even matter -- their data transmission capabilities could be instrumental to the development of optical computers.
Note: Still in research, check back in five years.

TIBCO Software (TIBX) Reports Q1 earnings of $0.06 a share, $0.03 better than the First Call consensus of $0.03, vs year-ago earnings of $0.01; revenues rose 95.5% to $82.10 mln from a year-ago of $42.00 mln;
Note: A big surprise. Looks good.

Quote of the Day

"People are feeling really wounded because they bought stocks at 100 times revenues, and they can't understand why their life's savings is gone," SUNW CEO McNealy told Reuters. "People, get a grip! Look at what you did! 'Hey, that truck hit me!' Well, you play in the freeway, you are going to get hit by a truck... We didn't predict the wild and crazy up and we didn't predict the wild and crazy down. And we're not alone. When things get back to normal, I'll be dead."
Note: Maybe that why he sold some stock.

Summary

Dow set an intraday low not seen since February 1999 at 9107. I felt 9600 and 9100 were support level. Apparently program trading for buying and covering triggered also. 200 points up in the last hour.

Smarter shorts covered early today. A squeeze of the season could occur tomorrow. This was overall short covering as the advance/decline on the Nasdaq is still bearing and the Hi/Lo a monster toward the negative. The QQQ is another matter as the rally is very selective. John Maynard Keynes used to blame big stockmarket swings on what he called the ‘animal spirits’ of investors. We may break that Friday streak of seven down in a row.

The VIX is right, the put/call is not.



Jack

[jackhartmann]

Portfolio down 1.0%, Dow down 2.40%, Nasdaq down 1.46%, S&P500 down 1.79%, J-Blimps up 1.7%, Fuel cells/Alt Energy down 2.7%, Gorilla Hunters up 2.1%, Gilder2001 down 0.2%, OC-192 down 1.6%.

NYSE Volume: 1,310 mln...Adv: 860...Dec: 2209 Huge volume on a down day, no good
Up Volume 301.93 Down Volume 1002.00 day 2
New Highs 91 New Lows 140

Nasdaq Volume: 2,096 mln...Adv: 1240...Dec: 2484
Up Volume 967.25 Down Volume 1063.28
New Highs 21 New Lows 397 Huge eight days

Put/Call ratio 0.83 (Range 0.80 to 1.01) Bearish
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.04 per million British thermal units. Down 24 cents.

VIX 36.39 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch

Breakout of the day
Semis ($SOX) 558.02 +15.97 +2.95% Salomon Smith Barney squawks on semis following scattered rumors that they were turning positive; firm says that we are still 3-6 months away from buying semis, though downside is limited by Fed rate cuts. SEMInvest conference is in New York City this week. The three-day event is sponsored by trade association Semiconductor Equipment and Materials International.

Collapse of the day
Biotechs ($BTK) 423.47 -38.73 -8.38% Meltdown. Amgen. Robert Gottlieb, a partner with Feinstein Kean Healthcare in Cambridge, Mass., said biotech stocks are suffering because of general gloominess among investors. He said the sector tends to be particularly sensitive to shifts in investor sentiment because the stocks of many biotech companies are valued on tomorrow's promise rather than today's earnings. "People are running for cover generally," Gottlieb said. "It just seems the mood is such that it doesn't matter what a company is doing. When the value of an industry hinges on expectations, it's more susceptible to changes in mood, that's why you saw so many up last year and why you're seeing so many down this year."


QQQ at $40 Chart: Trend reversal signaled by Friday. Blocks: 817/976 neg for 5 days. Volume%: 63

One stock

Amgen (AMGN) fell $5.88, or 9.6 percent, to $55.44, partly on concern that first-quarter sales of Neupogen, the company's second-biggest drug, won't be as strong as expected and some sales forecasts for the anemia drug Aranesp are too high, investors said. J.P. Morgan H&Q analyst David Molowa yesterday lowered his first-quarter profit estimate for Amgen, writing in a research note that after 10 years on the market, Neupogen faces slowing sales growth as doctors push for new regimens that require less of the drug to treat infections in chemotherapy patients. The analyst and investors have also said some estimates for 2001 sales of Aranesp, which is awaiting U.S. Food and Drug Administration approval, may be too bullish. ''I think the real problem is the FDA is backed up, and there is no screaming demand for Aranesp,'' said Mathew Blackman, an analyst at Northern Trust, which owns shares of Thousand Oaks, California-based Amgen. ''I think the concern people have is some of the estimates for Aranesp are too high,'' said Blackman, who expects initial sales of the drug will be slower than others have forecast


Note: Drug stocks getting hit too.

Portfolio Watch

Applied Materials (AMAT) Up 4.82% Company's CFO has "very low expectations" for a near-term recovery in the sector, reports Reuters. Speaking at the SEMIvest conference in New York, CFO Joseph Bronson stated that there aren't any positive signs that he can see

Oracle Corp (ORCL) up 2.41%: CSFB views Oracle job cuts as a modest positive as company adjusts to slower market demand. However, given stock's relatively rich valuation (33x CY01 EPS) and aggressive sequential growth expectations, feels that there is additional downside exposure at current levels.

Deere & Co (DE) Down 5.36% Warns that earnings for Q2 will likely fall below the yr-ago level. In the yr-ago period, DE posted EPS of $0.87. Current mean for 2001 Q2 is $0.96 a share. Company scaling back production due to continued caution on the part of customers.

Watch List things to watch but not trade

Intersil Holding (ISIL) up 18.10%: Shares of Proxim being upended by news that Intel (INTC) to adopt a competing wireless system for its consumer-model wireless networking devices. Wireless LAN chipmaker, Intersil, seen as a beneficiary of the move. Hearing that ISIL should begin to experience a material benefit beginning 2nd-half of 2001
Note: Wireless sector has been getting some cash moving into it.

Consumer prices nudged 0.3 percent higher in February, driven higher by rising food, clothing, medical and tobacco prices, the Labor Department said Wednesday. Core inflation, which excludes volatile food and energy prices, also rose 0.3 percent
Note: Hmmm. Rising food is right.

Proxim (PROX) down 39.50%: Being hit by Reuters report that Intel plans to support a wireless networking standard known as Wi-Fi. Until now, Intel had backed the HomeRF standard for the home. Decision seen as a blow to HomeRF backers such as Proxim.
Note: Wi-Fi, damn, Where’d I put my book, “Wi-Fi for dummies”?

I stated last week that I thought it was likely that the naz would eventually test support at 1760 and fail...and ultimately test 1450
Stan S. on his site. Nice Nasdaq chart showing support.
http://www.wallstreetmonitor.com/free_stuff/free01.html

Richardson Elec (RELL) Reports Q3 earnings of $0.29 a share, in line with the First Call consensus estimate, vs year-ago earnings of $0.20; revenues rose 26.9% to $125.47 mln from a year-ago of $98.87 mln. Additionally, Edward Richardson, Chairman and CEO, indicated that management remains comfortable with analyst estimates for Q4;
Note: Good report.

Morgan Stanley Dean Witter (MWD) The investment bank said first-quarter net income slumped to $1.1 billion, down 30 percent from last year's record first-quarter tally of $1.5 billion. Diluted earnings per share were 94 cents, down 30 percent from $1.34 a year ago. The latest number was ahead of the 93 cents per share forecast by First Call.
Note: Down 30%. And we still are not done yet.

FedEx Corp (FDX) Reports Q3 earnings of $0.37 a share (including a $0.04 per share benefit resulting from a tax rate change), $0.01 better than the First Call consensus; vs year-ago earnings of $0.37; revenues rose 7.1% to $4.84 bln from a year-ago of $4.52 bln; volume growth, yield growth and weights for February dropped noticeably for all operating units;
Note: Uneven report but street was bracing to hear energy costs killing it

Bear Stearns (BSC) dropped $1.25 to $45.50 after the company said earnings per share dropped to $1.10, down from $1.89 per share last year. The bank missed a lowered forecast for earnings per share of $1.28. Net income for the first quarter before an accounting change was $166 million, down 40.3 percent from $278.2 million.
Note: Cramer been pushing these financial stocks too much.

3Com Corp (COMS) Reports Q3 loss of $0.36 a share, $0.01 worse than the First Call consensus of ($0.35), vs year-ago earnings of $0.22; revenues fell 17.9% to $629.60 mln from a year-ago of $766.70 mln; company attributes decline of revenues to reduced demand across most of its product segments, stemming largely from weaker industry conditions in the US. The good news came on the conference call when the company announced a substantial market share gain in the gigabit ethernet space that gives 3Com the market lead at about 29%.
Note: Bad to worse. First time I saw the gigabit ethernet #

Lehman Bros. (LEH) said first quarter net income fell to $387 million, or $1.39 per share from $541 million, or $1.86 per share in the year-ago period. The investment bank beat by 2 cents the estimate of $1.37 per share in a survey of analysts by First Call/Thomson Financial. The stock fell $2 to $63.90.
Note: Layoffs a coming.

Sunoco (SUN) Company issues upside preannouncement for Q1 and now expects earning in range of $1.00-1.11 vs current EPS estimate of $0.97; company also plans to shut down its Yabucoa, Puerto Rico refinery and three lubricants blend plants;
Note: I got a refiner, just need a utility and a gas company

The Nikkei surged 7.5% after the Bank of Japan eased monetary policy, prompting foreign investors back into the market, its biggest one-day gain in three years,
Note: No interest and they bought bonds. Japan is the lynch pin for the Asian recovery.

Hewlett-Packard (HWP) Wall Street Journal Online reporting this afternoon that the company has indicated that revenue growth slowed to 2% in Q1 and probably won't improve for the rest of the year. CEO Carly Fiorina made comments at a press conference ahead of CeBIT and stated that they are not assuming any improvements in the current fiscal year, noting that "it's like navigating in a fog."
Note: See tech dive, dive tech dive,

When politicians declare a crisis, it is often because they want to do something unpopular.
For George W.Bush's administration the agenda is clear.The US president wants to please his supporters in the oil industry by opening up more of Alaskaand Federal lands for crude production. But if the US's 56 per cent dependency on oil imports represents a crisis, the proposed measures will hardly solve it.
Less restrictive rules on drilling would indeed be sensible. As UK exploration in leafy Dorset has shown, oil installations can have a minimal impact on areas of natural beauty if they are well designed. But US oil production has declined by more than a third in the last 30 years in the face of steadily rising demand. So renewed exploration would not do much to reduce imports. The idea of an energy crisis is inspired more by a confluence of popular anxieties. Electricity blackouts in California, the near doubling of well-head natural gas prices last year, the tripling of crude prices between February 1999 and last autumn, and shortages of refined products in some areas, particularly heating oil: these have all contributed to a sense of unease. A tightening of energy markets is hardly surprising after a decade of rapid growth in demand while supplies have been constrained by environmental concerns. Spare capacity in the US electricity industry has fallen to an average of 15 per cent, about half the reserve in the 1980s and close to the danger level in some areas. Spare refinery capacity has almost disappeared. Stocks this winter were well below their normal range, and imports of refined products have risen sharply. But none of this calls for crisis measures. The US energy department's forecast suggests that the price of natural gas and petroleum products will fall this year and next, while electricity prices will stabilise. No doubt there will be sharp spikes in some areas, such as California, where investment has been chronically depressed. But these can be corrected if the market is allowed to work without crippling regulatory constraints. Independent power companies are now building about 80 per cent of the US's new generating capacity, and supply is slowly pulling ahead of demand. The administration's task must be to encourage the process and the deregulation that is gathering pace in many states, particularly in the north-east. It should also pay more attention to sensible ways of reducing demand. Mr Bush may try to use the language of crisis to persuade states to allow more refineries, pipelines and transmission wires to be built. But market signals are likely to work better. Americans will be more sympathetic to building new plant when they feel the impact of shortages where it hurts - in their pockets. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT30KYCGLKC&live=true
Note: Wow. If FT is right, my chasing into energy would be a bad mistake.

DuPont (DD) U.S. District Judge Donald J. Stohr ruled yesterday that a license held by DuPont to sell seeds containing Monsanto's Roundup herbicide-tolerant technology was terminated by the 1999 merger between E.I. duPont de Nemours and Company and Pioneer Hi-Bred International Inc. Decision means that all sales of Roundup Ready soybean and Roundup Ready canola seeds by DuPont's subsidiary Pioneer since the Oct. 1, 1999, merger were unauthorized, thereby exposing DuPont to a significant damage claim by Monsanto (MON);
Note: I can’t remember if PHA will get some of this or not.

``Japanese automakers are riding a good wave of the weakening yen as they continue to expand their market share in the U.S.,'' said Yasuo Ishizuka, who manages 60 billion yen ($487 million) in Japanese equities at Kokusai Asset Management Co. Toyota, Honda Motor Co. and other Japanese automakers have posted gains in U.S. sales this year, while overall sales there have slipped.
Note: Maybe we have to buy more Hondas to save the world. <gg>

Micron Tech (MU) Said that it appears the excess inventory position at PC OEMs has corrected itself, but that customers are ordering DRAM now at a level that is commensurate with current demand; did note that it is suffering from a lack of visibility with respect to determining when shipments will return to more normal levels in the networking and communications markets.. Micron says inventories at its networking communications customers remains high because the communications equipment makers reacted much more slowly than the PC makers did in correcting the situation. essentially, the communications equipment makers didn't start reacting, Micron says, until the first quarter of 2001.
Note: Sorta good news, maybe a brief lowering of the haze

GREENSBORO, Vt. (AP) - Federal agents seized a Vermont farmer's flock of 234 sheep Wednesday for fear they are infected with a version of mad cow disease - the first such action ever taken against livestock in the United States.
Note: If this is true, watch the price of beef plummet.

Early Wednesday, fund-tracker Lipper reported that growth funds' net outflows in February totaled more than $4 billion and, in sum, stock funds' net outflows were a record $11.4 billion.
Note: We all can’t be buying money markets.

Quote of the Day

"Both the company and the Client Banker need to be notified, in advance, of the recommendation change that we plan to make. Advance copies of the complete research note sent must be sent to both parties. If the company requests changes to the research note, the analyst has the responsibility to either incorporate the changes requested or communicate clearly why the changes can not be made."
J.P. Morgan note to analysts in Europe.
Note: I smell manipulation confirmed.

Summary

Choppy action all day, EOD rally was afoot, then the tidal wave of selling came and washed that away.

