Message-ID: <29384756.1075845228845.JavaMail.evans@thyme> Date: Fri, 8 Jun 2001 00:29:56 -0700 (PDT) From: editorial@mail.realtimetraders.com To: editorial@realtimetraders.com Subject: Extreme optimism drove tech stocks higher Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "RealTimeTraders.com" @ENRON X-To: Editorial@realtimetraders.com X-cc: X-bcc: X-Folder: \Lewis, Andrew H.\Lewis, Andrew H.\Inbox X-Origin: LEWIS-A X-FileName: Lewis, Andrew H..pst Dear Subscriber, please note that you are receiving this email because you have opted into our FREE daily market analysis newsletter. If you would like to be removed from our list, reply to this email with remove in the subject line. Thank you! June 8th, 2001 RealTimeTraders.com offers free real-time stock alerts throughout the day. Why pay for chat rooms and stock pickers for old news? Morning Watch List This section contains 6 stocks that are expected move in 1 to 5 days. Click here for this morning's Watch List Stocks: http://www.realtimetraders.com/marketinfo/watchlist.asp Beyond The Numbers Extreme optimism drove tech stocks higher Thursday tech stocks and the market as a whole started to rally on favorable news from the semiconductor sector. First the Semiconductor Industry association said the future demand for semiconductors would be strong despite the drop in the book-to-bill ratio. Following that announcement National Semiconductor said it is starting to see improvements as some of its major customers are starting to place orders again. This news combined with Monday's positive comments from Xilinx Inc. (XLNX) propelled the semiconductor sector higher. Another factor that helped the index move higher was the anticipation of more favorable comments from industry leader Intel Corporation (INTC) after the close. Intel finished the regular session higher by $1.32 to close at $31.14. Just as traders expected after the close Intel said it expects to meet earnings estimates. While they were not really positive comments, investors were happy to hear the company was not warning. As a result traders drove the stock even higher in the after-hours session. Shares of Intel traded as high as $32.85 on 1 million shares in the Island ECN. Despite the fact Intel did not warn, Merrill Lynch is cautious on the stock. Taking a closer look at today's comments, RealTimeTraders analysts are not very positive on the stock as well. It seems Intel really painted a mixed picture as the company said it expects revenue to be slightly below the midpoint of the previous guidance range given on April 17th. The company went on to say it sees stability in the microprocessor business and weakness in its communications related businesses. Readers may want to watch the analyst comments and rating/estimate changes on Friday. When Thursday's session came to a close, the semiconductor index had risen 7.7% and closed above the 200 day moving average for the first time in more than 7months. While it was a broad based rally, some of the veteran traders expressed concern over the fact stocks such as Broadcom Corporation climbed $4.67 after warning that its earnings will fall short of expectations. It is also worth mentioning the company is expecting sales to drop by a whopping 35% below its first quarter number. It seems as though investors and traders have decided to selectively focus only on the positive news, and ignore all the negatives. On the economic front, the government reported jobless claims rose to a multi-year high. Analysts had expected the number to come in around 417K, but the actual number was 432K. Not only did this number beat the estimates, but it also beat the previous week's 419K number by a wide margin. RealTimeTraders analysts believe this could cause some problem for the ailing economy. In our opinion, the slowing economy combined with increasing unemployment spells trouble for the economy. While we believe the rebate from the tax cut is a good thing for the economy, in our view it alone may not be enough to help the economy recover. It is also our opinion the longer the slowdown lasts, the harder it will be to recover. Under the current circumstances we believe the Federal Reserve may consider another rate cut to boost the economy at the next FOMC meeting on June 26th and 27th. Ahead of the meeting markets and analysts will be watching the economic reports closely for any clues to determine if the recent rate cuts have started to help the economy. We at RealTimeTraders continue to believe earnings will be the driving force in the near-term. In our opinion the companies that manage to deliver strong earnings in this difficult environment will emerge as the leaders when the economy and markets starts to improve. Sector Analysis Retailers are experiencing a significant slowdown Thursday the markets received retail sales figures for the month of May. Most of the retailers reported significant declines in same store sales, which surprised investors and analysts alike. Many analysts had argued the rising consumer confidence and lower interest rates should improve sales for the retailers. Thursday morning the retail sector gapped down, but regained all its losses and closed higher by 1.2%. Which once again illustrates that traders and investors are too optimistic and are ignoring the facts. Some of the companies that announced negative results in this sector include The Limited Inc. (LTD), Gap Inc. (GPS), Federated Dept Stores (FD) and American Eagle Outfitters (AEOS). Economic Reports & Bond Markets There are no economic reports due out on Friday. Market Breadth Thursday's NYSE advance/decline reading was 1587/1460 Vs. Wednesday's reading of1215/1856 Thursday's Nasdaq advance/decline reading was 2104/1649 Vs. Wednesday's reading of 1619/2201 New Highs and New Lows Thursday's NYSE new high/lows was 135/28 Vs. Wednesday's reading of 173/20 Thursday's Nasdaq new high/lows was 113/37 Vs. Wednesday's reading of 124/30 Important Market Moving News Visit our Before The Bell page -Http://www.realtimetraders.com/sp/beforethebell.asp for the most important news that may effect your portfolio. This page also provide information on stocks that are going to gap open higher/lower and the reasons if any. We also alert traders to the actively traded stocks before the bell. 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Some of Today's Key Earnings Releases Click here for a complete list of today's earnings. http://www.realtimetraders.com/earnings/earnings.asp Company Name Expected earnings Symbol URS 0.55 URS Disclaimer All information provided in this email is for informational purposes only. RealTimeTraders.com obtains data from sources it believe to be reliable. RealTimeTraders.com nor its content providers guarantee the accuracy of the content. Although the opinions expressed here are based on sound judgement, experience, and research, no warranty is given or implied as to their true reliability. The responsibility for decisions made from information contained in this email lies solely with the individual making those decisions. RealTimeTraders.com DOES NOT offer investment advice. Consult your financial advisor for all your investment decisions. Do not rely on this publication alone to make your investment decisions. 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