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Preopen Trading: Futures Trading Higher; Chip Stocks Are in the News
06/28/00 - 08:09 AM EDT
Betsy Riley
Wireless communications technology company Qualcomm (QCOM Quote) was the stock to watch this morning after the company said it may see "modestly lower" chipset orders in the fourth quarter due to an expected drop in domestic South Korean phone sales.
Although the company said the drop would not affect its third-quarter earnings, it didn't say whether it would hurt its fourth quarter. Qualcomm said it would provide additional information on its fourth-quarter expecations on July 19, when it reports third-quarter results The company lately was down 3 11/16 to 60 on Instinet and Island. Other chip stocks were getting some attention. Motorola(MOT Quote) was up 3/8 to 30 7/16 on 25,000 shares. KLA Tencor(KLAC Quote) was getting a bid at 62 up about 1 1/8 and Micron(MU Quote) was up 1 point to 89 1/16. The S&P 500 futures
on Globex lately were up 4.8 to 1476, almost 6 points above fair value. The Nasdaq 100 futures were up 20 to 3788. Europe's major indices were lower after midsession, with France's CAC 40 down 0.4%, Germany's Xetra Dax barely down 0.1% and the U.K.'s FTSE 100 down 0.2% (see today's European Midday Update for more). Japan's Nikkei 225 rose 0.5% overnight, while Hong Kong's Hang Seng jumped 1.8% (see today's Asian Markets Update for more). Elsewhere in preopen Island trading, Rambus (RMBS Quote) was fetching 108 1/2. U.S. Stocks in Europe: Markets Quiet as Traders Await Fed Action
LONDON -- U.S. stocks were quiet in Europe Wednesday morning as traders waited for the Federal Reserve to conclude its two-day meeting this afternoon and say whither interest rates. While most analysts expect the Fed to leave rates unchanged from the current 6.5% target when the meeting concludes at 2:15 p.m. EDT, not everyone is convinced. With the next Federal Open Market Committee meeting not until August 22, "it's possible they may do something now because they wouldn't want to go so long without making a change," said Jim McCabe, a fund manger with Capel Cure Sharp in London. One possibility is for the Fed to leave the door open to make changes some time later this summer, before the official meeting, should inflation begin to once again gain steam. Also expected today are durable goods orders. Consensus estimates are forecasting a rise of 2.8%, but this data often fails to paint a clear picture because it's so volatile, McCabe said. Elsewhere in the markets, Phelps Dodge (PD Quote) was taking a hammering Wednesday morning after warning the previous evening that second-quarter earnings would be between 2 cents a share and 5 cents a share. Analysts polled by First Call/Thomson Financial were expecting the company to report earnings of 23 cents a share. The company blamed higher fuel and power costs, as well as restructuring expenses for the shortfall. Phelps Dodge shares traded in Germany were off 4 euros ($3.76), or 9.3%, to 39 euros. Like many U.S. stocks, Phelps Dodge is also listed on several foreign stock exchanges. Those higher utility costs affecting Phelps Dodge could spell bad news for other mining companies. McCabe said he has been staying away from basic material and basic industry stocks for the past five years and plans to continue. "These companies must adjust to the modern world and most of them haven't. Nevertheless, shares of Barrick Gold (ABX Quote) traded up 20 European cents, or 1.1%, to 18.45 euros. And Minnesota Mining & Manufacturing (MMM Quote) was up 1 euro, or 1.11%, to 91 euros. The broader market in the U.S. looks set for a slightly positive open with the. The Nasdaq futures also traded up 16.5 points to 3,784. Fair value helps determine the tone of futures trading, often a good indication for how the securities market will open. Tuesday's After-Hours Trading
By Angela PrivinStaff Reporter (Updated from 7:28 p.m. EDT) Computer networking equipment maker 3Com (COMS Quote) gained after hours on fourth-quarter financial results that matched analyst expectations, thanks to a smooth path in its ongoing restructuring, to be completed by the end of its first fiscal quarter. The company posted a loss of $146.8 million, or 42 cents a share, compared with year-ago net income of $87.5 million, or 24 cents. Sales fell to $763.7 million from $1.24 billion, but the fourth-quarter figure was higher than 3Com's internal estimates of $675 million to $750 million, the company said. The loss seemed to match the First Call/Thomson Financial expectation, but CNBC reported that First Call is "scrutinizing" the numbers. The restructuring is 3Com's effort to shed unprofitable businesses after its past struggles to keep up with the much larger Cisco (CSCO Quote) and other rivals. It is closing its networking gear division and its analog modem business. Recently 3Com spun off its Palm (PALM Quote) handheld computer unit and is currently focusing on home networking, high-speed modems, wireless Internet telephony and networking for small businesses. Earlier today the company announced plans to buy Internet radio startup Kerbango for $80 million in cash and finished the day session 3%, or 1 11/16, lower. After the close it gained 5/16 of that back on Island, rising to 49 1/8 on 131,000 shares, and popped 53/64 to 49 33/64 on Instinet.
