Stock Reports Tuesday

jjgold · May 13, 2003

LONDON (Reuters) - Wall Street looked set for a flat opening on Tuesday amid consolidation after Nasdaq hit 11-month highs and as investors await earnings from Wal-Mart (NYSE:WMT - news) and other retailers for a snapshot on consumer spending.

A cautious broker call on the semiconductor sector may weigh on the technology sector, dealers said.

By 6 a.m. EDT, U.S. stock index futures were little changed.

There were no standout U.S. stocks trading in Europe.

The dollar fought back from recent losses, as traders, said the Bank of Japan was buying the greenback for yen.

Secretary of State Colin Powell (news - web sites) said ten Americans and a large number of other nationals were killed in the suicide bombings that rocked Riyadh, the capital of Saudi Arabia, overnight.

No major economic data are due.

Earnings reports from retailers will give investors an insight into consumer spending, still the main driver of the world's biggest economy.

Scorecards are due from sector leader Wal-Mart, May Department Stores (NYSE:MAY - news), J.C. Penney (NYSE:JCP - news), Abercrombie & Fitch (NYSE:ANF - news), and TJX Cos. (NYSE:TJX - news).

Computer Sciences Corp (NYSE:CSC - news), agricultural equipment maker Deere & Co. (NYSE

E - news), and drugmaker Schering-Plough (NYSE:SGP - news) will also report.

FOCUS ON CHIPS

The chip sector awaits results from Applied Materials (Nasdaq:AMAT - news), the leading U.S. chip equipment maker.

Dealers said that broker Merrill Lynch cut its rating on five semiconductor stocks from "buy" to "neutral."

The changes were on ATI Technologies (Nasdaq:ATYT - news), Intersil Corp. (Nasdaq:ISIL - news), Maxim Integrated (Nasdaq:MXIM - news), Nvidia Corp. (Nasdaq:NVDA - news), and Semtech Corp. (Nasdaq:SMTC - news).

Merrill said the stocks have outperformed the broader market and that the stocks do not merit a "buy" rating, given current business conditions.

Merrill also expects the Philadelphia Semiconductor index (^SOXX - news) to likely to head back to between 270 and 280 points over the summer, down by nearly a quarter from current levels.

Dealers said the debt market may have an impact on some shares such as Citigroup (NYSE:C - news), the top U.S. financial services company, which sold $2.5 billion in notes, $500 million more than originally planned.

General Dynamics (NYSE:GD - news), the commercial airline and defense group, sold $2 billion in debt, while Comcast U.S. cable TV operator Comcast (Nasdaq:CMCSA - news) sold $1 billion in notes.

The tech-laden Nasdaq Composite (^IXIC - news) rose 1.4 percent on Monday to an 11-month high, and the broader S&P 500 index (^SPX - news) clocked up its best close since August last year.

The Dow Jones industrial average (^DJI - news) ended up 1.42 percent at 8,726.73.

jjgold · May 13, 2003

LONDON (Reuters) - Oil prices climbed on Tuesday after a series of suicide bombings ripped through Western residential compounds in the Saudi capital Riyadh.

U.S. light crude climbed by 26 cents to $27.61 a barrel, while London's Brent crude rose 29 cents to $25.18.

Traders and analysts said any attack in Riyadh was bound to raise anxiety over security of supply from the world's largest oil exporter.

"Anything that happens within Saudi Arabia is relevant to the oil market and will move the price," said J.P. Morgan's Paul Horsnell.

"But it's a relatively muted reaction. There's no particular suggestion of any instabilities within the Saudi regime."

Early reports said that up to 10 people were killed and more than 160 U.S. and other nationals had been wounded after a series of suicide attacks on foreigners' compounds in Riyadh late on Monday.

But Secretary of State Colin Powell (news - web sites), speaking shortly after his arrival at Riyadh as part of a Middle Eastern tour, said 10 Americans and a large number of other nationals had been killed.

Powell has also said the anti-Western attacks in the birthplace of Islam bore the stamp of al Qaeda and its Saudi-born leader Osama bin Laden (news - web sites). Al Qaeda was blamed for the September 2001 air suicide attacks in the United States.

Saudi Arabia is the biggest exporter of crude oil to the world's 77 million barrel-per-day market, with an estimated production capacity of 10.5 million bpd.

MUTED REACTION

Analysts said Tuesday's gains were tempered by a downbeat signal from the International Energy Agency (IEA), which trimmed its oil demand forecast for 2003 in a report published on Tuesday.