The Nasdaq at 1,830.21, its lowest close since Nov. 4, 1998, 2 ½ years of gains wiped out.

Dow is in trouble. May have to lighten up on DE as it caught me by surprise.

Jack

[jackhartmann]

Portfolio down 2.9%, Dow down 2.39%, Nasdaq down 4.80%, S&P500 down 2.41%, J-Blimps down 7.6%, Fuel cells/Alt Energy down 0.5%, Gorilla Hunters down 7.4%, Gilder2001 down 7.4%, OC-192 down 7.3%%.

NYSE Volume: 1.23 bln...Adv: 1303...Dec: 1764
Up Volume 332.10 Down Volume 881.84 day 1 of 2/1
New Highs 126 New Lows 62 day 1 of 2/1

Nasdaq Volume: 2.01 bln...Adv: 1375...Dec: 2258
Up Volume 259.35 Down Volume 1688.39 Capitulation amount on downside
New Highs 35 New Lows 185 Huge seven days

Put/Call ratio 0.58 (Range 0.44 to 0.58) Bullish
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

April natural gas $5.28 per million British thermal units. Up 25 cents.

VIX 35.04 up
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

Sector Watch

Breakout of the day
Paper ($FPP) 306.98 +4.89 +1.62% Lower interest rates help this indebted sector.

Collapse of the day
Biotechs ($BTK) 462.20 -37.28 -7.46% Goat hero, goat. Collapse below key support level of 480 leave more downside.

QQQ at $40 Chart: Collapse below support. Blocks: 832/875 neg for 4 days. Volume%: 80

One stock

Solectron (SLR) down 11.17% AG Edwards downgrades to ACCUMULATE from BUY citing poor visibility and lowers price target to $35 from $60; believes Q3 is the trough as Q4 is expected to be at least flat and perhaps modestly better.
Note: Missed and took whole sector down.

Portfolio Watch

MDT, UCL, DRMD, BGP were green.

Medtronic (MDT) up 1.24% Gruntal & Co reiterates OUTPERFORMER rating after company presents positive results on its MIRACLE trial this morning. Believes that the MIRACLE trial will be positive and that company will battle Guidant (GDT) for leadership in heart failure market. SG Cowen suggests that the numbers from the study of advanced heart failure patients are likely to be viewed favorably. However, this patient group represents a very small slice of the total patient pool with the data not apt to alter physicians' views. ABN AMRO believes that today's release of positive trial data as a significant event, noting concerns in the marketplace that MDT was three months behind its competitor Guidant (GDT) introducing a new product for heart failure.
Note: Good news indeed.

A recap of the rate cut as run on The Thread

“I think the thread consensus is .50 with a sell-off. We'll see how good we are soon. “ Dale Weaver 1:44

“Good timing... about the time FOMC speaks, California's rolling blackouts will begin... per CNBC.” Sirrealistic 1:41

“the suspense is killing me” baldy 2:13pm

“LOL, the thread called it so far, .50! “ Dale Weaver 2:13

“50 built in. what do we do now.” Smart money 2:15

“we stick our head out and start to puke” Baldy 2:16

“50% CUTS here, FOMC risks toward economic weakness. Now Maria is trying to spread the doom and gloom, Capitulation came last Friday.” Handson 2:16

In the Stock Manipulation Theory and Conspiracy Handbook, we should get a 50 pts rate cut with huge whoosh down followed by the large hedge funds scooping up shares on the cheap. Tommorrow or EOD today will be a runup. CNBC will cooperate by talk of a further testing of the bottom. <gg> Jack 2:17

“Too early to go long Kevin, let it run a while” Jack 2:20

“it went down 30 points in 5 minutes, then went back up 30 points in the following 5 minutes, then it went down 30 points again ... hee hee hee, ain't that fun “ Baldy 2:34

“Why buy now! See if we hold the low of today. “ Handson 2:38

“The MMs and CNBC going to play the cut as bad farking news, but the big money is buying if it dips 3-4%. Then we'll see a bear trap set and short squeeze sprung. Just think like a ruthless mofo brokerage with alot of cash.” Jack 2:38

“The disgust may come next, hang on to your hats. “ Dale 2:44

“So far, the thread called it right on the button, 1/2 with a selloff. “ Dale 2:51

“I have a feeling that this market is going to break through to the low 1800, while the big boys load up and Greenie will conveniently do an intrameeting rate cut ...of course, the individual investors will get fark on the way down and on the way up ...that is MMs favorite pastime Baldy 2:57

“When people realize We have had 3 cuts this year with one intra meeting and the FOMC stating concern of continued risks of economic weakness, money will come back in from the sidelines. Pisani is a nerd but Him, Joe and Tyler are at least objective re market conditions. A 1/2 point cut is good for a company like WCOM.” Handson 3:02

“dude, the MMs monitor this thread, you are farked ... welcome to this spanking session “ Baldy 3:10

“Fark.INTC...new 52 week low...new closing low. “ silenttype 3:12

“Greenie gave the longs the finger and told 'em to ben dover.” Teri garner 3:24

“smart money ain't buying yet, IMO. We could get more margin selling tomorrow, IMO” Dale 3:26

“US equity mkts now on elevator ride to H E L L. “ Teri 3:28

“CNBC is such a joke. They act is if everyone is surprised by only getting 50 basis points. I love how they set it up all week long, and say the public was dissappointed. “ Kevinmark 3:40

“34.57 on the vix is not high enough. This is not over till it get to 40. “ Wes Stevens 3:41

“CSCO a teenager again 19 5/8” finigan 3:41

“Looking to get back in when VIX goes over 35. April 2000 VIX got to 40,,, 1997 it got to 50,,1998 it hit 60 one day. highest it has been since they tracked it as far as I know. “ Cray 3:47

“Greenie just buried the longs in a casket on the Titanic for good.... “ Teri 3:50

“Well I had targeted 3-4% for the downside and we are at 4.17%. I think I might buy on the gap down tomorrow as the selling is not basing.” Jack 3:51

“Can't believe so many were looking for 75/100 point cut today....50 was all he was going to do as we all posted. “ Bsims 3:55

“new low. Yippee. Huzzah. Steenkin' pimple lickin front loading farkle boinking finger lifting heiny baring market.” Sirealist 3:55

“Remember the person who hung on to yesterday's rally comes home and see this mess and will sell it at the market open. The mofo ruthless brokerages and hedge funds are painting this all red to the average person. Overseas markets will tank on the news so this will exacerbate the fear to the last of the hangerons. The bear trap will set at the open.” Jack

Watch List things to watch but not trade

For the Dow since 1971, the average performance for the month following the third rate cut is 1.99%. The average month for the Dow overall is 0.79%.
The average performance for the year following the third rate cut is 22.42%. The average year for the Dow overall is 10.32% Per Don Luskin of Metamarkets
Note: Knock, knock, are you listening? Bet with the odds, dammit.

Richardson Elec (RELL) Reports Q3 earnings of $0.29 a share, in line with the First Call consensus estimate, vs year-ago earnings of $0.20; revenues rose 26.9% to $125.47 mln from a year-ago of $98.87 mln. Additionally, Edward Richardson, Chairman and CEO, indicated that management remains comfortable with analyst estimates for Q4;
Note: Not a bad report.

Singapore's ST Assembly Test Services <STTS.O> said it would suffer a first quarter loss of US$23 million to US$25 million and revenues would be about 50 percent lower compared with the fourth quarter of last year. Weaker demand came from customers across the board, chairman and chief executive officer Tan Bock Seng said in a conference call with analysts on Tuesday after the profit warning. "There is no one customer that we are aware of that is not expecting some slow down," Tan said.
ST Assembly's top customers in the first quarter were Analog Devices Inc <ADI.N>, Alcatel SA <CGEP.PA>, Broadcom Corp <BRCM.O>, Infineon Technologies AG <IFXGn.DE> and Marvell Technology Group Ltd <MRVL.O>.
Note: No help to these.

Jabil Circuit (JBL) Company reports Q2 EPS of $0.21, $0.01 better than consensus on revenues of $1.2 bln vs $838 mln in the year-ago period. JBL is warning for Q3 and Q4; sees Q3 EPS of $0.15-0.18 vs estimate of $0.25;
After SLR yesterday, no surprise.

Applied Micro (AMCC) Now hearing from sources that the company, while not guiding lower, did express considerable caution about the macroeconomic outlook, and that this might lead to some further reduction in analysts' estimates, particularly for the June qtr.
Note: Again sector is tough

Quote of the Day

"The possibility that this excess could continue for some time and the potential for weakness in global economic conditions suggest substantial risks that demand and production could remain soft. In these circumstances, when the economic situation could be evolving rapidly, the Federal Reserve will need to monitor developments closely." Greenspan
Ttranslation: We got more of that money if necessary.

Summary

Despite hitting the numbers for a decline today, we need to get the put/call a little more bearish before buying some more.

Hearing media bleat how bad the stocks sold off all evening. Let’s hope the selling is done then.

Jack

[jackhartmann]

Gopp, Thanks, I'll try and listen to TRW latest CC and post results here.

Noticed TRW basing at the low range of its 52 week trading range.

Jack

[goop]

Falcon and Snowman-- company TRW
I didn't know it but my friend heavy into spy and war stuff
remembered and looked it up. I suffer from CRS.
Don't need spies, Eqifax just put up a web site for credit info and read this:
(Great ad for Forbes too)
Hacker Uses Forbes List To Steal
http://dailynews.yahoo.com/h/ap/20010320/tc/forbes_list_hacker_1.html

``He's the best I ever faced,'' said Detective Michael Fabozzi of the NYPD's Computer Investigation and Technology Unit. Said another detective, Jahmal Daise, ``You rarely run into someone this good.''

Abdallah is charged with criminal possession of forged devices, stolen property and criminal impersonation, the Post said. His case has been taken over by federal investigators.

Abdallah allegedly used computers at a local library, Web-enabled cell phones and virtual voice mail for the six-month scam that involved duping credit reporting companies such as Equifax into providing credit reports on his rich victims, authorities said. He then used the data to gain access to credit cards and accounts at brokerage houses such as Goldman Sachs, Bear Stearns and Merrill Lynch, the newspaper said

Abdallah, a convicted swindler, allegedly breached bank, brokerage and credit-card accounts of people such as Steven Spielberg, Martha Stewart, George Lucas, Oprah Winfrey, Ross Perot, Warren Buffett, Ted Turner and Michael Bloomberg. The number of victims could top 200, the story said.


Gotta love this internet and how it will change your life.

[jackhartmann]

Portfolio up 4.3%, Dow up 1.38%, Nasdaq up 3.19%, S&P500 up 1.76%, J-Blimps up 4.4%, Fuel cells/Alt Energy up 4.4%, Gorilla Hunters up 8.0%, Gilder2001 up 5.4%, OC-192 up 5.4%.

NYSE Volume: 1,120 mln...Adv: 1957...Dec: 1102
Up Volume 869.99 Down Volume 241.86
New Highs 113 New Lows 94

Nasdaq Volume: 1,772 mln...Adv: 2197...Dec: 1523 Up on average volume.
Up Volume 1261.51 Down Volume 477.75
New Highs 32 New Lows 283 Huge six days

Put/Call ratio 0.56 (Range 0.48 to 0.52) Very Bearish to Bullish in a day. Weeeee!
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.

VIX 33.39 down.
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.

April natural gas $5.06 per million British thermal units. Up 3 cents.

Sector Watch

Breakout of the day
Biotechs ($BTK) 499.48 +31.43 +6.72% Collapse on Friday and green today.

Collapse of the day
Insurance ($IUX) 693.42 -6.91 -0.99%

QQQ at $43 Chart: Six day base. Blocks: 564/565 neg for 3 days. Volume%: 61

One stock

Lucent Tech (LU) Up 19.81%: Awarded 3-yr, $5 bln contract by Verizon Wireless to supply third-generation (3G) high-speed mobile network infrastructure. Deal positions Lucent to become the largest supplier of 3G equipment to Verizon Wireless. "Verizon Wireless spokesman Jim Gerace declined to identify other suppliers that may have sought the contract. The company also buys network equipment from Nortel Networks Corp. and Motorola Inc., he said. Verizon buys about two-thirds of its wireless-network equipment from Lucent, Gerace said." Verizon will use the equipment, designed around a wireless transmission standard called CDMA 2000, to help develop its next-generation wireless technologies.
These networks require high-speed data-networking systems to support mobile Internet sessions.
Note: A baby bell giving money to a baby bell spin off. At least VZ is spending the money. LU customers will do well. Every press release pertaining to 3G wireless now contain the CDMA2000 solution in it so QCOM is moving now. Even if they gave VZ a great deal, the massive signing helps enormously: erasing perception they are falling farther behind rivals, capturing the #1 buyer as the moment. NT has to be stinging as it probablt was competing against LU for the deal. LU was down to 1x sales. $35 Billion market cap and $35 Billion sales. This deal and the Sprint wireless deal are my triggers to dip into a wireless stock.


Portfolio Watch

<B> EVERY SINGLE STOCK WAS GREEN!

A record day in history. Let us observe this event by eating some green jello. (It was leftover from St. Pats and the wife made the Thai too hot tonight.)

Palm Inc (PALM) up 5.53% Sees no merit to lawsuit filed March 14 by NCR Corp against Palm and Handspring (HAND). The NCR suit alleges that handheld computers made by the companies infringe two NCR-owned patents for a type of "portable personal" terminal.
Note: Probably will sell this week

Corning Inc (GLW) Up 8.71% Guides down outlook for 2001 pro forma earnings from previously stated guidance of $1.40-$1.43 per share to $1.20-$1.30 per share. Company maintaining Q1 forecast of $0.28-$0.31 a share, which compares to $0.23 Q1 of last yr. New forecasts based on recent customer feedback which indicates that a meaningful recovery of spending by telecom customers will occur much more slowly than company had previously anticipated. Company sees worldwide fiber market growth of 20% this yr and worldwide photonic components market growth of 10%-30% in 2001.
Note: Down 5% premarket on the news. News not so bad as warnings go. Now trading at its growth rate. Such a deal.

Pharmacia (PHA) Study results demonstrate that elderly hypertensive osteoarthritis patients taking Vioxx experienced a statistically significant increase (approximately 3 mm Hg) in mean systolic blood pressure compared with those taking Celebrex. PHA and Pfizer co-market Celebrex. Vioxx is a Merck (MRK) product
Note: News that I can’t figure out.

