Quarter to Quarter Aggressive Growth Stocks

[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