Although Wall Street opened the Wednesday session on a negative note, the Nasdaq Composite index and the Dow Jones are each adding 1%.
The current locomotive of blue chips is
(NYSE:WMT), which is rising 5% after posting losses yesterday in the wake of a profit warning.
While the Holiday Season is characterized by dull sessions, the market did not fail to take note of the profit warning released this morning by software security company
(Nasdaq:NETA), and shares are plummeting 67%. The plunge is affecting its Israeli rival
(Nasdaq:CHKP) as it loses 3.6% to $135.5.
The recent spate of profit warnings by technology companies as well as by companies associated with the blue chips sector, in addition to all too many macroeconomics markers, point to a significant slowdown in the American economy.
Traders respond to the slowdown in more than one way. On the one hand the slowdown affects the growth of companies and traders gets worried about the companies' future results, but on the other hand the slowdown increases the chances for further cuts in key interest rates. Traders are hoping that the cut will revive the slumping market.
Some traders say that the low prices of many technology shares make them a good Buy opportunity.
Israeli shares are trading mixed, and in line with the lackluster mark. But Israeli companies that today released profit warnings, are posting sharp drops.
(Nasdaq:NURM) is off 18.8% to $7.7 after today announcing that it has completed the registration of about 1.5 million shares that in the past were issued via a private offering.
(Nasdaq:MGIC) is off 10% to $2.2, 90% short of the price of shares in March this year. In its profit warning for the fourth quarter of 2000 the company said revenues will fall 20% short of forecasts, and that it expects a loss of $6 million.
Magic's profit warning is indicative of the slowdown in magic's market, and in addition, it is a mark of the company's unsuccessful launching of its new strategy of tools for developing e-commerce applications and customer relationship management tools, a sector which was expected to become the company's new growth engine.
Web-performance solutions company RadView Software (Nasdaq:RDVW) is down 21.2% to $2.5. RadView released before opening today a warning that its revenues in the fourth quarter of 2000 will total $2.7 million to $3 million against the sales forecast of $3.6 million. RadView's sales in the fourth quarter of 2000 are expected to fall short of its sales in the third quarter even though the fourth quarter is considered a strong quarter for companies that sell their products to organizations. The company expects a loss of 24 cents per share in the fourth quarter, against the predicted loss of 18 cents per share.
(Nasdaq:SPNS) is up 15% after leaping earlier over 30%. The company today announced that it has completed a $15 million financing round by private placement. The investors were the venture capital fund Magnum Technologies Fund and the Israeli company
(Nasdaq:FORTY). The companies invested in bonds convertible to Sapiens shares at an exercise price of $1.5.
Sapiens shares were recently slammed after the company released a profit warning in the third quarter of 2000 following the cancellation of its planned merger with
. As of the beginning of September, Sapiens shares have lost over 80%. Today's gains apparently make sense as the financing round provides the company with much-needed cash for its immediate needs, and is expressive of the strategic partners' faith in the company.
(Nasdaq:BVRS) is leaping 64.3% after yesterday adding 100%.
(Nasdaq:CKSW) is rising 15.6% with no apparent reason, and
(Nasdaq:CTCH) is off 7.1% to $4, 20% below its September price.