The agency revised down its annual forecast for world oil demand growth by 90,000 bpd to 1.03 million because of the impact of the SARS (news - web sites) virus on consumption in Asia.

It also said that oil demand in Asia's fastest growing economy, China, would shrink by 5.5 percent in the second quarter on an annual basis because of the SARS epidemic.

The Paris-based agency said it had slashed its demand forecast for China for the second quarter by 340,000 barrels per day to 4.95 million bpd as air and road transport fell sharply along with tourism, and economic activity slowed.

More bullishly for the markets, the Paris-based IEA, adviser on energy to 26 industrialized nations, also pointed to a decline in industry stocks, saying they had fallen more sharply than expected as consumers stocked up ahead of war in Iraq (news - web sites).

Commercial oil stocks among Organization for Economic Cooperation and Development Countries (OECD) shrank by 1.43 million barrels a day to 2.338 million barrels in the first quarter, the agency said.

The decline left a 260-million-barrel, or 10 percent, deficit versus a year ago and compared to an average first-quarter draw of 280,000 bpd in the previous five years.

"The net result is that OECD industry stocks heading into the summer driving season are much lower than anticipated," the IEA said.

Analysts still expect the Organization of the Petroleum Exporting Countries to curb supplies further at a meeting in Qatar on June 11.

OPEC (news - web sites) agreed in April to reduce output, fearing a potential price collapse from the eventual return of Iraqi crude to the international market and an uncertain outlook for oil demand as the global economy struggles with anemic growth.

jjgold · May 13, 2003

NEW YORK (Reuters) - Stocks are seen slipping at Tuesday's open as suicide blasts in Saudi Arabia and earnings due from leaders like Applied Materials Inc. (Nasdaq:AMAT - news) give investors pause a day after the Standard & Poor's 500 hit its highest level since August.

"We had a big up day yesterday," said Arthur Hogan, chief market analyst at Jefferies & Co. "I think we have a little profit taking in the early going. I just think we are taking a little bit of a breather here."

A series of bombs ripped through Western residential compounds in the Saudi capital of Riyadh on Monday evening, killing at least 20 people in an attack Secretary of State Colin Powell (news - web sites) said bore all the hallmarks of the al Qaeda network of Osama bin Laden (news - web sites).

"I think the geopolitical had been comfortably moved to the backburner, but events like this bring it back the forefront," Hogan said. "And when that happens, you definitely get some uncertainty."

Applied Materials Inc. (AMAT.O), the biggest maker of semiconductor manufacturing equipment, will be in focus after Tuesday's close when it is scheduled to post its quarterly results. Shares were trading at $15.58 before the market opened, down from $15.72 at Monday's close.

Equity index futures pointed to a weaker open on Wall Street. Standard & Poor's 500 stock index futures for June fell 4.30 points to 940, while Nasdaq futures for the same month lost 7 points at 1,153. Dow Jones Industrial futures shed 34 points to 8,665.

Wal-Mart, the world's No. 1 retailer, will grab the spotlight early in the day. The Dow member before the open reported higher quarterly profit as lower costs and the weak dollar helped boost international results. Shares dipped to $56.38 before the bell from a close on Monday of $56.70.

The dollar fell after U.S. Treasury Secretary John Snow, in an interview with Reuters, dismissed the value of currency interventions. Oil prices shot up after the bomb blasts in Saudi Arabia. European markets were mixed, and Asian markets had dipped.

Investors betting on a bright economy later in 2003 have driven the S&P 500 up 18 percent since mid-March, but some Wall Street experts caution the hefty rally may soon run out of steam. Economic reports are still pointing to a tepid rebound.

In other corporate news, Merrill Lynch said before the open it cut its ratings on several semiconductor stocks, including Intersil Corp. (Nasdaq:ISIL - news) and NVIDIA Corp. (Nasdaq:NVDA - news) to "neutral" from "buy," saying they do not think that business conditions and valuation merit "buy" ratings.

ATI Technologies Inc. (Toronto:ATI.TO - news), Maxim Integrated Products Inc. (Nasdaq:MXIM - news) and Semtech Corp. (Nasdaq:SMTC - news) were also downgraded to "neutral" from "buy."

Schering-Plough Corp. (NYSE:SGP - news) said on Tuesday before the open its first-quarter earnings plunged as its popular Claritin allergy drug became available without a prescription at a big discount to its former price. Shares closed at $18.30.

