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
