Positive Intel Note Does Little for the Stock

Merrill Lynch analyst Joe Osha reiterated his optimistic outlook on the chip giant to seemingly deaf ears.
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SAN FRANCISCO -- Today's employment report has not led to further deterioration in the Treasury market, and that seems to be enough of a healthy sign for tech stocks for investors to reconsider the sector after yesterday's slide. The Nasdaq Comp was slightly lower two hours into today's session, as traders remained cautious after the volatility seen in the stocks for much of this week.

Chip king

Intel

(INTC) - Get Report

took a hit Thursday after some cautionary words from

BancBoston Robertson Stephens

analyst Dan Niles, who warned of weaker-than-expected average selling prices from Intel in its second quarter because more consumers were buying PCs with the cheaper Celeron chip than with the high-priced Pentium III.

But in a research note released this morning,

Merrill Lynch

analyst Joe Osha said there was no reason to believe average selling prices were falling more sharply than anticipated.

"Our checks with Intel also indicate that unit volume during the month of April was up in line with our expectations and that Pentium III uptake is proceeding in line with our model," he wrote. Osha reiterated his intermediate-term rating of accumulate and said that he is not changing his earnings estimates for the company for 1999.

However, Osha's positive outlook has had little impact on the stock so far this morning, as shares of Intel were trading only 5/8 higher at 60 5/16.

Online brokerage stocks were boosted by

Lehman Brothers'

coverage initiations on both

E*Trade

(EGRP)

and

Ameritrade

(AMTD) - Get Report

. Analyst Richard Repetto placed buy ratings on both E*Trade and Ameritrade this morning, setting respective 12-month price targets of 140 and 150. (Lehman Brothers has not done underwriting for either firm.)

In early trading, E*Trade hopped 4 3/16, or 4%, to 109 1/4, while Ameritrade edged up 17/32 to 109 1/32.

On the earnings front, shares of

QLogic

(QLGC)

, a supplier of storage area networks, have jumped after the company bested fiscal fourth-quarter estimates by 5 cents when it reported last night, logging earnings of 45 cents a share. The stock was lately up 17 1/8, or 23%, at 93.

Also, shares of entertainment software maker

3DO

(THDO)

were gaining early on today after the company posted fourth-quarter earnings of 9 cents a share last night, topping the consensus of 3 cents and the year-ago loss of 25 cents. The stock was up 13/16, or 12%, at 7 11/16.