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
