Corning warned yesterday after the bell, and the markets sold off with spirit. The Dow took it on the chin with a triple digit loss on fairly solid volume of 1.2 billion shares. The Nasdaq shed 3.15%, or 64.92 points, on moderate volume of 1.66 billion shares. The drop is being blamed on investor angst on the earnings front in advance of actual earnings reports. From a CBS Marketwatch report:
"We broke some key technical levels Tuesday but I think the lows of the year will hold. Itis tough to sustain rallies when companies donit have clarity on earnings and when investors consistently get disappointments," said Bob Harrington, head of listed block trading at UBS Warburg.
"The marketis a real struggle here as it continues to trade in the same wide range that has held it for many months. The downside looks quite limited, as many stocks have seen extreme levels of selling. And yet the summer rally could be fairly tame by historical standards," conceded Robert Dickey, a technical strategist at Dain Rauscher.
Look for more direction once the earnings reports, and any accompanying guidance for the rest of the year, begin hitting next week.
Industry News
Johnathon Joseph, the analyst that warned investors out of the chip sector in November (before it tanked), says the end is nigh. Fortunately it is the end of the chip sectors woes to which he refers. From a TheStreet.com report:
"Given that 80% of our companies preannounced weaker than forecast earnings, investor focus will likely be on guidance for Q3 and beyond," Joseph wrote. "We expect Q3 to be down slightly from Q2, but for the outlook to be cautiously optimistic about the rest of the year."
His list of companies related to this field that favors includes Intel, Texas Instruments, Analog Devices, Altera, Agere Systems, and Applied Microcircuits.
It seems that Amazon.com messed up when it began taking pre-orders for Windows XP yesterday. Windows XP will be released on October 25th, and the pricing that Amazon.com used is either premature or Microsoft doesnit want it prematurely know. Amazon.com has pulled the pre-registration page, and says that customers who did pre-order will get the lowest price whether it is the pre-order price, or a lower price from MS.
Apple Industry News
UBS Warburg issued a report today that says Microsoft will be the only company to benefit from the PC price war between Gateway, Dell, and whomever. At the same time, the firm says that Apple and Gateway are likely to come through the price war "relatively unscathed." Comments from a TheStreet.com report:
The analyst said Apple and Gateway may emerge relatively unscathed by the ongoing price wars. "GTW, in particular, is benefiting from its new price guarantee that is raising store visits while also enabling higher pricing," he wrote.
The QED report that says Apple has regained the lead in the education market continues to get some play today at ZDNet (the same report published by MacCentral yesterday).
AAPL opened up 50 cents higher, but immediately began a steady decline that ended US$2.00 later. The stock traded in the highest volume of the last couple of weeks at over 7 million shares trading hands. A last minute rally helped the stock recover some 18 cents of the dayis loss, and it traded in a range of 20.84 - 23.07.
Apple closed at 21.17, down 1.53 (-6.74%), on volume of 7,058,400 shares trading hands.
The Nasdaq closed at 1962.79, down 63.92 (-3.15%), on volume of 1,661,907,000 trading hands.
The Dow closed at 10175.57, down 123.83 (-1.20%), on volume of 1,245,864,000 trading hands.
The S&P 500 closed at 1198.78, a gain of 8.19 (+0.69%).
Adobe closed at 42.95, down 1.03 (-2.34%), on strong volume of 4,891,500 shares trading hands.
Akamai closed at 7.63, a loss of 0.66 (-7.96%), on light volume of 1,282,400 shares trading hands. Apple is a large shareholder of Akamai.
Earthlink closed at 14.24, up 0.54 (+3.94%), on light volume of 1,463,900 shares trading hands.
IBM closed at 101.96, down 2.76 (-2.64%), on strong volume of 10,267,000 shares trading hands.
Macromedia closed at 17.08, a loss of a dime (-0.58%), on light volume of 628,400 shares trading hands.
Motorola is the subject of a downer report from CBS Marketwatch concerning their upcoming quarterly results. MOT closed at 15.50, up 0.13 (+0.85%), on volume of 11,874,900 shares trading hands.
Dell closed at 25.61, down 1.09 (-4.08%), on volume of 32,624,600 shares trading hands.
Gateway closed at 14.07, down 0.73 (-4.93%), on volume of 1,842,000 shares trading hands.
Intel has stopped shipping tis 900 MHz P3 Xeon chip due to a flaw in the design. INTC closed at 27.79, down 1.11 (-3.84%), on light volume of 41,259,700 shares trading hands.
Microsoft closed at 64.48, down 1.21 (-1.84%), on volume of 33,281,900 shares trading hands.
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