The story of the market this morning is absolute carnage in the chip sector. Two days ago, the talk was about how money was going to come out of energy and commodities and drive technology. This morning the talk is about how competition is hurting the chip business.
The primary villain in the chip group is Lam Research (LRCX), which is down more than $7 a share following its earnings last night. On the surface, the report doesn't look that bad. But apparently business is weaker than expected, and that resulted in some downgrades.
With Intel (INTC) already causing some pressure on chips and Apple (AAPL) getting an ugly "sell the news" reaction, chips were set up for some selling.
Pharmaceutical stocks are holding up the Dow. We also have some strength in banking and retail, which is keeping the S&P 500 downside contained. Right now, the market is about technology, and the question is if weakness will spill over or the downside will be contained by some good earnings reports next week.
P.S. Will you be there when Cramer makes his next move?
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Rev Shark Blog Freefall, Here We Come 1/18/2007 10:11 AM EST The market gets hit ahead of Bernanke's comments.
Rev Shark Blog Apple Raises a Red Flag 1/18/2007 8:38 AM EST If it can't rally on great news, which tech stocks can?
Rev Shark Blog No Apple Traction on Great Quarter 1/17/2007 5:12 PM EST The profit was large, but the guidance predictably lowballed, and shares settle some after hours.
James "Rev Shark" DePorre is the founder and CEO of Shark Asset Management, an SEC-registered investment advisory firm. He also operates sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children.Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here to send him an email.
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