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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • Techs to the Rescue? By: Charles Payne 0 comments
    Sep 14, 2010 9:39 AM | about stocks: SAP, ORCL, CRM
    It was a good way to start the real market since upside attained since mid-August was smoke and mirrors. To be sure, yesterday's session wasn't convincing, and the market struggled throughout to maintain gains even into the final moments of trading. Yet, stocks held. In some ways, having to struggle might have added credibility, but make no mistake very few fence-sitters have changed their minds; those that seem to be looking for value and fun in the same package. Hmmm... that could only mean one thing, semiconductor stocks. Technology in general acted better, but the chips were dancing to a bullish report from the Gartner Group. I've always felt technology has to be a part of the parade, if not the drum major leading it, for rallies to gain and sustain traction.

    The SOX index climbed above its 20-day moving average, up 3.35% for the session, but still sees significant hurdles beginning at 330.0 to 340.0.
    Of course, chips can get hot at any time, but what's sizzling right now is everything connected with data networking and cloud computing. Each day has seen new deals, albeit not the mega-deals I'm looking for to catapult the market, but a steady stream of deals nonetheless. August was huge, with 1,170 deals in technology up from 993 a year earlier. The big deals have come from cash-rich behemoths and private equity firms.

    I'm still looking for a major bidding war north of $30.0 billion involving money raising efforts by several Wall Street firms.

    Not sure if there is a deal like that in software, although I think CRM could fetch $150.00 a share and get SAP (SAP) and Oracle (ORCL) upping each other.

    Small Business optimism edged up slightly, but overall the report was another disappointment. Capital spending decreased a point to a 35-year low reading of 44. I don't think passage of the small business lending bill will help overall confidence, which hinges on consumers and a less hostile political environment.

    We begin the day with a strong earnings report from Best Buy (BBY,) which may finally be taking advantage of the loss of a major competitor in Circuit City. The company posted revenue numbers that actually missed the Street, but $0.60 per share on the bottom line was well above consensus.

    Retail Sales Details
    By: Brian Sozzi, Equity Research Analyst

    It was good that retail sales beat on the headline and ex auto lines considering the soft patch in the economic data, but I was looking for more broad-based strength when seeing the numbers cross the wires initially. Sales were weighted in food and beverage and grocery stores, likely in the lead up to the holiday. Nonetheless, sales ex auto, building materials, and gas rose 0.5%, up from a -0.1% print in July.

    Notable increases:
    • Food and beverage stores: +1.3%
    • Grocery stores: +1.4%
    • Clothing and accessories stores: +1.16%
    Notable letdowns:
    • Furniture: -0.4%
    • Electronics: -1.07%


     


    Disclosure: None
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