Tonight Conexant Systems (CNXT Quote) said it will acquire privately held HotRail. Jiggawhat? Gigabit. HotRail is involved in a business so muddled in technological jargon that it makes about as much sense as rap lyrics do to my grandmother. For the peeps not down with today's semiconductor lingo, lets just say that HotRail's multigigabit transceivers will help bump Conexant into the next generation of Internet infrastructure technology. After the announcement Conexant fell 3 1/4 to 47 1/2 on 23,000 Island shares.
You saw it here last night. Harmonic (HLIT Quote) got hammered, losing almost a third of its value after it warned that second-quarter earnings will fall short of analyst forecasts. Today it lost a further 42%. Late-night lurkers put a Band-Aid on the communications equipment provider's ouchie. The bleeding stopped and shares recovered 35/64 to 23 55/64.
Water ... water ... everywhere. Western Water (WWTR Quote) was perched on top of Island ECN and a few of the sharks were biting. The water rights company was 1/8 higher to 9/16 after rising more than 16% today. The California-based company, which develops, sells and leases water rights in the Western U.S., garnered a lot of interest on little news. An article today on IndividualInvestor.com noted that the rapid growth of desert states such as Arizona and Nevada has prompted one fund manager to buy Western Water stock. Aside from that brief mention the company's news well was dry.
Water ... water ... Wherever.net (WNET Quote). Traders said "Whatever!" to telecommunications company Wherever.net. After initial gains, night owls began to dump the stock. Today shares were lifted more than 10% after this morning's announcement that the telephony service provider will it received a $10 million investment from Pacific Electric Wire Cable Group, a Taiwanese telecommunications group. Profit-taking sent the company 5/32 lower to 3 3/32 on 76,000 Island shares.
Advanced Fibre Communications (AFCI Quote) fell 8 1/4, or 16%, today. But while the stock was slowly edging south all day, the decline was precipitous in the last hour of trading. Since there was no bad news to drive the drop traders picked up some shares at night in expectation of tomorrow's recovery. The California-based telecommunications company recovered 1 7/8 to 45 on 184,000 Instinet shares.
Anyone who buys a wireless Palm handheld will be able to access Juno Online Services' (JWEB Quote) Web access from anywhere within Palm's coverage area, the Internet service provider announced tonight. Juno recently introduced its mobile Internet service. The company popped 1 5/16 to 10 15/16 on the late-night news.
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| 10 most active stocks on Instinet (6:30 p.m. EDT) | |||
| Company | Price | Change | Session Volume |
| Microsoft (MSFT Quote) | 79 | +3/16 | 222,701 |
| Advanced Fibre Communications (AFCI Quote) | 45 | +1 7/8 | 184,300 |
| 3Com (COMS Quote) | 49 33/64 | +53/64 | 138,200 |
| Novell (NOVL Quote) | 9 1/16 | +5/32 | 108,600 |
| Intel (INTC Quote) | 131 3/8 | 0 | 108,082 |
| Conseco (CNC Quote) | 6 1/2 | +3/8 | 103,000 |
| Dell (DELL Quote) | 48 | +3/16 | 86,700 |
| Cisco (CSCO Quote) | 62 1/2 | +1/4 | 78,925 |
| WorldCom (WCOM Quote) | 39 3/4 | +1/16 | 74,033 |
| Amazon.com (AMZN Quote) | 36 3/4 | +1/4 | 56,200 |
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| 10 most active stocks on Island ECN (8 p.m. EDT) | |||
| Company | Price | Change | Session Volume |
| Western Water (WWTR Quote) | 9/16 | +1/8 | 367,861 |
| 3Com (COMS Quote) | 49 1/8 | +5/16 | 131,565 |
| Wherever.com (WNET Quote) | 3 3/32 | -5/32 | 76,500 |
| Harmonic ( HLIT Quote) | 23 55/64 | +35/64 | 39,265 |
| Novell (NOVL Quote) | 8 31/32 | +23/256 | 36,283 |
| Amazon.com (AMZN Quote) | 36 5/8 | 0 | 32,104 |
| Rambus (RMBS Quote) | 109 7/16 | +25/32 | 29,517 |
| Cisco (CSCO Quote) | 62 5/8 | +5/16 | 26,926 |
| Stratos Lightwave (STLW Quote) | 34 13/16 | +5/8 | 26,257 |
| Conexant (CNXT Quote) | 47 1/2 | -3 1/4 | 23,865 |
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