On Monday, the Nasdaq climbed 21.25 points, or 1.4 percent, to 1,541.40, its highest close since June. The Dow Jones industrial average (^DJI - news) climbed 122.13 points, or 1.42 percent, at 8,726.73, and the S&P 500 gained 11.7 points, or 1.25 percent, to 945.11.

jjgold · May 13, 2003

NEW YORK (Reuters) - The dollar rose against the euro on Tuesday, levitating from the previous day's four-year low as traders momentarily heeded U.S. Treasury Secretary John Snow's call for a "sound" U.S. currency.

Traders have buffeted the U.S. currency amid widespread skepticism about America's commitment to a strong dollar. In various interviews over the past several days, Snow sparked controversy by suggesting that U.S. manufacturers were benefiting from a weaker dollar, while casting doubt on the efficacy of intervention.

But in a speech unveiling a new $20 bill, Snow said that a "sound currency" is key to a sound economy. Market participants were uncertain of the comment's significance, but some seized on it as an excuse to take profits on the euro's rally.

"The initial reaction is a little bit of pressure on the euro," says Joseph Barnea, a trader with Bank Leumi in New York. Snow "is trying to show the U.S. Treasury is still behind the strong dollar policy, but it's kind of contradictory, because before that he was criticizing intervention," Barnea says.

The euro changed hands around $1.15 versus the dollar at midday , more than a cent from Monday's four-year high and down 0.50 percent from its prior U.S. close.

Traders reported monetary authorities buying dollars for yen during the Asian and London sessions, as Japan attempts to keep its currency weak to engineer an economic recovery. The Bank of Japan and the Ministry of Finance, however, refused to confirm this, and at any rate the yen's losses had evaporated by the start of U.S. trading.

The single currency lost ground against the Japanese yen, trading around 134.20 yen , well below Monday's record high at 135.51 yen and down 0.80 percent on the day.

The dollar, meanwhile, bought 116.55 yen , down 0.25 percent as profit-taking on euro positions against the yen constrained its advance against the Japanese currency.

DOLLAR POLICY -- WHAT'S IT ALL ABOUT?

Snow recent remarks on the dollar has left many dealers nonplused about the U.S's position on the dollar. Nonetheless, his shifting refrains are considered by analysts to be par the course for new Treasury secretaries that attempt to ad-lib on dollar policy.

In an interview with Reuters last week that was embargoed until Tuesday, U.S. Treasury Secretary John Snow said currencies' values should be determined in the open market. He added that Japan and Europe should not blame a weaker dollar for their economic woes.

Though Bush administration officials are loath to say it outright, analysts have become convinced that they have tacitly backed away from supporting a strong dollar. Snow's remarks over the past two days have lent credence to that speculation.

"It is a more honest and open disclosure of the policy. If U.S. fundamentals don't justify it, they don't want a strong currency, they want the market to set it," said Greg Anderson, senior currency economist at ABN-Amro Bank in Chicago.

One factor currently restraining the dollar is the U.S. trade imbalance, which hovers at record highs. In early trading, the U.S. currency fell briefly after the government reported that the U.S. trade deficit swelled in March to $43.5 billion, its second-highest level on record.

jjgold · May 13, 2003

14:00 ET Dow -44, Nasdaq -1, S&P -2.27: [BRIEFING.COM] Considering the advance of the indices in the last two sessions, today's action is rather encouraging as the pullback appears to be more of a consolidation, rather than a concerted sell-off... Currently, the Dow is underperforming the S&P 500 and the Nasdaq on a relative basis... As such, only 8 of the Dow's 30 components are managing to stay above the unchanged line, with 5 of the 8 showing only fractional gains... Leading the Dow to the downside are Caterpillar (CAT 53.15 -1.10) and Wal-Mart (WMT 55.78 -0.92)... The latter is under pressure after reporting its Q1 (Apr) earnings and on news that its inventory increase exceeds sales gain for first time since 1995... NYSE Adv/Dec 1693/1479... Nasdaq Adv/Dec 1535/1460.

13:30 ET Dow -33, Nasdaq +3, S&P -0.40: [BRIEFING.COM] After bouncing around early, the indices have now gone back to that slow steady uptrend...since 10:30 ET charts now look like the same ramp that has appeared in recent days...the Nasdaq is now up 16% on the year...each of the past six years have seen 20% moves...three up, then three down...the market is showing significant momentum that is hard to bet against... NYSE Adv/Dec 1764/1389... Nasdaq Adv/Dec 1607/1352

