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