Rambus (RMBS) up 20.57% J.P. Morgan H&Q analyst Eric Chen wrote in a research note that even excluding royalties related to the lawsuit, Rambus is trading at a discount to its expected revenue growth in calendar 2001 and 2002. (J.P. Morgan has done underwriting for Rambus.)

Watch List things to watch but not trade

PSINet (PSIX) down 73.91% Predicts that it is likely that the company's common will have no value, and the indebtedness of the company will be worth significantly less than face value
Note: Predicted to go under and it nearly is done.

Semitool (SMTL) Company reaffirms guidance for the 2nd qtr issued on January 29. However, SMTL warns that the current sharp downturn in the semiconductor industry is affecting order rates and will likely diminish earnings and revenue in the 2nd-half of fiscal year 2001.
Note: Chip equipment makers still holding strong.

Goldman Sachs Analyst, Laura Conigliaro making sizable cuts to revenue and earnings forecasts for the enterprise server and storage companies, including BRCD, EMC, HWP, IBM, NTAP and SUNW. Cuts based on continued slowing in the U.S. and belief that this will spread to Asia and Europe. Estimates have gone to the low end of the range of expectations or below it in some instances, and are well below consensus forecasts. In the U.S. the slowing has spread to virtually all industries, while anecdotal evidence is beginning to suggest that the slowing is also spreading to parts of Asia and Europe.
Note: She been pounding the stocks above so news is not really news.

Intel (INTC) USB Piper Jaffray analyst Ashok Kumar fears that Intel shares could retest the valuation troughs of 1998 (20x TTM P/E). This suggests a price in the high teens. Analyst does not expect a sustainable cyclical recovery for the PC market until the 2nd-half of 2002.
Note: Kumar been wrong enough times.

Seitel (SEI) Suffering amid rumors that the quarter could come in light. SEI has begun to recover off its lows since CNBC reported that company knows of no reason for decline in stock. SEI is a provider of seismic data and geophysical services to the petroleum industry.
Note: A screen winner. No DD yet on it.

KLA-Tencor (KLAC) Company warns for Q3; sees revenues 8-10% below the $570-$580 mln guidance and EPS excluding non-recurring charges is expected to be below prior $0.58 guidance; current consensus EPS estimate is $0.51. "Business fundamentals for the semiconductor industry have continued to deteriorate throughout the quarter," stated Ken Schroeder, president and CEO
Note: Semis should be only 5% of your holdings.

EXFO (EXFO) Reports Q2 earnings of $0.14 a share, $0.04 better than the Zacks consensus of $0.10, vs year-ago earnings of $0.06; revenues rose 108.3% to $36.29 mln from a year-ago of $17.42 mln. Company raises FY01 revenue guidance to between $150 and $165 mln, and EPS has been increased to between $0.40 and $0.50 (consensus is $0.45).
Note: A good optical report. Will help the sector.

Solectron (SLR) Reports Q2 earnings of $0.30 a share, $0.01 better than the First Call consensus of $0.29, vs year-ago earnings of $0.19; revenues rose 85.5% to $5.42 bln from a year-ago of $2.92 bln; Company lowers guidance; sees Q3 sales of $4.1 to $4.5 bln, diluted cash EPS of 12 cents to 16 cents, and GAAP EPS of 2 cents to 6 cents. Current consensus estimate for Q3 is $0.31 on revenues of $5.57 bln
Company expects to reduce its work force by about 8,200 (about 10%) and take a charge of $300 to $400 mln in Q3

MiniMed (MNMD) In their afternoon call, Prudential reiterates STRONG BUY rating and price target of $55 after competitor, Disetronic, issues "Dear Patient" letter today related to potential leakage in pump housing; several pump wearers reported hypoglycemic events after swimming or bathing; news could shift market share to MNMD.
Note: It could raise fears that MNMD is next too.

Sun Microsystems (SUNW) had to shut down a manufacturing plant near San Francisco for about two hours on Monday during the latest rolling blackouts across California.
The plant houses several different business and manufacturing units, but was running again after the power outage. A sales and engineering facility in San Diego where the firm develops servers also temporarily lost power during the blackouts.
Note: CPN and others selling power to CA look better all the time.

The US faces a severe energy crisis and needs a new strategy to prevent supply falling far behind demand, Spencer Abraham, the US energy secretary, said on Monday. The energy sector in the US, the world's largest importer and consumer of oil, is "strained to capacity" and confronting its most serious shortages since the Arab oil embargo and petrol queues of the 1970s, he said. Mr Abraham used a speech to the US Chamber of Commerce in Washington to set out for the first time publicly the magnitude of the crisis the Bush administration believes it faces and the supply-oriented strategy it intends to adopt. A task force, chaired by Dick Cheney, vice-president, is to have the new policy ready in the next few weeks.
Attacking the Clinton government for taxing demand and neglecting supply, Mr Abraham said the administration would announce a strategy to address "antiquated" infrastructure, rising demand and falling supplies. "Our last recessions were all tied to energy crises," he said. There was "strong evidence" shortages and higher prices were hurting US business. While he disagreed with last weekend's decision by the Opec oil producers' cartel to cut production in a bid to boost prices, he said it showed the importance of increasing domestic production. On current trends the US would soon be importing nearly two-thirds of the oil it consumes. Mr Abraham said all energy sources would receive support, though he raised doubts that many of the tax incentives and subsidies proposed by the industry would receive administration backing.
Instead he stressed broad regulatory reform rather than financial support. The number of refineries had halved since 1980, he said. When President Bill Clinton last year released oil from the Strategic Petroleum Reserve to damp prices, it had to be sent overseas for refining. The US will need 65 new power plants a year to keep up with electricity demand. "This could be a conservative estimate," Mr Abraham said. He said drilling for oil on federal lands was restricted or forbidden. The administration is proposing to open a portion of Alaska's Arctic National Wildlife Refuge for drilling. The US will need massive construction of pipelines and transmission lines, costing $120bn-$150bn (£83bn-£104bn), he said. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3VSGRJIKC&live=true&t...
Note: Hmmm, The steel industry may get a lot of business as infrastrucure may accelerate.

Japanese government bond futures surged to a record high after the central bank's decision effectively to return to zero interest rates.
Note: More in previous post. A good step for them.

Trim Tabs said stock market liquidity dropped dramatically over the five days ended last Thursday. Large outflows from U.S. equity funds and $2.8 billion in new offerings drained cash from the market, the fund flow tracker said
Note: Yawn, no surprise

Quote of the Day

"Whether it was short-covering, an oversold bounce or a Greenspan-induced rally, it's hard to read too much into Monday's price action," remarked Bryan Piskorowski, market analyst at Prudential Securities.
"The debate rages on over whether we'll get a 50- or 75-basis-point move. Either way, the market's bottoming process will take place in its own right. There is no magic number from the Fed [that'll be a quick fix for stocks]," he concluded.
Note: I think we will rally harder with a 50 basis point cut as it will signal the economy is not in desperate shape.

Summary

Yep, when the PC ratio and the VIX both hit targets level, we can get a bounce toward the green as sure as me making my point on the dice table.

The trouble is that we are up on low volume. Some short covering. Apparently some on margin threw in the towel early and miss the whole thing.

Had to counsel a woman who lost 70% of her retirement by jumping in techs in 1999. She was up 25% at one time, but never once took profits. Now she want to go back in bonds. She doubled her money in CSCO only to see it get halved.

Jack

[jackhartmann]

Hi Goop, I haven't check LLL for a while. I've been watching the spy satilite news also. I was trying to remember the Falcon and the Snowman for the contrator that has the internals for the spy satelites in the 1970s. I figure BA will sub it out. Also, LU got a giant contract today.

Jack

[goop]

(LLL) L-3 Communications
seems to fit your qualifications (rev and earnings)(2.7bil market cap) and with the need of airline transportation upgrade and 2/3rds of their business
is US DOD contracts may make this company have a better
stock chart than most communication companies in the future.

Looking for a pullback and just keep this on the radar screen,
as most stocks.

Got even more interested when rumours of spy sat. contract with Boeing over the weekend. I always watch BA and thought
the right shoulder was gonna drop this to below 50,
maybe after Greenspeak tomorrow settles down, but I'm usually wrong. (hope I'm wrong)

[Mattu]

Fixed the title.

MB

[jackhartmann]

Update on Marketcaps, Growth
2/19/01
Sorted by market cap from yahoo, numbers in Billions
PE per Yahoo
Only those over 1B in cap tracked.
Y2y Rev growth per briefing using last quarter’s
Future growth per Zacks using FY2001
For those with FY2001 ending in Jun, FY2002 was used
Company Mrkcap PE Grwth Future
1)MSFT 305 31 7 5 Gained 70B in cap
2)CSCO 203 69 54 30 Dropped 70B in cap
3)INTC 231 22 6 -30 Big 27% drop in growth
4)IBM 201 25 5 12 Gained 60B in cap
5)AOL 206 109 27 44 Gained 109B in cap
6)ORCL 134 21 14 21 Dropped 40B incap
7)NOK 124 35 45 20 Dropped 80B in cap
8)EMC 118 67 39 30 Dropped 40B in cap
9)T 81 22 3 -31
10)SUNW 75 36 43 26
11)ERICY 70 33 11 42
12)HWP 64 22 2 1
13)TXN 63 21 15 -18
14)NT 61 na 34 28
15)Q 61 81 9 1 PE too high for growth
16)QCOM 60 584 -10 18
17)DELL 60 28 27 11
18)ALA 49 41 26 23
19)JDSU 46 na 228 25
20)WCOM 45 11 15 -21
LU 43 na 26 -137
MOT 40 31 11 -2
AMAT 39 18 58 -16 big drop in earnings est
CPQ 37 67 10 22
VRTS 30 na 63 50
GLW 30 70 52 14
SEBL 27 327 110 101
JNPR 25 188 550 91
MU 25 16 15 -32 big drop in ests
CIEN 24 197 131 113
PCS 22 na 83 42
A 22 30 37 36
SLR 20 34 100 26
TLAB 20 27 42 29
CHKP 20 107 106 50
NXTL 19 na 50 144
BEAS 19 na 77 53
GMST 18 2623 -1 17 Seems high
BRCM 17 na 132 40
ADI 17 26 57 25
ITWO 15 na 115 41
YHOO 15 281 53 -23
GX 15 na 15 -17
FLEX 15 na 90 35
EBAY 13 283 81 82 seems high
NTAP 13 147 90 94
AMCC 13 na 213 43
PALM 12 210 102 64 big jump in estimates
ALTR 11 23 55 6
BRCD 11 191 339 120
VRSN 11 na 613 -19
LVLT 11 na 150 -84
VTSS 11 333 84 47 Seems high
EXDS 8.8 na 176 -27 big drop in growth
ADBE 8.7 32 26 17
PMCS 8.5 144 152 2 Big drop in growth
SFA 8.3 30 69 17
KLAC 7.9 22 73 -18
AMD 7.4 8 21 -17
ATML 6.8 26 47 51
XOXO 6.6 na 181 -50
WCG 6.6 na 80 -258
LSI 6.5 29 28 -5
AAPL 6.5 18 57 -105
SCMR 6.3 504 413 50
MERQ 6.3 112 62 33
SONS 6.3 na na 95 seems high
AMT 6.2 na 209 17
MFNX 6.2 na 383 -183
NVLS 6.0 24 121 22
ONIS 5.8 na 2147 78 seems high
ARBA 5.4 na 624 265
RBAK 5.3 na 339 92
JBL 5.3 32 63 26
CORV 4.9 na na 62 growth up, cap down
AMZN 4.8 na 43 31
QLGC 4.7 83 72 40
CMRC 4.6 na 1033 104
RMBS 4.5 na 190 121
TIBX 4.4 na 213 31 cap dropped in half
HAND 4.1 na 623 112
CNXT 4.1 na 19 -134 seems high
RIMM 3.7 1077 160 381
EXTR 3.4 167 163 95 seems cheap
FNSR 3.3 na 177 66
EMLX 2.8 58 111 27 cap dropped in half
RFMD 2.5 47 9 7 seems high
BVSN 2.4 na 212 43
WIND 2.3 na 37 51
NUFO 2.3 na 394 188 cap flat, growth up
AKAM 2.3 na 1279 50
ATHM 2.3 na 31 41
AVNX 2.3 na 637 163
STOR 1.9 na 577 31
PWER 1.8 42 109 40 seems cheap
NETE 1.7 780 345 520
FDRY 1.6 20 90 0 dropped half of cap
INKT 1.6 na 122 -29
VIGN 1.4 na 202 137 cap dropped in half
RNWK 1.3 na 34 -31
BKHM 1.2 na 454 51
INRG 1.2 84 48 na
AETH 1.1 na 537 -82
WFII 0.9 36 124 165

Dropped coverage
SAWS, SSTI, PRSF, MRVC, KOPN, BRZE, MTSN

Jack

[jackhartmann]

KOPN CC
Pr Stuff
Revenue increased 81 percent to $24.6 million compared with $13.6 million for the same period in 1999. -- Product revenue increased 84.6 percent to $24.0 million in the fourth quarter from $13.0 million for the same period a year ago.
Net income increased 343 percent to $3.4 million, or $0.05 per fully diluted share, from net income of $776,664, or $0.01 per fully diluted share, in the fourth quarter of 1999. Net income for the fourth quarter of 2000 excludes a charge of $7.4 million, or $0.11 per share, for write-off of in-process R&D and related acquisition costs of Super Epitaxial Products.

Revenue from III-V products increased 64 percent to $18.2 million from $11.1 million for the fourth quarter of 1999. (Note:Kopin will use the term "III-V" to incorporate the breadth of its semiconductor processes, including GaAs HBT and its newly introduced carbon-doped Indium Phosphide HBT).

CyberDisplay(TM)product revenue increased 190 percent to $5.8 million from $2.0 million for the fourth quarter of 1999.

