Investor's Business Daily, October 3rd, 2007
The major stock indexes lost ground Wednesday as investors took profits off the table ahead of Friday's jobs report.
According to preliminary data, the NYSE composite and the small-cap S&P 600 lost 0.7% each. The Nasdaq gave up 0.6% as a large number of chip stocks crumbled. Morgan Stanley gave weak outlooks on Intel INTC and Advanced Micro Devices AMD.
The Philadelphia semiconductor index tumbled 2.1%, falling below its 50-day moving average.
Meanwhile, the Dow and S&P 500 lost 0.6% and 0.5%, respectively.
Volume rose on the Nasdaq, giving it its second distribution day in recent weeks. NYSE turnover edged lower.
The gaming stocks were the session's worst. Group stalwarts Las Vegas Sands LVS and Wynn Resorts WYNN took beatings after a report said that gaming revenue in Macau might may not be as robust as expected.
Other leading sectors such as energy, machinery and chemicals also got hurt.
LDK Solar LDK plunged 16.66, or 24%, to 51.65, or just above its 50-day moving average. Volume surged to more than five time its average trade and was the heaviest since its June 1 IPO. The company signed a five-year deal to supply wafers to Taiwan-based Solartech Energy Corp.
Trina Solar TSL tumbled 6.24, or 10%, to 56.95 on big volume.
Synaptics SYNA gapped down and fell 2.35, or 5%, to 45.20 on more than double its average trade. The stock's Accumulation/Distribution Rating slipped to C from A just three sessions ago.
On the upside, 3SBio SSRX gapped up and surged 2.60, or 15%, to a new high of 19.94 on monster volume. The biotech firm came public in February at 16 a share. Analysts see full-year profit vaulting 161%.
3:15 p.m. ET update: Stocks Slide On Mixed Volume
By Alan R. Elliott
Indexes tried to retrace morning losses but failed in late trading, deepening their declines.
The NYSE composite was down 0.8% and the Nasdaq down 0.9% at 2:55 p.m. ET. The small-cap S&P 600 slid 0.9%. The S&P 500 was down 0.6%, the Dow 0.7%.
Volume was lower on the NYSE, higher on the Nasdaq. If that trend continues, the Nasdaq would add a distribution day.
The chipmakers group slipped after a Lehman Brothers raised questions about memory-chip pricing through the remainder of the year.
Leading stocks such as Cree CREE, SanDisk SNDK and Nvidia NVDA led the sled ride.
Laptop touchpad maker Synaptics SYNA gapped down, losing 2.53 to 45.02. The stock had climbed 45% since its breakout from a 19-week cup-with-handle base in June. Wednesday's 5% drop left shares just above their 10-week moving average.
On the upside, fiber optic telecom equipment maker Ciena CIEN held to the top of its trading range after gapping up, adding 2.40 to 45.06. The move extended Tuesday's breakout above a 30.30 buy point on a double bottom with a handle.
KHD Humboldt Wendag KHD, a Hong Kong-based provider of mining equipment and services, jumped 2.81 to 35.73. The move came on the stock's fifth day of heavy-volume gains, extending its climb above a 31.65 buy point on an 11-week base.
Buffalo Wild Wings BWLD rose 1.70 to 40.36. The eatery chain is back above its 10-week moving average, building the right side of a base begun in June.
1 p.m. ET update: Indexes Shave Losses In Midday Trading
By Vincent Mao
Stocks pared some losses but still lingered in negative territory midday Wednesday.
At 12:40 p.m. ET, the Dow, NYSE composite and small-cap S&P 600. fell 0.3% each. The Nasdaq and S&P 500 slipped 0.2% a piece.
NYSE volume was tracking lower, while Nasdaq trade was running higher.
Ceragon Networks CRNT pulled back after a seven-session advance. Shares plunged 2.93, or 14%, to 18.85 on heavy trade. Collins Stewart cut networking gear maker to underperform from buy. Ceragon is just above an 18.70 buy point.
Varian Semiconductor VSEA fell 2.62, or 5%, to 50.64, slicing its 50-day moving average. The chip equipment maker reports results on Oct. 25.
On the upside, Intuitive Surgical ISRG ramped up 8.42 to a new peak of 241.54. Oppenheimer reiterated its buy rating on the maker of robotic surgical systems. Intuitive is now 5% past a 230.09 buy point from a rebound off its 10-week moving average.
Kaiser Aluminum KALU gapped up, gaining 4.67, or 6% to 46.63 on brisk turnover. Bear Stearns upgraded the company to outperform from peer perform. Kaiser lost money from 2001 to 2005, but turned a profit of $2.54 a share in 2006. Analysts see earnings rising 78% this year.
Obagi Medical Products OMPI firmed up 1.21, or 6%, to an all-time high of 20.89. The skin care products maker came public in December at 11 a share. Obagi's earnings growth has ramped up in recent quarters after many periods of sagging growth.
11:15 a.m. ET Update: Stocks Slip On Mixed Volume
By Alan R. Elliott
A morning of no startling news, good or bad, left stocks to their own devices Wednesday. Deutsche Bank said it would take a mortgage loan-related $3 billion charge. Data showed the economy holding up reasonably well in September.
As of 11:15 a.m. ET, the Nasdaq, Dow and S&P 500 fell 0.2%, off their lows. The NYSE composite and small-cap S&P 600 slid 0.3%.