jjgold · May 13, 2003

16:22 ET AMAT slips $0.25 in after hours; NTAP falls $0.55 :
16:17 ET Computer Sciences beats by $0.01, guides in line (CSC) 34.21 +1.32: Reports Q4 (Mar) earnings of $0.95 per share, excluding a $0.02 charge related to acquisition of DynCorp, this appears to be comparable actual, as company says "Earnings per share (diluted) were 1 cent over consensus estimates". Reuters Research and First Call consensus are both $0.94. Revenues rose 1.4% year/year to $3.08 bln vs the $3.08 bln consensus. Company sees Q1 EPS of $0.50-0.52 vs R.R. consensus of $0.52, for Y04 sees $2.78-2.88, vs consensus estimate $2.82
16:13 ET Invitrogen wins appeals case for competent cells (IVGN) 35.53 +0.82: Announces that the U.S. Court of Appeals for the Federal Circuit ruled in IVGN's favor on its appeal of a Jan. 31, 2002 decision by a U.S. District Court in IVGN's lawsuit against Stratagene relating to the manufacture of competent cells; decision overturns the prior District Court ruling, establishes broad applicability for IVGN's competent cell patent, and remands the case back to the District Court for further decisions.
16:10 ET Network Appliance reports in-line results (NTAP) 16.74 +0.36: Reports Q4 (Apr) earnings of $0.07 per share, in line with the Reuters Research consensus of $0.07; revenues rose 17.9% year/year to $241.6 mln vs the $238.8 mln consensus.
16:08 ET Applied Materials beats by $0.01, ex items (AMAT) 15.54 -0.18: Reports Q2 (Apr) earnings of $0.03 per share, ex items, $0.01 better than the Reuters Research consensus of $0.02; revenues fell 4.3% year/year to $1.11 bln vs the $1.10 bln consensus. $0.03 ongoing EPS actual excludes charges taken as part of reallignment plan.
16:07 ET Sycamore reports in-line results (SCMR) 3.90 +0.18: Reports Q3 (Apr) loss of $0.05 per share, in line with the Reuters Research consensus of ($0.05); revenues fell 22.1% year/year to $10.6 mln vs the $9.6 mln consensus.
16:05 ET Abercrombie reports in line, guides Q2 (ANF) 29.95 -0.95: Reports Q1 (Apr) earnings of $0.26 per share, in line with the Reuters Research consensus of $0.26; revenues rose 10.8% year/year to $346.7 mln vs the $355.6 mln consensus. Company also remains comfortable with Q2 EPS guidance of $0.30-0.34 vs R.R. consensus of $0.35.
16:05 ET Applied Materials reports pro forma $0.03 vs $0.02 consensus (AMAT) 15.54 -0.18:
16:02 ET Network Appliance announces $150 mln buyback (NTAP) 16.74 +0.36: -- Update --

jjgold · May 13, 2003

Close Dow -47.48 at 8,679.25, Nasdaq -1.72 at 1,539.68, S&P -2.81 at 942.30: [BRIEFING.COM] The indices opened lower today in response to the bombing in Saudi Arabia, a mixed earnings report from Wal-Mart (WMT 55.49 -1.21) and a downgrade of some semiconductor stocks by Merrill Lynch...as in recent sessions, however, steady buying emerged, and the indices drifted higher through the day...then, after the Nasdaq and S&P went positive, selling started, and the indices fell back near their opening levels...that leaves it as a day of modest, understandable profit-taking that still leaves the near-term trend in question...it is a mix of widespread expectations of a modest correction but with many investors looking to buy dips...after the close today, Applied Materials (AMAT 15.56 -0.16) and Abercrombie & Fitch (ANF 29.85 -1.05) are due to report earnings...tomorrow morning, April Retail Sales data are due...the Nasdaq was the action site today, with 1.8 billion in volume, as Internet stocks were a bit frothy...eBay (EBAY 97.47 -2.74) and Yahoo! (YHOO 27.23 +1.06) led the charge...the SOX semiconductor index was -2.81 to 355.73, but storage stocks such as EMC (EMC 10.10 +0.16) were up...NYSE volume was a more lackluster 1.4 billion shares...breadth was not bad, as advancers barely led decliners...the debate as to whether the market has gone too far too fast was not settled in today's inconclusive action... NYSE Adv/Dec 1605/1654... Nasdaq Adv/Dec 1612/1523.

jjgold · May 13, 2003

NEW YORK (Reuters) - Stocks sagged on Tuesday after deadly bombing attacks aimed at Westerners in Saudi Arabia put investors on guard, putting the brakes on the market following a powerful two-month stock-buying spree.

Just a day earlier, the broad Standard & Poor's 500 index (^SPX - news) had roared to its highest close since August.