Commenting on the outlook for Kopin's business, Dr. Fan said, "Our CyberDisplay business should produce another solid year in 2001. With the advent of miniature DVD and video game technology, we expect to continue our penetration into the consumer electronics market both in the U.S. and abroad, and should begin to see demonstration units of 3G technology by the end of the second quarter. However, for the first quarter of 2001, we expect CyberDisplay revenue to decline sequentially because of softer-than-expected consumer electronics sales and an unsettled supply agreement with one customer.
"In our III-V business, general economic conditions and much weaker-than-anticipated handset sales have made our short-term outlook cautious," Fan continued. "In particular, forecast revisions by a number of handset OEMs, coupled with excess inventories industry-wide, will adversely affect our revenue in the first half of 2001. Consequently, we expect first-quarter revenue in the range of $12 million to $14 million, and a net loss in the range of $0.09 per share to $0.12 per share.
However, we expect that growth rates for the second half of 2001 should be in line with the first half of 2000. Our new III-V products should enable Kopin to capitalize on emerging trends in the fiber-optic industry and strategically position the company for the eventual rebound in wireless handset manufacturing."

CC Notes
Dr. Fan
- very challenging economic environment
- 24.6M in rev, up 81% y2y
- 18.2m for III-V products
- 5.8M in Cyberdisplay rev
- 3.3M in net income or 0.05 EPS
- Highlights: Optical communication product group created
- CXNT and NT relationship continue
- Matshushita, Samsung are customers.
- Shipped 1 millionth cyberdisplay in August
- III-V – completed Super Epi acquisition
- newly introduced carbon-doped Indium Phosphide HBT (or called GAIN) for OC-768 use and 3G wireless phones.
- KOPN and Rockwell introduced first commercial HbT product in the world.
- Cyberdisplay going to PDAs, been sampling to customers and feedback is positive.
- Resolved Cyberdisplay supply issue
- Financial overview
- 24.6M in revs and up 4% q2q
- 22.0M in product rev, 3% q2q
- III-V was 18.2M flat q2q
- Cyberdisplay 5.9M up 92% q2q
- Netincome was 3.3M,
- EPS was 0.05 vs. 0.06 last q.
- 73.8% cost of goods sold
- R&D was 5.6%
- SG&A 13.5% of rev, increased to amorization of Super Epitaxial acquisition
- Oper Income was 1.9M vs. 2.9M last q
- Super Epitaxial will be 5 cent dilutive to earnings for 2001
- 73.2M in cash, equities
- Debt 1.2M
- 15.3M in acct rec,
- 69 DSO
- 46% CXNT, 16% Mitshubishi
- Handset affecting HbT sales
- Fiber optics remain on track
- Cyberdisplay will be down due to one customer slowdown
- 0.09-12 loss EPS for next quarter
- Anticipate rebound second half in wireless handsets
- Dr. Fan objectives
- We are market and technology leader in our product and will invest to keep our technological edge
- Wireless, Fiber optics and minuature displays are focus area
- Economic pressure created significant declines in last several weeks.
- Q&A
- CSFB – congrats – Super Epi acquisition and GAIN?
- A: Super EPI has helped us in it, Looks at new products better.
- Reduce voltage with N2 addition?
- A: yes, we decreased about 150-170 mV, question with how much it can go in a PA. If we have a two stage amplieflier, we use a 3 volt battery. We are going activity to persue 2.7V phone which is in demand.
- Why no weakness in OC-192?
- A: We don’t think be a decrease but not much inventory to NT.
- Monet – Outlook for q1?
- A: We saw dropoff in the last 2-3 weeks. One customer substantially reduces and also another too.
- CNXT buying less?
- Expect for fiber optic, demand is slowing across the board. Some believe a rebound in q3.
- Lost clients?
- More a volume issue. There volume growth has change
- Sandy Harrison – 10% customer for q
- CXNT 38%, Mitsubishi 12%. Some others were getting close to 10%.
- Not seen weakness from NT?
- Fiber optics see no weakness so far.
- Optical %?
- 16% of revs
- Availability of substrates?
- We see always a challenge, but market is softening. Our supplier considering it a strong business.
- InPh?
- A: Coming on much faster than anyone thinking of it. Going to be important for OC-768 technology. InPh uses 1.5V vs. 3V. The questions is the cost. Will go in production late this year. Availabiliy of substrate depends on substrate manufacturer to ramp it up in 6 months. Manufacturing of InpH can be changed from current 4 inch GaAs fabs. We can grow InPh in our current system. Botleneck will be substrate mfrs.
- When Clear up Cyberdisplay supply issue?
- Did it all quarter, finished at the enfd of q
- Capacity?
- New facilty about ready to be moved into. Shifting to fiber optic items and hope to introduce these products the second half. Moving scientists and engineer into new product developments. Not going to ramp up HbT capacity.
- Nonrecurring items?
- 500K will be superEpi acquisition will be reoccuring, 500K in InPh patents, more marketing in 3G phones for 3G phones in Japan
- Pricing for HbT wafers?
- In line with projections. ASP %625, Will decline 10-15% in 2001 as standard in the semi sector. Customers want pricing releif of 10-15% more.
- Cyberdisplay breakeven?
- Good question, discussing price vs. quanity with vendors. Trying to expand into camcorders, but customers want pricing relief. Debating if we want to go that way. Most want B&W cyberdisplays.
- Losses in cyberdisplay?
- 30% in operating Margin, lost 2M overall.
- 3G design wins?
- Focusing on 3G phones in Japan since first to come out with it with NTT Docomo. No announcements since sensitive now. Color video phone is the future demand. Our display good for this. The margin is very good.
- Carl Mooney – cyberdisplay can it go away if KOPN no reduce price.
- Two customers satisfied, third wants ramp up with comensurate decrease in price. We are focusing on phone. Cautiously optimistic that we will get their business. Will finalized in next few week whether we go with third customer’s demands.
- III-V?
- Rev growth for first q will be 50%, Second quarter will be flat, see growth in second half.
- CIBC – InGap?
- Ingap (optical ) has partially increased. Customer want low cost for their customer.
- 6 inch production?
- Qualifying two more 6 inch machines and should produce rev in second quarter. Should be nmaterial rev.
- GAIN vs. competition?
- Shipping production for GAIN is not clear due to visibilty. People are sampling product. InPH will come out this year. GAIN will come out late this year or next year.
- Supply dispute on cyberdisplay?
- Not a dispute, negotiaton on volume vs. price. We priced cyberdisplay to gain share in camcorders. Target is the phone not camcorders.
- Cashflow?
- 2.5M in depreaiton and amorization. We generated 2M in cashflow for the quarter and negative for next two quarters. Cashflow positive second half.
- III-V and Cyberdisplay GM?
- Cyberdisplay GM target is 35%, III-V is 40-45% GM longterm
- Rev guidance?
- Rev for HbT will be down 50% q1 and sequentially flat in q2. Rebound second half.

See prev post for last q CC notes

CNXT is the albatross on KOPN’s neck.

Jack

[jackhartmann]

Screening through some stocks
Every 4 months or so, I try to screen through stocks of a wide cross section to get a feel what area is strong.

1) PE lower than last quarters net income y2y growth rate. No net losses or declines in net losses.

Fail: DELL, BGP, NTAP, GLW, PALM, DCI, X, PHA, PFE, MDT, CAT, AMCC, BRCM, CSCO, ITWO, MRVC, PMCS, RMBS, SEBL, ACPW, BLDP, EFCX, HPOW, IMCO, PLUG, SATC, GMST, JDSU, QCOM, WIND, ABUY, DTOX, GECC, THFZ, CXNT, CUBE, EXDS, GSTRF, GX, LNOP, LOR, LU, MFNX, NEON, NOVL, NSM, NT, NUFO, PCS, STOR, TERN, TSIX, WCOM, XLA, XLNX, SCMR, AVCI, AVNX, LVLT, MCLD, MONI, Q, XOXO, VRTS, ENE, CPST, XXIA, RFMD, CPQ, CHINA, ISLD, DITC, EK, TXU, FNSR, EXTR, HAND, RIMM, IART, ISIL, ININ, KLIC, LIOX, INCY, MLNM, MLTX, NMSS, NTCT, NSIL, ONIS, PUMA, OPLK, OPWV, SNE, SNCI, SONO, VIRS, TUTS, ZANY, FLEX, UAL, YHOO, EMKR, TIBX, DOW, MSFT, IBM, AOL, NXTL, VRSN, SYMC, ARBA, VTSS, QLGC, RBAK, CORV, AMT, WCG, T, GTW, AAPL, CMRC, SONS, VIGN, AKAM, INKT, ATHM, BKHM, AETH, INRG, SLAB, FFIV, ALL, BJ, SO, AEP, MIR, XEL, ED, CIN, EXC, PPL, DTE, CEG, FE, BMCS, BBY, TOY, SPLS, LOW, DPH, NSC, ACI, BK, BUD, CEPH, CHTR, CMH, CVS, DNA, ECL, EV, FLM, GLM, HSY, IMCL, JPM, KDN, KMB, KMI, LNCR, MCO, MO, NOI, OXHP, PNC, RATL, RCGI, RSAS, SWY, THC,

Pass: BRCD, DRMD, ORCL, INTC, DELL, SCHL, UCL, UPS, CIEN, CREE, MNMD, NEWP, SUNW, AVA, IDA, UTX, EMC, SNDK, A, ADI, ATML, CY, EDS, LSI, MOT, WFII, JNPR, ALA, TQNT, TXCC, C, EPG, CCMP, APC, PTEN, BRZE, KOPN, AHAA, CPN, CYTC, EMLX, FDRY, JBL, CLS, SLR, HSE, MARY, SUN, IRF, KEM , AVN, AVX, VSH, AMD, MTSN, METHA, MET, DE, OCPI, PRSF, SFA, SSTI, TWAV, TSTN, SAWS, SANM, CAMP, NETE, DD, OLN, NOK, ERICY, TXN, BEAS, TLAB, CHKP, ALTR, EBAY, KLAC, NVLS, AMAT, PWER, RNWK, JNIC, ABK, ACF, AES, BARZ, REI, WMB, NRG, ORN, DUK, CD, CMCSK, CVC, DVN, DYN, ESV, EVG, FBF, HRC, IDTI, KRB, LEH, MND, NBR, NDE, NE, OCA, OSCA, RDC, RHB, SEI, TYC, UTI, WW, XOM

2) No red single stick for largest volume day in three months. Been one of my negative indicators.

Fail: BRCD, ORCL, INTC, CREE, SUNW, IDA, EMC, SNDK, A, CY, MOT, WFII, JNPR, TQNT, TXCC, EPG, CCMP, APC, PTEN, BRZE, KOPN, CPN, EMLX, FDRY, JBL, SLR, MARY, KEM, AVN, VSH, SSTI, TSTN, SAWS, SANM, NETE, OLN, NOK, ERICY, TXN, BEAS, CHKP, ALTR, PWER, RNWK, JNIC, ABK, AES, BARZ, REI, DUK, CD, CVC, DYN, ESV, HRC, IDTI, MND, MBR, NE, OCA, RDC, TYC, WW, XOM,

Pass: DRMD, DELL, SCHL, UCL, UPS, CIEN, MNMD, NEWP, AVA, UTX, ADI, ATML, EDS, LSI, ALA, C, AHAA, CYTC, CLS, HSE, SUN, IRF, AVX, AMD, MTSN, METHA, MET, DE, OCPI, PRSF, SFA, TWAV, CAMP, DD, TLAB, EBAY, KLAC, NVLS, AMAT, ACF, WMB, NRG, ORG, CMCSK, DVN, EVG, FBF, KRB, LEH, NDE, OSCA, RHB, SEI, UTI,

3) Barchart.com Buy

Fail: DELL, SCHL, UCL, UPS, CIEN, MNMD, NEWP, AVA, UTX, ADI, ATML, EDS, LSI, ALA, C, CYTC, CLS, AHAA, SUN, IRF, AVX, METHA, MET, DE, OCPI, PRSF, SFA, TMAV, CAMP, DD, TLAB, EBAY, NVLS, AMAT, ACF, ORG, CMCSK, FBF, KRB, LEH, RHB,

Pass: DRDM, HSE, AMD, MTSN, KLAC, WMB, NRG, DVN, EVG, NDE, OSCA, SEI, UTI

4) EBITDA positive so they can fund their own expansion.

Fail: NDE,

Pass: DRMD, HSE, AMD, MTSN, KLAC, WMB, NRG, DVN, EVG, OSCA, SEI, UTI,

5) EPS estimates raised in last 90 days for annual.

Fail: KLAC, AMD, DRMD (has no info)

Pass: UTI, SEI, OSCA, EVG, DVN, NRG, WMB, MTSN, HSE,

Hmmm. UTI, SEI, OSCA, EVG, DVN, NRG, WMB, HSE are energy play. MTSN is one own before.

Will listen to the CCs and narrow down some more.

