Dell Computer (DELL – 40-3/8) is the latest technology company to report cautious comments. DELL announced that it sees earnings per share about five cents below the current 21 cents per share estimate on Y2K issues and parts shortages. Two days ago, Compaq Computer (CPQ – 28-7/8) reported fourth-quarter earnings that beat the Street; however, the company made its number because of gains on investments and not on revenue growth, which fell four percent. Consequently, investors have not been overly impressed with the results, as CPQ shares moved down seven percent on a heavy 40 million shares volume. The PHLX Box Maker Index (BMX – 365.21) is below its 50-day moving average, but a weekly close below this level would be more technically significant. We would expect that holding this tenuous trendline will be increasingly difficult with today’s announcement.
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Investors in McDonald's (MCD – 35-1/2) had a metaphorical cup of coffee spilled on their laps today following the company’s earnings report. The company reported earnings that missed estimates by a penny per share, coming in at 35 cents per share. By the stock’s reaction, investors were disappointed when they did not find the prize in the bottom of their Happy Meal box. The stock is lower by 11 percent on a heavy 15 million shares volume, or about five times that of yesterday. Management guided estimates for 2000 to the $1.52 per share to 1.59 per share range, which comes in dangerously close to the current estimate for 2000 of $1.58.<
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It's been a big day for brokerage stocks. The AMEX Securities Broker/Dealer Index (XBD - 434.91) is up almost four percent today. Impressive has been Merrill Lynch's (MER - 87-7/16) ability to add to yesterday's gains on blow-out earnings. MER is up another eight percent in today's trading. Speculators have been jumping on the bandwagon in today's trading. Among the February, March, April, and July series, total call volume (10,915 contracts) is outpacing total put volume (4,369 contracts) by about a 2.5-to-one margin.
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Superior TeleCom (SUT - 14-1/2) and its subsidiaries make up the largest wire and cable manufacturer in the U.S. and the third largest in the world. SUT is up by more than two percent in mid-afternoon trading, as the security tries to post its fourth consecutive winning session. The stock is trading above its 20-day moving average, but it remains below its 10-week moving average. On the options front, 2,510 contracts have crossed the tape on the February 15 call. Open interest at this out-of-the-money strike entering today's trading was just 58 contracts. This is one of the most-active call contracts on the AMEX. The latest information from Bloomberg shows that SUT remains anonymous on Wall Street, as there are only three analysts covering the equity.
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On Tuesday, CheckFree Holdings (CKFR - 63-3/8) reported a second-quarter loss of eight cents per share, topping Street expectations of an 11-cents-per-share loss. This figure, though, does not compare favorably to net income of 22 cents per share in the year-ago quarter. In response to this news, the electronic-commerce services company gapped 5-7/8 points lower at today's opening bell. The stock is currently in the red by more than 20 percent in a move that has taken the shares to their lowest intraday level since November 23. Since hitting an all-time intraday high on December 30, the equity has lost 41 percent of its value. CKFR is poised to close this week below its 20-week moving average for the first time since early September. Despite this technical weakness, the latest information from Bloomberg shows that CKFR remains overloved on Wall Street. Out of 15 analysts covering the stock, 13 rate it as a "buy" or better.<
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