Volume was running higher on the Nasdaq, lower on the NYSE.
Crude oil prices rose in early trading, then turned and dropped after weekly inventories data showed oil stockpiles rose.
Thoroughly battered home building stocks added to gains made Tuesday. Dr Horton DHI, Pulte Homes PHM and Lennar LEN led the group's 3.2% rise in morning trade.
A group of high-flying China-based stocks took hits after mixed trading on Chinese exchanges left the Shanghai composite up 2.6% and Hong Kong's Hang Seng index down 2.5% Wednesday.
PetroChina PTR tumbled 11.84 to 178.86. Mindray Medical MR dropped 2.89 to 42.10. China Finance Online JRJC reversed, giving up 1.58 to 41.92.
On the upside, CME Group CME, the world's largest derivatives exchange, added 8.02 to 610.97. The Chicago-based exchange, which merged with the CBOT in July, outlined its second half expenses and spending plans. The stock has been consolidating since January. Wednesday's move lifts shares just above a 610.06 buy point on a seven week, cup-shaped base.
Green Mountain Coffee Roasters GMCR spiked up 2.33 to 36.67. That rousted the stock off its 10-week moving average and pushed it up what may be the right side of an eight week base.
Comscore SCOR, a June new issue that makes software to gauge online audience behavior, gapped up, adding 4.37 to 33.40. The move boosted the stock further above a 10-week base after a modest-volume breakout in late September.
Kaiser Aluminum KALU also gapped up, gaining 3.91 to 75.87. The move bumped shares further up the right side of a base begun in May. The company exited bankruptcy in July 2006.
10:15 a.m. ET Update: Indexes Pull Back In Early Trade
By Vincent Mao
Stocks opened lower Wednesday, as buyers stepped back after recent gains.
At 10:09 a.m. ET, the small-cap S&P 600, which has outperformed recently, dropped 0.7%. The NYSE composite fell 0.5%. The Nasdaq and S&P 500 gave up 0.4%. The Dow slid 0.3%. Decliners outnumbered advancers by about 2-to-1 on both exchanges.
In economic news, the ISM services index for September fell 1 point to 54.8, roughly in line with forecasts. The employment subindex rebounded back above the boom-bust 50 mark, another sign, along with the ADP report before the bell, of a jobs recovery last month. Stocks pared losses after the ISM services report.
Some chip stocks are taking an early hit.
Cree CREE dropped 3.71, or 12%, to 29 in fast trade. Canaccord Adams cut the chipmaker to sell from hold.
Micron Technology MU lost 0.83, or 7%, to 10.96 after it swung to a loss in its fiscal fourth quarter, citing weak memory chip prices
Nand chipmaker SanDisk SNDK gave up 1.45 to 53.58.
Morgan Stanley's negative comments about Intel INTC, down 2%, didn't help either.
The Philadelphia semiconductor index dropped 1.1%, hanging just above the 500 level.
Wynn Resorts WYNN tumbled 13.27 to 152.56 on big volume. The stock has already traded about half of its average daily volume within the opening minutes. On Monday, Wynn touched a new high after Jeffries & Co. raised Wynn's.
Group mate Las Vegas Sands LVS stumbled 11.21, or 8%, to 133.35.
On the upside, Gmarket GMKT added 0.99 to 26.67. On Monday, the South Korean ecommerce firm broke out of a cup-shaped base. It's now about 8% past a 24.58 buy point.
Ciena CIEN gapped up, rising 1.35 to 44.01. That's the telecom equipment maker's best level in more than three years. The stock added to Tuesday's 9% gain following positive comments from Morgan Keegan.
9:15 a.m. ET Update: Stocks Set For Weaker Start
By Vincent Mao
Stock futures pointed to a weaker start Wednesday, ahead of data on the services sector. Nasdaq futures fell 11 points vs. fair value, S&P 500 lost 8 points and Dow dropped 52 points.
Foreign markets traded mixed. The Shanghai composite charged up 2.6%, but Hong Kong's Hang Seng tumbled 2.5%. Meanwhile, the FTSE 100 and Dax edged higher.
The greenback lost ground against the euro, but made headway vs. the yen.
In economic news, the ADP employment survey said private sector payrolls grew 58,000 in September after a revised 27,000 gain in August. That's further evidence that the weak Aug. nonfarm payrolls report was a blip.
On Friday, economists expect the Labor Dept.'s payrolls report to show an increase of 100,000 new jobs — private and public — after falling 4,000 in August.
The ISM services index for September will be out at 10:00 a.m. ET. Economists see a dip to 55 from August's 55.8. Readings over 50 indicate growth.
Deutsche Bank DB said that it would take a $3.1 billion charge due to turmoil in the credit markets. But it still expects to post earnings for the third quarter. The stock rose 3% in pre-market trading.
Earlier this week, Citigroup C and UBS UBS gave profit warnings, as subprime and other credit woes hurt the financial giants.
Credit Suisse CS rose 1% in the preopen. The investment banker said it would cut 170 more jobs due to the fallout in the subprime mortgage market. Credit Suisse doesn't write mortgages, but it repackages the loans into securities.
Immucor Inc. BLUD slumped 9% in pre-market trading, ahead of its earnings after the close. The medical device maker is expected to post earnings of 22 cents a share on sales of $59.8 million.
Mechel MTL said first-half income surged to $489 million from $182 million from the first half of 2006. Shares rose 1% in the preopen.