Jack

[jackhartmann]

B)Caterpillar CC Notes and other
Rated a BUY with stop loss at $34.
Jim Anderson – Dir investor Relations

Linda Peters – CFO

- 5.11B for q
- 0.76 EPS for q
- 11% increase in financial products
- Engine sales down in all regions except asia
- Demand for power units remain strong
- Inventory down 125M in US
- Outside US inventories also down
- Profit increased due to increased volume
- Currency translation impacted 2 cents for the q.
- SGA was flat y2y
- NA rental fleet 64% run rate same as y2y
- Dealer rental up 9% y2y
- Seeing Cat rental stores up 45%, Added 60 stores and 295 total.
- 110 stores internationally
- NA used equipment prices strong but trending down as economy slows
- Acquired Pioneer Equipment – Foresty Equipment
- Announced a global mining division formation
- Engine business – truck engine down 17% y2y, truck build rate will drop further then level out and go up due to interest rates dropping and lower fuel cost
- Electric power business up 20% y2y, distributed generation growing faster market
- CAT elec rental grew 20%
- We expect 20% y2y growth in electric power for five years. Increased in electricity, shortfall in electri, and more desire for efficient electric.
- Petroleum demand picking up and will grow this year.
- Growth will be flat in first half and pick up later. Profit will drop 5-10%, due to global factors, unfavorable tax rate, and slowing NA sales
- SGA 11.5-12% target
- R&D 3-4%
- 32% tax rate
- 1.05B in capex for 2001
- Dealer inventory down overall. 2001 should decrease 300M worldwide
- The economic was challenging, US slowdown, instability in Asia, still made 1B in 2000
- Q&A
- USBW – Strat investments?
- A: 6 sigma initiative, e-business, supply chain management, trying to reduce long term cost structure, will see an increase in SGA due to these.
- SSB – 2001 guidance 2.70-2.85 EPS, maybe some upside due to pension and euro
- A: Currency was unfavorable in 2000 and probably unfavorable this year, pension will have no upside. Be minor if at all. Maybe about 30 cents to year number.
- 125M increase in SGA this year?
- A: probably true going from 11.1% to 11.5-12.0%. We knew we had to spend money upfront to reduce cost structure in the long run.
- CSFB – Machinery and engine profit in fourth quarter, profit doubled y2y?
- A: It doubled due to volume and cost reductions on the material purchase side. We expect NA to decline and that hurts us since NA has higher margin.
- Engine profitability was impressive considering sector collapse, are we seeing margin gains?
- A: Heavy duty trucks was half y2y, 150K units for 2000. It might drop to 125K rate and then build up to 175K at the last half. Projecting less than 150K for 2001. It will hurt us in total operating margin, but offset some by power generation and oil/gas business.
- EM – Retail sales up 2-7% in total, what won’t it increase for 2001?
- We think down in NA due to slowing economy, and up outside in US. Net will be up slightly.
- Interest rates declining, so should be up in NA?
- It takes 6-9 months for interest rates to play through for us. It will be late in the year before we see the effect.
- Won’t customer be affected in replacement decision this year?
- A: It takes several months. A lot of concern from contractors for economic condition in 2001. Business confidence need to improve and we haven’t seen it. Will see NA decline.
- Currency hit EPS 15 cents?
- A: Yes. Bulk of the number was currency.
- MR – capex up 200M?
- A: No adjustment for software. It goes from other assets property & plant.
- Profit down 5-10%?
- A: Yes. This is an EPS number and will repurchase share. Third year of five year plan to purchase shares. Repurchased over 10M shares in 2001
- GS – rent to rent free for 2001?
- A: Not specific forecast this, but it has been dropping. Probably flat to down for 2001.
- Rental strategy?
- A: As we evaluate the distribution strategy, we are doing the best for our customers.
- SSR – why profits down 5-10% for 2001?
- A: Tax adjustment in 2000 was 11 cents. Growth in SGA will hit it. We anticipate taking additional cost reductions. (analyst is very sarcastic). No going in more detail.
- Will your senior management listen to the CC and understand how we feel?
- A: Yes.
- GS – seeing receivable in financial?
- A: It was growth in portfolio. We see it growing at strong rate.
- Inventory was suppose to be down 300M?
- A: Yes, NA was 50M short in sales.
- LM – Bearish in area that should be bullish and vice versa, what’s up?
- A: NA is slowing. We need to see improvement in the US market regardless of fed action. Contractors must be confident before they will buy.
- Dealers in driver seats?
- A: 3.0 months of supply. Should get in down 2.6 in NA. Dealers and CAT are partners to improve lead times to reduce inventory since it is not a paying asset for the dealers.
- Investco – Said sales declining, how going to reduce inventory?
- A: Will follow economic situation. Only in NA is retail sales going down. As we move beyond 2001, the inventory will be based on 2002. Seasonally the inventory increase the first half of the year.
- Cash flow – where is software spending since?
- A: Other assets. Not sure where it is in the proxy. Other net line. Less than 100-200M this year, will increase it this year.
- Ramping spending to reduce cost over 5 years. Only 5-7% cost reduction. Isn’t there more that can be done. Seems like keeps up with inflation.
- A: It is a billion plus. Will be up more than 5-7%. We have been offseting inflation and took 100M in costs out.
- ABB – Strat investments – earning would be up if not for SG&A? Reducing headcount? DCX relationship?
- A: DCX not finalize until q2 of this year. Joint venture in medium duty fuel engines. Six sigma initiative will require 1000 people working on this. They will reduce cost and improve quality. These employment is not additive. No total reductions.
- Why will earning decline if improved mix?
- A: Downturn in NA, absence of tax adjustment and 6 sigma initiative.
- INGB – Less discounting improved margin yet pricing remain competative?
- A: We see competative pricing throughout world. Nominal price increase.
End of Q&A.

Caterpillar Inc. operates in three principal business segments: Machinery, Engines and Financial Products. The Company's products are sold primarily under the names Caterpillar, Cat, Solar, Barber-Greene, MaK, Perkins, F.G. Wilson and Olympian. The Company's machinery includes construction, mining, agricultural and forestry machinery. Caterpillar designs, manufactures and markets engines for the Caterpillar Machinery division, on-highway trucks and locomotives; marine, petroleum, construction, industrial, agricultural and other applications; electric power generation systems; and related parts. The Company provides financing to customers and dealers for the purchase and lease of Caterpillar and non-competitive related equipment, as well as some financing for Caterpillar sales to dealers

Insider: 13% · Over the last 6 months:
· 2 insider buys; 6,000 shares · Institutional: 64% (74% of float)
(1,025 institutions) · Net Inst. Buying: 10.2M shares (+4.43%)
(prior quarter to latest quarter)

52-Week Low on 29-Sep-2000 $29.00
Recent Price $42.68
52-Week High on 4-Jan-2001 $49.625
Market Capitalization $14.7B
Shares Outstanding 343.8M
Float 299.1M
Price/Book (mrq) 2.62
Price/Earnings (ttm) 14.14
Price/Sales (ttm) 0.74
Annual Dividend (indicated) $1.36
Dividend Yield 3.19%
EBITDA (ttm) $2.42B
Income available to common (ttm) $1.05B
Debt/Equity (mrq) 2.69
Total Cash (mrq) $334.0M
Short Interest As of 8-Feb-2001 Shares Short 3.54M Percent of Float 1.2% Shares Short
(Prior Month) 5.24M

CAT has made its numbers for at least five straight quarters.

20-Feb-01 Caterpillar (CAT) 43.30 - 0.82: Bear Stearns downgrades to ATTRACTIVE from BUY. Analyst cuts EPS estimates to $2.90 this year from $3.00 and introduces a 2002 estimate of $3.70, or 30 cents lower than originally intended. GE (GE) announced last Friday that it intended to aggressively target CAT's Solar division dominance of the <10 MW oil and gas engine market through a series of new product introductions slated for this year and next. Last week's announced truck engine alliance between PACCAR (PCAR) and Cummins (CUM) could also pressure CAT in an important market where it has been taking sizeable share in recent years.

18-Jan-01 09:34 ET Caterpillar (CAT) 45: Issue indicated to open between $39-$41 after warning of flat 2001 revenues.

22-Nov-00 08:11 ET Caterpillar (CAT) 38 1/4: Enters 50/50 global alliance with DaimlerChrysler AG (DCX) to develop medium-duty engines, fuel systems and other powertrain components for third-party customers. CAT expects deal to be immediately accretive and to appreciably increase company's profit per share over the next several years.

Note: MOT uses Six sigma and some chemical plants I been in. Not sure I buy it.

Summary

Looks tempting but still up 30% since Oct. lows. An interesting way to play the energy sector. Also inventory reduction is a change from listening to too many CC in tech. I’ve been in the Montgomery plant. The Dekalb plant seems to sit on inventory. The strategy of targeting the rental one is intriguing since there are several rental houses making a fortune. CAT would be the first big player to compete ala Walmart and the local retail store. Will sleep on it. The Bear Stearn dip is really an opportunity to buy and threats often do not materialize as planned. Value chains have to be formed and CAT has them.

Jack

[jackhartmann]

B) DRMD DD and CC
Rated a BUY
PR stuff
CINCINNATI, Feb. 28 /PRNewswire/ -- Duramed Pharmaceuticals, Inc. (Nasdaq: DRMD - news) announced today its results for the fourth quarter and fiscal year ended December 31, 2000. For the fourth quarter 2000, net sales were $23.8 million as compared to $15.9 million in the fourth quarter 1999. Net income for the period was $1.5 million, or 6 cents per share, compared to a net loss of $12.3 million, or 53 cents per share for the same period last year. For the full year 2000, net sales were $83.5 million, compared to $50.2 million for 1999, a 66 percent increase. Net income for the year 2000 was $164,000, or 1 cent per share, as compared to a net loss of $51.3 million, or $2.36 per share, for 1999.
E. Thomas Arington, Duramed Chairman and Chief Executive Officer said, ``The fourth quarter 2000 completed a solid year of progress for Duramed and marked the third consecutive quarter of sales and profit increases. The improvement throughout 2000 was led by solid oral dose hormone products and complemented by increased sales of other high-margin multi-source products.
``We are especially encouraged with the growing franchise that Cenestin® (synthetic conjugated estrogens, A) Tablets represent. From October 2000 through January 2001, total monthly new prescriptions were 20,000, 21,000, 26,000 and 33,000, respectively, representing growth of 65 percent. Based on 20,887 total prescriptions filled for the week ended February 16, 2001, Cenestin revenues are annualizing at approximately $22.4 million.
``We believe that the company is well-positioned for continued growth, led by currently-marketed hormone products and those that are expected to be approved in 2001 and beyond. The Cenestin family of products represents our most significant long-term growth opportunity and will require significant time and investment spending; in 2001, we intend to increase our research and development spending in order to build these products and concurrently intend to look at partnership opportunities for them.
``Turning to our ANDA (Abbreviated New Drug Application) pipeline, we now have five products filed and plan to file eight more products in 2001. We are pleased to report that we have received notification from the U.S. Food and Drug Administration (FDA) that we have first-to-file status on two hormone product applications. As evidenced by the success of our Apri(TM) (desogestrel and ethinyl estradiol) Tablets, being first to file is important in establishing market leadership.''
Fourth Quarter Results
Fourth quarter 2000 revenue of $23.8 million was split evenly between hormone products and non-hormone products. Hormone product sales for the fourth quarter of 2000 were $11.9 million, as compared to $8.4 million in the fourth quarter 1999 and $12.4 million in the third quarter 2000. The third quarter 2000 amount includes $2.0 million to recognize the final deferred revenue from the original Cenestin pipeline fill. Commencing with the fourth quarter 2000, Cenestin revenues are based on actual shipments. Cenestin shipments were $4.0 million in the fourth quarter, as compared to $2.2 million in the third quarter 2000.
For the quarter, gross profits totaled $10.2 million, representing 43 percent of net sales, an improvement of 93 percent, or $4.9 million, over fourth quarter 1999. In addition to the increase in gross profit, income for the quarter was positively impacted by the agreement reached with Solvay Pharmaceuticals whereby, effective January 1, 2000, Solvay Pharmaceuticals assumed responsibility for the Cenestin physicians' office promotion in exchange for a share of the Cenestin profits. As a result of the agreement, Duramed's brand marketing expenses in fourth quarter 2000 (which represent Solvay Pharmaceuticals' share of the Cenestin profits) were $2.7 million as compared to fourth quarter 1999 when Duramed incurred an expense of $10.2 million for the promotion of Cenestin.
Product development expenses for fourth quarter 2000 were $1.0 million, $700,000 less than fourth quarter 1999 due to the timing of biostudies and the savings realized by the consolidation of product development activities into the company's Cincinnati facility.
General and administrative expenses were $2.9 million, approximately $1.0 million less than fourth quarter 1999 due to 1999 expenses for Y2K compliance and a non-cash charge for stock options issued to non-employees.
Full Year Results
Revenue for the twelve months ended December 31, 2000, was $83.5 million with the increase over 1999 ($33 million, or 66 percent) being due primarily to Cenestin and Apri. The year 2000 marked the first full-year contribution for each of these products (as Cenestin was launched in May 1999 and Apri was launched in October 1999).
Gross profit for 2000 was $35.1 million, or 42 percent of net sales. This compares with $10.5 million in gross profit for 1999. This improvement was due primarily to increased sales of Cenestin, Apri, and other high-margin multi-source products. For the year 2000, brand marketing expenses were $10 million compared to $21 million in 1999 as a result of the aforementioned agreement with Solvay Pharmaceuticals.
Product development expenses in 2000 were $3.8 million, $3.4 million less than 1999 due to a reduction in biostudy expenses, the termination of the Tamoxifen project, and the savings realized by consolidating the company's product development activities in Cincinnati.
For the year, interest expense was $5.3 million, representing an increase of $1.7 million over 1999 interest expense of $3.6 million. This increase was due primarily to increased debt resulting from the refinancing of the company's Cincinnati manufacturing facility ($12 million of new debt) and increased borrowing on the company's revolving line of credit.
Duramed's working capital improved substantially from $2.6 million at the end of 1999 to $24.8 million at the end of 2000. As of December 31, 2000, shareholders' equity was $6.2 million compared to a deficit of $2.3 million as of December 31, 1999. Long-term debt has increased from $31.6 million as of year end 1999 to $40.7 million as of year end 2000 due primarily to the refinancing of the company's Cincinnati manufacturing facility.
Mandatory Redeemable Convertible Preferred Stock outstanding as of December 31, 1999, was converted into 1.3 million shares of the company's common stock. Also during 2000, the company issued $10 million of Series G convertible preferred stock, which is convertible into common stock at $5.06 per share.
Common shares outstanding at December 31, 2000, increased to 26.4 million from 24.8 million at December 31, 1999, due primarily to the conversion of the preferred stock.
Pipeline
Of the five products awaiting approval at the U.S. Food and Drug Administration (FDA), two represent ANDAs for which Duramed was first to file. In 2000, the combined brand product sales for these two products was approximately $250 million.
The company's filing on Mircette(TM)(1), one of its first-to-file products, is currently under litigation. The Mircette patent is held by Biotechnology General Corp., which has filed suit for declaratory and injunctive relief claiming Duramed's product infringes its patent. Duramed is vigorously defending this lawsuit, claiming that the patent at issue is invalid and not infringed. The Waxman-Hatch Act provides that Duramed will be awarded a 180-day period of generic marketing exclusivity should it prevail in the lawsuit.
In 2001, the company expects to file five additional ANDAs for hormones, including a progestin, an estrogen, and three oral contraceptives. Duramed also anticipates filing three non-hormone ANDAs.
Further, Duramed has four products, in various stages of development, that will likely be filed as New Drug Applications (NDAs). These products, including the combination of Cenestin with a natural progesterone, if approved, will expand the Cenestin brand franchise. Evaluation of the potential for patenting the technology used to develop these extensions of the Cenestin franchise is also in-process.
Completed Cenestin Phase IV Studies
The company remains committed to educating the scientific and lay communities about the advantages of the Cenestin product. Preclinical studies of Cenestin's ability to protect neurons from toxic agents believed to play a role in the development of Alzheimer's disease have been completed very recently. Results of these studies in neuroprotection and implications for memory have been positive, and Duramed is continuing work with researchers to gain more information in this area. Studies have also recently been completed showing Cenestin's positive impact on increasing bone strength and resistance to fracture in an animal model. In human trials, Cenestin has been shown to reduce bone turnover, favorably affecting markers of bone resorption and formulation. Additionally, Cenestin has been shown to have a beneficial improvement on lipid parameters, an important factor in the reduction of cardiovascular risk. Other phase IV studies will continue as part of Duramed's efforts to display all of Cenestin's expected beneficial attributes.
2001 Outlook
For the year 2001, Duramed expects net sales to be in the range of $110 million to $130 million. The company also anticipates net income before taxes to range between $7 million and $9 million. Hormone sales are expected to account for approximately 65 percent of the company's revenue stream.
Some of the factors that may positively affect these ranges include receiving approvals on key products earlier than anticipated; capturing greater-than-anticipated market share with current products; faster-than- projected Cenestin growth; and expanding the current product line through partnership(s). Some factors that could negatively affect these ranges include significant price erosion; changes in market share; new generic competition that has not been anticipated; and/or if the company should decide to invest more heavily in its R&D pipeline.
The company will continue to leverage its formulation and production capabilities to pursue opportunities for both branded and multi-source products in the women's healthcare market, as this field offers significant profit potentials. Duramed's top priority will be to focus on solid oral dose hormone products developed in-house. The company also plans to enter into strategic partnerships, where possible, so as to expand its product development capabilities.
Such partnering may occur in order to fund clinical studies that require large financial commitments. Other R&D projects will be funded internally, and Duramed's R&D spending in 2001 is projected to be approximately $10 million as compared to $3.8 million spent in 2000.
Additional Cenestin Phase IV Studies
As evidenced above, the company has initiated a comprehensive phase IV research program to investigate the potential multiple benefits of Cenestin. Studies highlighting the benefits of the product in the central nervous system, in bone metabolism and strength, and in the cardiovascular system are critical components of this research program. These types of projects are expected to commence in 2001.
Further, Duramed has shown that the patented formulation of Cenestin and its unique state-of-the art manufacturing process result in a product that provides consistent, predictable disintegration and dissolution in an in-vitro model. Blood levels that result from Cenestin treatment have also been shown to have favorable low variation. To ascertain the clinical significance of these observations, Duramed is supporting a major independent investigation to evaluate the actual experiences of postmenopausal women who have been treated with Cenestin and other estrogen replacement therapy (ERT) products.