"We've had a very meaningful move to the upside, and that starts to raise some worries about valuation," said Hugh Johnson, chief investment officer at First Albany Corp, adding that "the terrorist attack in Saudi Arabia reminds us that the big issues are still with us."

A downgrade of several semiconductor companies by Merrill Lynch also dampened the mood.

But strength in the Internet sector helped stanch the market's losses as some investors, fearful of falling behind, snapped up shares like Amazon.com (Nasdaq:AMZN - news).

"People feel like they're missing the boat to some degree and that money has got to put money to work," said John O'Donoghue, managing director of listed trading at Credit Suisse First Boston.

The Nasdaq composite index (^IXIC - news) dropped 1.72 points, or 0.11 percent, to 1,539.68. A day earlier, the tech-packed index hit its highest close since June.

The blue-chip Dow Jones industrial average (^DJI - news) lost 47.48 points, or 0.54 percent, to 8,679.25. The broad S&P 500 (.SPX) slipped 2.81 points, or 0.3 percent, to 942.30.

Decliners narrowly outnumbered advancers on the New York Stock Exchange (news - web sites), while on the Nasdaq, advancers beat decliners by a ratio of 16 to 15. About 1.4 billion shares changed hands on the Big Board and more than 1.8 billion were traded on Nasdaq in moderate trade.

ATTACK IN SAUDI ARABIA

Suicide bombers shot their way into housing compounds in Riyadh in the first big attack on U.S. targets since the Iraq (news - web sites) war. Secretary of State Colin Powell (news - web sites) said up to 10 Americans were killed, and Saudi officials have put the overall death toll at around 29.

The attacks boosted oil prices and aggravated investor worries of more attacks on Westerners.

Investors betting on a bright economy later in 2003 have driven the S&P 500 up 17 percent since mid-March. Market watchers acknowledge that sentiment has improved on Wall Street, but they caution that the rally may soon peter out.

Wal-Mart Stores Inc. (NYSE:WMT - news), the world's No. 1 retailer, fell $1.21 to $55.49 and dragged on the Dow. The company posted a 14 percent rise in quarterly profit and stood by its full-year outlook but said the second quarter would likely show little improvement over the just-ended first quarter.

Amazon.com -- up 4 percent, or $1.25, at $32.95 -- and Yahoo Inc. (Nasdaq:YHOO - news) -- up $1.05, or 4 percent, at $27.22 -- emerged as bright spots. The American Stock Exchange's Internet index (^IIX - news) rose 1.13 percent.

Avanex Corp (Nasdaq:AVNX - news) ranked as the biggest percentage gainer on Nasdaq, soaring $1.74, or 146 percent, to $2.93. The maker of components and subsystems for fiber-optic networks agreed to acquire the optical component businesses of both Alcatel (CGEP.PA) (NYSE:ALA - news) and Corning Inc. (NYSE:GLW - news)

But chip shares took a hit after Merrill Lynch cut its ratings on stocks of several semiconductor companies, saying they do not think business conditions and valuation merit "buy" ratings.

Intersil Corp. (Nasdaq:ISIL - news) fell 63 cents to $20.39. Nvidia Corp. (Nasdaq:NVDA - news) lost 39 cents to $20.38. Maxim Integrated Products Inc. (Nasdaq:MXIM - news) dropped $1.24, to $39.37. Semtech Corp. (Nasdaq:SMTC - news) fell 25 cents to $17.52. All were cut to "neutral" from "buy."

After the close, Applied Materials Inc. (Nasdaq:AMAT - news), the biggest maker of semiconductor manufacturing equipment, on Tuesday posted a quarterly loss as a result of a charge for layoffs and restructuring.

jjgold · May 13, 2003

Tokyo stocks open up slightly, JR East strong
Tuesday May 13, 8:12 pm ET

(TOKYO, May 14 (Reuters) - Japanese shares opened slightly higher on Wednesday, with East Japan Railway Co (Tokyo:9020.T - News) snapped up following its posting of a record profit and Nissan Motor Co Ltd (Tokyo:7201.T - News) bought as the yen lost some ground on the dollar.

As of 0007 GMT, the Nikkei average (^N225 - News) was up 0.50 percent or 40.85 points at 8,231.11 after slipping 0.38 percent in the previous session due to a sudden rise in the yen. The TOPIX index (^TOPX - News) climbed 0.32 percent to 831.85.

East Japan Railway (JR East) gained 1.13 percent to 539,000 yen after Japan's top railway operator said on Tuesday that its net profit jumped 106 percent in 2002/03. Nissan rose 1.44 percent to 916 yen after Tuesday's fall of four percent.