CC Notes
Lisa Carlson Wilson – IR Insight Communications
Thomas Arington CEO
- Will be at SSB on March 9
- BOA March 12
- USBW late May
- Returned to profitability
- Entered into partnerships
- Strongly believe future is strong
- Tim Holt CFO
- Net 1.5M or 0.06EPS
- Solvay assumed Cenistin
- 23.8M in rev
- 4M in Cenestin sales – solely from actual shipments
- 11.9M non hormone sales due to seasonal cough cold products
- 43% GM
- Op inc 3M vs loss y2y
- Marketing 2.4M vs. 10M y2y, now Solvay markets in exchange for profits
- 1.1M in selling expenses
- GA was 2.9M or less than y2y
- 1.2M in interest expense
- 4.7M in acct rec
- 164K in net profit 0.01EPS
- 10M in marketing expenses for 2000
- 7M payment to Shine Pharmacuetical to settle lawsuit
- Tom
- Financial position improved due to Solvay and Focus on hormones, and marketing of higher margin products
- Cenestin growing fast 20K, 21K, 26K, 33K, per month since Oct2000-Jan2001. 22M in annually rev projected
- Patent protection until 2015
- Beating three other products launched at similar time
- Phase IV study will include several like cerebral blood flow.
- Focusing on women bleeding a reason why women discontinue at high doses
- 10M in R&D for 2001
- 4 applications in top FDA for hormonal products
- Will file 5 more hormonal products appl this year
- Excepts 110-130M in rev for 2001
- Net inc 9M for 2001
- 65% in hormonal rev
- q&a
- ML – nice report. High short interest. Why someone shorting it? 8 days to cover it. Any analyst coverage?
- Not sure why anyone shorting it. We must communicate our story to wall street. Three conferences in next few weeks. We will get attention of the market.
- BOA – Apri 8M in q for revenue Presales?
- A: Yes. 3.2% market share, 43% of new strips?
- Competition for Apri?
- A: None right now.
- Cenestin Solvay share was 2.7M for the fourth quarter?
- A: Yes.
- Tamoxicin was terminated. Any other projects?
- A: Tamoxicin was going to take too much investment in our corporate life. Working on bulk active material for some our product.
- When FDA approval?
- A: Optimistic on approvals and responded to all their questions. One product 100M and other is 150M if it comes.
- Cenestin studies?
- A: Dr. Ray Cline heads medical group. Feels Cenestin will impact on bone strength as estogen helps osteoporosis. Working on cognition issues with univeristy. Working on early indicators for Alheimer. Castovascular may be another. Partner with Solvay on this. Maybe 10 studies this year.
- Cenestin uptick in sales?
- A: Our story is being received well since day 1.
- Litigation?
- Not comment on it. In discovery process. The Mersat lawsuit in Discovery too.
- Update balance sheet?
- A: Keeping close watch on it. Lowering the debt is a priority.
- KC – feedback from Drs, onlabel vs. off label?
- A: no formal study, feedback from field, patients, and physicians is very positive. Patients like the product for consistent reproducibilty for blood levels.
- Hormone replacement market?
- A: There is a huge market place that is untapped due to patient’s fear of side effects with older products. Baby boomers are different. Bottom line is how people feel, when taking the drug.
- MtVA – congrats. 2001 outlook factoring Solvay. 80/20 split?
- A: We get 80% of the net after Solvay gets their money back.
- Could Cenestin be in black this year.
- A: Optismistic but no forecast.
- Gruntal, great report, Phelapromoline (PPA) scare?
- A: A lot of product had PPA in them. Some switch over as products
- Duramed coming in to chain store now.
- A: Not sure why it is happening?
- Prometrimine vs. Pervara?
- Studies publish that progestergen used makes a difference in lipid (HDL) profile.
- Does AHP have a product?
- A: not comment on their products.
- Avista prodcut vs. Eli Lily?
- A; Nothing standing out.
- Apri in demand for HMO, penalize if use other products?
- A: Please with product so far.
Duramed Pharmaceuticals, Inc. develops, manufactures, and markets a line of prescription drug products in tablet, capsule and liquid forms to customers throughout the United States. Products sold by the Company include those of its own manufacture and those it markets under arrangements with other drug manufacturers. The Company sells its products to drug store chains, drug wholesalers, private label distributors, health maintenance organizations, hospitals, nursing homes, retiree organizations, mail order distributors, other drug manufacturers, mass merchandisers and governmental agencies.

52-Week Low on 28-Dec-2000 $2.875
Recent Price $5.875
52-Week High on 13-Mar-2000 $11.375
Market Capitalization $154.6M
Shares Outstanding 26.3M
Float 18.2M
Price/Book (mrq) 24.62
Price/Earnings N/A
Price/Sales (ttm) 1.89
EBITDA (ttm) $6.01M
Debt/Equity (mrq) 6.53
Total Cash N/A
Short Interest As of 8-Feb-2001
Shares Short 1.02M Percent of Float 5.6% Shares Short (Prior Month) 921.0K

Cardinal to sell Duramed drug

Cenestin sales force to be built
3/2/01
BY RANDY TUCKER
The Cincinnati Enquirer
Duramed Pharmaceuticals said Tuesday that it has signed a contract with Cardinal Health Inc. of suburban Columbus to sell and distribute Duramed's estrogen-replacement drug, Cenestin.
News of the three-year contract came less than a week after the U.S. Food and Drug Administration (FDA) approved Cenestin for the treatment of menopause symptoms, driving Pleasant Ridge-based Dura_med's share price up as much as 59 percent.
Under terms of the new agreement, Cardinal Marketforce — a subsidiary of Cardinal Health — will recruit and train a sales force to market Duramed's product directly to doctors and pharmacists during what's known in the industry as “detail” visits.
Cardinal, which distributes pharmaceuticals to hospitals and drug stores, is a Fortune 200 company whose Marketforce management team has built a number of contract sales forces in the past, ranging in size from 25 to 400 people, the company said.
“The selection of Cardinal ... as our marketing and distribution partner will accelerate the rate at which women and their physicians learn about this important new treatment option,” said E. Thomas Arington, Duramed chairman and chief executive.
The contract calls for Dura_med to pay Cardinal a flat-rate, monthly fee for its services, unlike many sales and distribution agreements that give the distributor a percentage of total sales.
Jeff Kern, director or brand marketing for Duramed, said the deal with Cardinal will benefit the company in the long run.
“We believe we're going to be able to retain more income by having a flat-rate deal than we would by giving somebody a percentage of total sales,” Mr. Kern said.
Duramed is projecting sales for Cenestin — the first branded product for which the company has received FDA approval — to reach $100 million within its first 15 to 18 months on the market.
Mr. Kern said Duramed has several other products in the pipeline that the company plans to market under its new contract with Cardinal.
“For us, what Cardinal is doing is building a sales force and management team that will be dedicated to Dura_med,” Mr. Kern said. “Initially it will focus on Cenestin, but we'll also be able to sell other products with that sales force, leveraging the investment of that monthly fee over many products.”
http://enquirer.com/editions/1999/03/31/fin_cardinal_to_sell.html

Duramed thrives on new drugs

Focuses on women's health
2/3/2001
By Tim Bonfield
The Cincinnati Enquirer
The whirring tablet-press at the Duramed Pharmaceuticals plant in Pleasant Ridge spins so fast it can pump out more than 160,000 pills an hour. With growing sales of the hormone replacement drug Cenestin, and other products in the pipeline, Duramed executives predict their tablet press will be getting a lot busier in 2001.
After several years of struggle, executives at Duramed Pharmaceuticals say 2001 could be a break- through year. Even as the economy appears to be slowing on many fronts, Duramed plans to hire more workers and buy more equipment, including installing a high-tech automated packaging system by August.
“We didn't build all this capacity just to make Cenestin,” said E. Thomas Arington, Duramed's chairman and chief executive. “We already have five hormone products on the market. We have four we hope will be approved this year and 19 more in development.”
After several years of fits and starts, Duramed appears closer than ever to realizing its goal of becoming a force in women's health products, from birth control pills to various hormone replacement therapies.
The company told investors last month that it could post a small profit for 2000.
Three straight profitable quarters have reversed a string of losses that have punished its stock.
Cenestin sales remain far short of its goal of $100 million a year, but are picking up. Total weekly prescriptions were up 40 percent in December compared to three months before. New weekly prescriptions were up 55 percent in the same period, the company reports.
In 1999, Cenestin posted about $3.8 million in sales compared to more than $1 billion for competitor Premarin. In 2000, Cenestin sales tripled through the first nine months, but the company now reports Cenestin sales along with its Apri birth control pill and three other hormone products.
As a group, Duramed's five hormone products grew from $2.2 million in sales through nine months of 1999 to $28.7 million through nine months of 2000, the most recent figures available.
New directions
Improving sales reflect a company that has changed directions in several ways since forming 19 years ago.
Duramed was incorporated in 1982. It started production in Long Island, N.Y., in 1983, primarily making generic cough, cold and pain relief products.
In addition to Cenestin, the company produces more than 30 products including birth control pills, cancer drugs, blood pressure pills, pain relievers and a variety of cough and cold remedies.
Duramed moved to Cincinnati in 1985 and soon set its sights on the growing market for women's health products, especially hormone replacement drugs.
The company retooled in 1995 as it waged a prolonged effort to win FDA approval for Cenestin. The drug was originally envisioned as a generic equivalent to Premarin, the market leader. However, fierce opposition from Wyeth-Ayerst, maker of Premarin, blocked approval of the generic drug.
Duramed responded by seeking new-product approval for Cenestin, which was granted in March 1999. All the while, Duramed has been quietly building its production capacity.
What's inside
Inside a low building partly visible from the Norwood Lateral, production rooms are separated by air locks while temperature and humidity are carefully controlled.
Drug making at Duramed starts with mechanical arms lifting kegs of ingredients into a two-story-tall mixing machine. Products move on to a second blending room, then to a tablet press, a pill-coating machine and a packaging line.
A surprising aspect of pharmaceutical production is the smallness of the process.
A container of ingredients about the size of a beer keg can produce 800,000 to 4 million pills. In the tablet press room, a machine that can spit out 160,000 pills an hour isn't much bigger around than a home refrigerator.
At many points in the process, computer controls have replaced human operators, resulting in more precisely made medication and less risk of contamination, said Allen Marko, vice president of production.
To further minimize contamination from human contact, workers in “hot zones” of exposed materials wear full environmental suits. In other areas, workers don't wear clean suits but use glove boxes to run tests and make adjustments to avoid touching ingredients.
“We're a small company. But some of the top companies in the pharmaceutical business don't have this kind of technology,” Mr. Marko said.
The environmental controls are so strict that it required about three months of planning to set up a tour Jan. 26 for about 50 doctors, company staff and journalists, Mr. Marko said. Plant managers worked the production schedule so that the tour would coincide with a maintenance and cleaning day.
Duramed has room to expand production within its building and has land that could allow a two-story, 160,000-square-foot expansion that could triple production capability.
No date on building such an expansion has been set, but the company is gearing up for production increases.
Come August, Duramed plans to install a new packaging line that will transform an operation that takes 20 people to complete about 15 packages a minute into one that requires eight people to produce 140 packages a minute. Along the way, the updated equipment will allow better tracking of lot numbers, bar codes and product labels.
The increased automation means that some people likely will be moved from packaging to other parts of the plant. But the overall increase in production will require hiring more people, Mr. Arington said.
Seeing results
Only now are the results of investing millions into all that new equipment starting to show, Mr. Arington said.
Since 1985, Duramed has grown from employing about 200 people making products that generated $20 million a year in revenue to employing about 375 people making products producing closer to $80 million a year.
In September, Duramed continued its bitter battle with Wyeth-Ayerst by filing an antitrust lawsuit in U.S. District Court in Cincinnati. Duramed accuses Wyeth-Ayerst of illegally coercing managed health-care organizations to enter into exclusive contracts for Premarin. A Wyeth-Ayerst spokesman declined to discuss the allegation, saying the company does not comment on pending litigation.
But Mr. Arington said the company's main focus is building its women's health business.
“You can't fully get past your history, but we don't have people here looking back and talking about multimillion-dollar losses,” Mr. Arington said. “We believe we can now move ahead and become a major player in the woman's health care business.”
http://enquirer.com/editions/2001/02/03/fin_duramed_thrives_on.html

Summary:
Huge debt, but a product that is growing. I like the story and the conference may push the price up some. Also, my pharmacist says female hormone drugs are moving the best after amoxicillin and equivalents. I don’t have a biotech and this looks strong.

Jack

[jackhartmann]

B)SYMC analyst meeting and other
PR Stuff

CUPERTINO, Calif.--(BUSINESS WIRE)--Jan. 17, 2001--Symantec Corp. (Nasdaq:SYMC - news), a world leader in Internet security technology, today announced the ninth consecutive quarter of record revenues and earnings. Strong sales in both the enterprise and the consumer markets contributed to net revenue of $219.3 million for the third fiscal quarter 2001, ended Dec. 29, 2000. The reported results include operating results from AXENT Technologies since the acquisition date of Dec. 18, 2000. Net revenue increased 18 percent over the same quarter a year ago. Individually, Symantec posted revenues of $211.4 million for the quarter and AXENT contributed $7.9 million of the quarter's revenue.
Earnings per share before all acquisition related amortization and one-time charges for the third quarter was $0.78, an increase of 39 percent from the December 1999 earnings per share of $0.56. Net income before acquisition related amortization and one-time charges for the third quarter was $51.4 million, 45 percent higher than the December quarter last year of $35.4 million. All figures exclude the results of operations from the company's divestiture of the Visual Cafe and ACT! product lines.
``We are pleased with the strong growth in our enterprise business,'' said John W. Thompson, Symantec chairman, president and CEO. ``We are confident that Internet security will be one of the top priorities for consumers and enterprises alike in the coming year. With the addition of AXENT, Symantec offers a broad line of industry-leading solutions and services that protect customers from all types of security threats.''
Revenues from Symantec's enterprise security products accounted for 52 percent of total revenues in the December quarter, up from 45 percent last quarter. Enterprise revenues grew 30 percent from the same quarter last year. AXENT revenues contributed 2 points to the mix this quarter.
Worldwide consumer business accounted for 48 percent of revenues in the December quarter. Retail growth was 7 percent compared to a year ago.
International revenues represented 46 percent of total revenue in the December quarter. Overall, the European region grew 19 percent, the Japanese region grew 29 percent and the Asia Pacific region grew 36 percent compared to the December quarter a year ago.
Quarterly Highlights
„h Symantec completed the acquisition of AXENT Technologies, Inc. in a stock-for-stock exchange on Dec. 18, 2000.
„h Symantec's carrier-grade solutions are gaining attention in the enterprise market. Sprint has chosen Symantec's desktop security products to protect the company's residential broadband customers. EarthLink offers a co-branded Symantec Security Check site for both PC and Macintosh users in addition to providing Symantec's firewall solutions to its DSL customers. I-Gear and Mail-Gear also now support Cobalt's line of servers. In addition, Symantec is integrating its CarrierScan Server with Oracle's Internet File System.
„h Flagship accounts internationally are choosing Symantec's solutions over the competition. Symantec products are now protecting the Australian Tax Office, China Southern Airlines Company, Daimler Chrysler and Scandinavian Airlines.
„h Symantec launched several new or updated versions of its consumer software for Apple Macintosh users including Norton AntiVirus 7.0, Norton Personal Firewall 1.0, Norton Utilities 6.0, Norton SystemWorks 6.0 and Norton Internet Security 1.0.
„h Symantec also launched the following enterprise solutions: Norton AntiVirus Corporate Edition 7.5 and CarrierScan Server 2.0.
„h According to the latest information from PC Data, seven of the top 20 best selling business software comes from Symantec including Symantec's Norton AntiVirus 2001 which ranked number one.
„h Symantec products continue to receive awards and recognition. Symantec's Norton AntiVirus received its 12th 100% Award from Virus Bulletin. Symantec's Norton AntiVirus Corporate Edition received Information Security's West Coast Labs Check Mark Award. Symantec's Norton Ghost received Network World's Blue Ribbon Award recognizing the best product in its class. Spanish publication ``PC Actual'' named Symantec's Norton SystemWorks 2001 Product of the Year in its Utilities category. Symantec's Norton Internet Security 2001 was named Product of the Year in its Internet Software category.
Analyst Meeting Notes
John Thompson CEO
Greg Myers CFO
- security software getting much more attention as we added two new analysts since last q
- John
- We have been working to build new SYMC since trying to build predictable results
- 1982 founded, 1989 public
- 1990 bought the Peter Norton group
- CEO been there 2 yrs
- 1999 acquired Dellrina, not popular and cause board for transition to focus on enterprise solutions
- Acquired IBM enterprise antivirus software in 1998
- Sharpened focus on individuals and enterprise solutions
- Dec 2000 acquire Axent, takes advantage of internet security space
- 3779 employees in 37 countries, up 50% in 12 months
- 100M users of our products
- Must embrace the new employees
- 20% in development
- 80% of our senior leaders are new to their job.
- Had 65% of the leaders meet last week
- Three development units; consumer products ¡V security and small LAN users, enterprise solution division ¡V corporate desktops, service provider solution division ¡V embed security into infrastructure.
- Focus on expanding market opportunity, from PC to being out their as a software opportunity. 27B market in 2004.
- It is important that customers trust SYMC.
- Want to be proactive in viruses not reactive.
- Gary Warren, Gail Hamilton, Dana Seibert, Steve Cullen, will speak.
- Gary ¡V service provider VP
- Security is more than a firewall, 30K of hacker orientated sites on net. Firewall need to be installed at every point in the network.
- 74% of security breaches originated in the corporation
- Prior 1990, less than 10 viruses
- Now about 50K viruses
- Now seeing PDA viruses
- Viruses never go away. We fix four viruses/min on Yahoo
- 50K files submitted to SYMC last month, 90% had viruses
- 1999 saw Yahoo and other get denial of services
- Feel that everyone will be their own server ala Napster
- Feel in 2004, we could see 1M network attacks, 2M file submission to our lab, over 500K viruses, 250M internet sites
- See a barrier to entry as growth is going on rapidly
- Gigabit ethernet is becoming a standard.
- Gail Hamilton ¡V Enterprise Solution VP
- Enterprise was 52% of SYMC rev. Target 30% y2y rev growth
- A single attack could cost millions of dollars
- Seeing competition like Network Associates stumble
- Security hottest area in IT software spending
- Network devices is number issue for IT managers, security is number two
- When an attack occurs, customer want technical advice, and help cleaning up the mess.
- ESM from SYMC has 68% market share
- Beat 19 competitors in a virus test at he University of Hamburg
- MOT, C, DCX, BOA, MBL, CAT,
- Been taking virus business from Network Associates like DCX, JPM, BMW,
- CHKP has 12 reported security issues vs, Raptor had none in firewall security
- Jun quarter should have intruder alert software out and compete with ISSX
- IBM has Big Blue and SYMC has Force in Yellow
- Dana
- Won embeded security at YHOO, INKT, ORCL, T
Too long to listen further

52-Week Low on 27-Dec-2000 $27.375
Recent Price $48.00
52-Week High on 9-Mar-2000 $81.625
Market Capitalization $3.63B
Shares Outstanding 75.6M
Float 67.3M
Price/Book (mrq) 2.24
Price/Earnings (ttm) 25.11
Price/Sales (ttm) 3.92
EBITDA (ttm) $176.4M
Debt/Equity (mrq) 0
Total Cash (mrq) $715.9M

Summary
I need to hear the CC, but I like what I see so far.

Jack

[jackhartmann]

TIBX mid q CC 3/7/01
- As many customer reported, we too saw customers delay purchase
- 80-84M double q1 2000 result
- 75% license rev at 60M up 100% y2y
- operating results break even
- we did not miss target due to competive pressure but market pressure
- current economy putting pressure on companies
- leader in our space and provide solution that improve their business
- Q&A
- GS – good position to weather storm?
- A: Our customers can weather storm, INTC, A, ENE, DT, customer have sig assets and need to keep spending, we are looking 80M quarter and stronger than competitors, we have global presence and full solution. 500M+ in the bank and can weather this and break even, We saw a variety of deals pushed out. Customers saying we want to wait until last minute to spend. Across the bord cut in energy and others.
- Blance sheet metrics?
- A: 100M collected so DSO is mid 80’s, reduced it nmicely during quarter, cash 550M, deferred rev will be typical
- MS – B2B vs. back office?
- A: B2b getting delayed, pushing out until absolutley necessary
- TW – Pipeline?
- A: Wait until March 22 for full result. The quality of the pipeline is good, been delayed. Repeat licenses from existing customer base.
- Seasonality?
- A: It did enter into it.
- Deals cancelled?
- A: Not seeing that, Just waiting until absolutely necessary.
- Competitive landscape?
- A: Not change materially, See Beyond, Accenture, Webmethods, Vitria, IBM,
- Internationally?
- A: Seeing some delays in Europe, not as much in US, Asia is not much business.
- TW – Vertical changes?
- A: more detail onMarch 22. We tried to develop new vertical, energy was strong now seeing delays.
- Less comprehensive deal?
- A: Customers want to buy from one company vs. eight companies and saying need to buy bare minimum now.
- JL – deal size?
- A: Median deal size may have gone up a little. Fewer large deals.
- Portal business?
- A: did very well, many millions we did that we had not done before. Think our CSCO-YHOO will dominate corporate desktops solution
- How many missed deals?
- A: Enough to miss our quarter. Lost quite a few in the multi-million category.
- Where in cycle did deferral occur?
- We had won the deal and got stop through upper management approval.
- What application vendors feeling slowdown?
- A: People have these systems and they don’t integrate. Most want to integrate what they have now.
- SSB – Which area saw acceleration? Define deal?
- A: Portal, active data base were strong. Deferral were won, backlog was deal in pipeline. Deal won have procurement process. Procurement negoition saw deal delayed. We won the deal, agree to the pricing, and needed to get contract. Some cases where customer wanted changes. Some we got the technical win and CIO moves it through. Some companies procurement process is very lengthy.
- When see improvement? Which category will move first? Larry Ellison said it will happen on the CC.
- A: demand is strong, more detail March 22. People will spend on core integration area. Strong demand for portal and active database. As for B2b, waiting to see more partners in b2b space so can trade in b2b.
- INGB – flat revs?
- A; More detail guidance march 22.
- Breaking even, op interest,
- A: Operating excludes normal charges, about half revs from previous customers.
- GKM – b2b weak? EAI strong run counters to others like BEAS?
- A: We had strong q4, BEAS is application development platform and people continue to develop application. People trying postpone investment until they ready to be cripple unless they have it. Other have yet to report Feb #s
- Market share?
- A: we are taking market share across the board.
- ED – b2b pushout for time frame to restart?
- A: Hard to put metric, fell 3-6 months. Need enough people out there to do b2b to do transactions.
- 2002 budgets reduce?
- A: budget not going up as fast. Companies trying to make existing networks work.
Uneven call. I like TIBX in 1999 but scalped it and missed the huge run. 550M in cash is the main point. At $10 a share the bottom should hold for a couple weeks.

Jack

[jackhartmann]

What's hot in largecaps (or things you never bought)
Largecaps over 5B
Symbol Company $Price Perf.
YTD
JELCY JOHNSON ELECTRIC HOLDINGS 17.25 397.4%

AMD Advanced Micro Devices 23.30 68.7%

BMCS BMC Software, Inc. 23.50 67.9%

DBRSY De Beers Consolidated 42.63 59.3%

BBY Best Buy Company, Inc. 47.00 59.0%

TOY TOYS R US INC 26.14 56.6%

CD Cendant Corporation 14.73 53.0%

HYSNY HYSAN DEVELOPMENT LTD ADR 3.41 51.6%

SFA Scientific-Atlanta, Inc. 49.33 51.5%

SPLS Staples, Inc. 17.13 45.0%

LOW Lowe's Companies Inc. 62.47 40.4%

T AT&T Corporation 23.61 36.9%

PKX Pohang Iron & Steel Co. 21.30 36.9%

FD Federated Department Str. 47.85 36.7%

AAPL Apple Computer, Inc. 20.25 36.1%

CA Computer Associates Int'l 26.52 36.0%

DPH Delphi Automotive Systems 15.15 34.7%

DELL Dell Computer Corporation 23.38 34.0%

NSC Norfolk Southern Corp. 17.73 33.2%

CP Canadian Pacific Limited 37.96 32.9%

SASOY Sasol Ltd 8.63 32.7%

JCI Johnson Controls, Inc. 68.99 32.7%

BSX Boston Scientific Corp. 18.00 31.5%

ELUX AB Electrolux 33.63 31.2%

MSFT Microsoft Corporation 56.69 30.7%

For Midcaps 1-5B
Symbol Company $Price Perf.
YTD
SRV Service Corp. Int'l. 4.40 151.4%

RAD Rite Aid Corporation 5.56 134.1%

IFMX Informix Corporation 6.75 127.3%

ELNK EarthLink, Inc. 9.88 96.3%

SEMA Sema plc 16.19 96.2%

AOLA America Online Latin Am. 5.06 88.4%

SKX Skechers U.S.A., Inc. 28.97 86.9%

ACI Arch Coal, Inc. 25.64 81.5%

KM Kmart Corp. 9.60 80.7%

MEE Massey Energy Company 22.71 78.1%

NETA Networks Associates, Inc. 7.44 77.6%

BRS Banco Rio de la Plata S.A 14.60 77.0%

EFII Electronics For Imaging 24.19 73.5%

LRCX Lam Research Corporation 24.69 70.3%

BBI Blockbuster, Inc. 14.08 68.1%

FCX Freeport-McMoRan C & G 14.35 67.6%

JCP J.C. Penney Company, Inc. 17.75 63.2%

OI Owens-Illinois, Inc. 9.28 63.1%

EFNT Efficient Networks, Inc. 23.13 62.3%

ANF Abercrombie & Fitch Co. 32.30 61.5%

EYE VISX INC DEL 16.85 61.4%

ROIA Radio One 17.25 61.4%

DDS Dillard's Inc. 18.96 60.5%

CSKKY CSK Corporation 19.00 58.3%

ASTSF ASE TEST LTD 13.38 57.4%

Many of the dogs benefiting from the January effect will die.
Jack

[jackhartmann]

W) TXU DD
Rated a Watch
Reason for DD

Seeing high Value line and S&P rating and huge dividend.

Business

TXU Corp. engages in the generation, purchase, transmission, distribution and sale of electricity; the purchase, transmission, distribution and sale of natural gas; and energy marketing, energy services, telecommunications and other businesses. TXU Corp. is a multinational energy services holding company and one of the largest energy services companies in the world with more than $22 billion in revenue and $45 billion of assets. TXU Corp. has 30,000 megawatts of power generation and sells 270 terawatt hours of electricity and 2 trillion cubic feet of natural gas annually. TXU Corp. delivers or sells energy to approximately 11 million customers primarily in the United States (US), Europe and Australia. At December 31, 2000, TXU Corp. and its subsidiaries had 16,540 full-time employees.
TXU Electric is the largest subsidiary of TXU Corp. and one of the largest electric utilities in the US. TXU Electric operates 23 generating stations, 18 of them fueled by gas and oil, 4 by lignite, and 1 by nuclear fuel, and provides electricity service to 92 counties and 370 incorporated cities in Texas.

Competitors

Other Utilities

News

Horgan waxes energetic on energy
By Lisa Sanders, CBS.MarketWatch.com
Last Update: 1:27 PM ET Mar 14, 2001
DALLAS (CBS.MW) - VJ Horgan, TXU's president of energy trading, is absolutely energetic on the subject of power.
Horgan was hired in September to head the group as TXU positions itself for Texas' deregulation of retail electricity in January 2002. She is one of two women to have a position at the top level of management in the industry. Mirant (MIR: news, msgs, alerts) CEO Marce Fuller was once president of trading and marketing operations before she took over the helm of the company. Energy trading, as defined by TXU, is the means to identify, measure, and value a portfolio of assets, which can include buying and selling of different commodities, such as electricity and natural gas. It also entails managing contracts and obligations and assessing and managing risk. TXU Electric & Gas, a subsidiary of Dallas-based (TXU: news, msgs, alerts) , is Texas' largest investor-owned utility. In an interview with CBS.MarketWatch.com, Horgan expanded on the subject of energy trading, the problems in California, and how TXU will fare in a completely deregulated environment. A law deregulating Texas wholesale electricity was signed in 1995.
Q. CBS.MW: How does energy trading work?
A. Horgan: We're but one part of an overall successful strategy built around portfolio management. Our ownership of upstream assets as well as downstream assets represented by customer relationships and an extensive ability to aggregate these customer obligations is absolutely integral to the portfolio management model...While your upstream capabilities are focused on operating assets and having a model predicated on operational excellence, our downstream assets, again the end-use markets, are very much focused on...understanding how customers buy, what they want to buy, anticipating those needs and being in a position to solve them. Trading is the guy in the middle. We are very market focused and as we look at the factors that influence current markets but also forward markets, we are the eyes on the market that help assess in a given region where we want to position ourselves along that energy value chain.
Q. CBS.MW: If California's utilities had been in a position to hedge, could the energy crisis have been avoided?
A. Horgan: They certainly could have mitigated a lot more of the risk. When you can't hedge and you're entirely at the whim of market movements, and you have an obligation to serve...let's look at the structural implications of what they're also faced with. Those that had an obligation to serve the end-use customer load were forced to divest of their upstream assets. Back to the portfolio management model, you're being forced to operate with only half the equation. In addition, if you're long customers and you have an obligation to serve them, you're effectively short the market, and you can't do anything to mitigate that risk. Again, when you're forced or you choose to operate with only half of the portfolio management dimension, the propensity for bad things happening is much greater.
Q. CBS.MW: Do you sell power into California, and if not, why not?
A. Horgan: Currently we do not. We have some fairly extensive gas operations in California.
Q. CBS.MW: Did you foresee a problem in California?
A. Horgan: Yes with regard to California in terms of the leverage to the commodity.
Q. CBS.MW: What markets are you interested in?
A. Horgan: When we look outside of Texas to the markets that will provide the greatest opportunity for growth, we have undertaken an extensive regional assessment study that looks at fundamentals like supply in the region - what resources exist both from a generation perspective as well as fuel resources - load growth, transmission constraints, transportation constraints, environmental legislation or constraints, market and regulatory structure, and we assess from the perspective given the competencies we have in both operating upstream assets, aggregating customers in the downstream markets and our ability to develop and deliver our wholesale capabilities in the energy trading company. We assess what is the best market entry strategy in the regions we feel that have the dynamics that will enable us to not just establish what might be an ownership position in a particular asset or an aggregation of customers but over the long haul would enable us to establish the balance perspective across both upstream and downstream assets.
Q. CBS.MW: What is current status of the supply situation in the U.S.? Where there are constraints, how can they be overcome?
A. Horgan: There is no one U.S. market. When you look at the realities of how the individual sub-regions trade and how really reliability is determined in those regions, yes, there are markets that have extreme dislocations between supply and demand. The supply and demand can also be excess supply. Other markets with constraints traditionally have been in the mid-continent around the Illinois region; some into the mid Atlantic states, and some segments of New York have constraints. The Southwest, at this stage, has seen a reasonable amount of new construction in the past several years in large part because people were trying to overcome the difficulty of [locating] in California. We're probably okay in the Southwest. The solutions: you have a number of companies that have come out very strongly with a strategy of meeting that supply shortage.
Q. CBS.MW: If the vast majority of the new power plants being built in the U.S. are natural-gas fired, and natural gas has already been bid up two to three times what it was a year ago, does that suggest that once these plants come on line, prices for the electricity they generate will remain high?
A. Horgan: I think that depends on what the supply response is, how deep and how swift the supply responses are on the gas side. There are two aspects to that: how much natural gas really exists and the actual transportation capacity to get it to the market. Gas prices have been high before and generally have never been sustainable. Of course, we haven't had the level of demand as contemplated not only with the existing plants that have come on but also the ones that are in backlog. So, generally markets are responsive and if gas prices were going to be high because there was neither a swift nor a deep response from the gas supply side of the equation, then a natural response would be for people to start building coal plants.
Q. CBS.MW: Do you think it's necessary for the industry to pursue alternative energy sources like clean coal and liquefied natural gas?
A. Horgan: That's purely an economic answer. What you'll see is a technology response to the current state of price dislocation, and that gets them to how sustainable is that price. If prices are high for a year, they are certainly not going to cover the cost of some of the new technologies.
Q. CBS.MW: Your job description includes positioning TXU to participate in deregulation of the Texas electricity markets in 2002. What does that entail?
A. Horgan: The previously vertically integrated companies have to file plans for both the generation company and the retail company. There's a systems infrastructure requirement, there's the development of new processes, procedures and control around that, and maybe most importantly bringing an entire new level of skill into the organization, which will enable us to manage what will then be, effectively, an entire merchant portfolio. Trading brings to the portfolio management model a market focus, the analytical skills and capabilities to assess alternative investments, and part of the positioning anticipated there will (involve) rigorously evaluating our existing portfolio of assets, whether upstream or downstream. In transitioning and positioning the company, that means getting the appropriate skills in place to evaluate the risks, and up to and including how we want to change the composition of that portfolio as we enter the deregulated marketplace. We will be ready.
Q. CBS.MW: Do you see any of the same problems in California affecting Texas?
A. Horgan: Absolutely not. Our market structure is very different. Unlike California where demand greatly exceeded supply, we have a market that is generously supplied.
http://www2.marketwatch.com/news/yhoo/story.asp?source=blq/y...

2/1/01 CC Notes
- 11M customers globally,
- electricity volume up 11%, top 5 in NA
- gas volume up 40%, top 10 in NA
- overhauled merchant trading division
- 0.61 EPS in q4 vw. 1.24 in 99 This had 0.52 gain from primeco sales
- 3.43 EPS in 2000 up 8%
- Sold gas metering business for 31M gain
- Merchant trading revamped. Incurred a number severance costs. 27M charge
- US Electric perform, 158M in Netincome
- Added 11K customer in North Texas
- Q&A
- Look forward in strengthening balance sheet in 2001. Paying out dividends and targeting 55% debt. Not going to repurchase share.
- Will buy stock if it drops at the lower range.

Dallas, Aug. 31 (Bloomberg) -- TXU Corp. said the amount of electricity its Texas utility supplied to customers reached a record for a third time this year as a heat wave spurred the use of air conditioners.
TXU Electric & Gas, which serves the Dallas-Fort Worth area, said consumption peaked between 4 p.m. and 5 p.m. yesterday at 22,056 megawatts, or enough power to light more than 22 million U.S. homes. That broke the July 20 record by 14 megawatts. Temperatures at Dallas-Fort Worth International Airport reached 106 degrees Fahrenheit yesterday. It was the 38th day northern Texas has topped 100 degrees this summer and the 61st straight day without rain, the National Weather Service said. Its five-day forecast calls for more of the same.

DALLAS, March 6 /PRNewswire/ -- LayerOne, Inc., a global provider of layer one optical transport exchange facilities and services, today announced it has signed a master service agreement with TXU Communications to connect the company's extensive regional fiber network to LayerOne's optical transport exchange facilities. TXU Communications plans to take advantage of the cost- effective distribution technology within LayerOne's NEXUS Optical Distribution Exchanges(TM), and tap a ready pool of potential buyers for its wholesale bandwidth and dark fiber services. TXU Communications initially plans to deploy in LayerOne's Dallas Exchange, gaining immediate access to some of the country's largest fiber optic networks, with options to extend its network into any of LayerOne's fourteen additional facilities, including two additional Texas facilities currently under construction in Fort Worth and Houston.

Analysts and Other

We expect EPS to grow around 8% in 2001. This would follow a 7.5% rise in 2000 over 1999’s operating of $3.19. (Due to the different levels of shares outstanding, the reported EPS for the 1998 individual quarters do not add up to the full year EPS). TXU will continue to expand both its international business and its non-regulated domestic operations. It will seek growth in Europe through acquisitions, joint ventures and management service contracts. TXU intends to sell some of its generation plants in the U.K., since its energy trading operations do not require physical ownership of the plants. For the same reason, it is likely to sell or swap some of its generation plants in Texas. Having completed about $600 million of its $800 million share repurchase program, we do not see additional near-term repurchases. We expect free cash flow to be used to reduce the debt/equity ratio to 55% by end of 2001. We would continue to buy TXU stock. With a dividend yield of approximately 5.7%, and the shares trading at around 11 times our 2001 EPS estimate of $3.70, the stock remains attractive for both price appreciation and income. In 2000, after having dropped nearly 27% in the early part of the year, the shares rebounded about and finished the year up 24.6%. The stock had been hurt by the decline of power prices in the U.K and a PUCT order deferring consideration for 78% of the $1.65 billion regulatory asset securitization TXU requested. Texas legislation will allow TXU to completely recover its stranded costs and maintain existing rates until retail competition begins on January 1, 2002, at which time it will reduce its rates by 6% for a five year period. While this would reduce revenues by about $460 million, it would be more than offset by a $500 million increase from TXU’s U.S. energy operations.
Sources of power generation for TXU Electric in 1999 were: gas/oil, 34.3% (36.7% in 1998); lignite/coal, 38.5% (36.5%); nuclear, 16.4% (16.4%); and purchased power, 10.8% (10.4%).
2-22-00 S&P report

13-Feb-01 13:00 -- 14:00 ET
TXU Corp (TXU) 41.11 +0.31: Salomon Smth Brny initiates coverage with an OUTPERFORM and a $45 price target; believes TXU is selling at an unwarranted discount relative to Integrated Utility group due to investor confusion over TXU's growth strategy and various regulatory uncertainties; expects company to sell non-core businesses and focus on its global Energy Merchant franchise, which is not yet profitable in the U.S.; as company does so, the shares could re-value to near-parity with group.

Numbers

Revs 4435.0M to 4486.0m to 4776.0M to 4592.0 to 5834.0M
EPS 0.72a to 0.89a to 0.67 to 1.25 to 0.61 Feb01 per briefing
EPS est for 12/01 yr is 3.68, 2002 is 3.94
52-Week Low on 31-Mar-2000 $29.188
Recent Price $39.67
52-Week High on 26-Dec-2000 $45.25
Market Capitalization $10.2B
Shares Outstanding 258.1M
Float 255.5M
Annual Dividend (indicated) $2.40
Dividend Yield 6.05%
Price/Book (mrq) 1.37
Price/Earnings (ttm) 11.57
Price/Sales (ttm) 0.48
EBITDA (ttm) $3.69B
Debt/Equity (mrq) 2.75
Total Cash (mrq) $1.04B
As of 8-Feb-2001 Shares Short 4.68M Percent of Float 1.8%

Company cut dividend in 1995 and 1994.

Block trades of note
3/16/2001 9:32:00 AM $39.250, 298,500 shares, $11,716,125 sell
2001-03-15 16:01 $39.880, 254,300 shares, $10,141,484 between spread
2001-03-14 16:02 $39.100, 184,600 shares, $7,217,860 between spread
2001-03-14 12:52 $39.100, 106,000 shares, $4,144,600 buy
2001-03-14 10:12 $39.500, 151,400 shares, $5,980,300 sell
2001-03-06 15:30 $41.500 1,700,000shares, $70,550,002 between spread, monster trade

Internet Posts of Note

none

Insiders

Nothing of note

Chart

Falling with the Dow Utilities. May retest $36 level.

Links

www.txu.com

Summary

Dividend is attractive. I think EPG and DUK are better managed companies have better growth, but TXU is cheap and has that high dividend. I remember my folks buying four utilities in the bear market of the 1970s and getting a dividend check each month. TXU entering the merchant energy business. Tough to compete with EPG and ENE in the area.

Jack

[Mattu]

Good Luck, Jack...

I promise I won't delete it this time <GG>

Trust me! Just ask Uncle Frank :)

mb