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The Nasdaq Now: Apple Falls Again, but Is the Sell-Off "Overdone"?

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EZchip Semiconductor and Qualcomm were up on the day.

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MINYANVILLE ORIGINAL Strong economic data failed to lift US stocks out of the post-elections doldrums, as major US indexes, after a sharp plunge yesterday, stayed all but flat in mid-Thursday trading.

The Labor Department reported that jobless claims for the previous week fell 8,000 to a seasonally-adjusted 355,000, when the consensus was a reading of 370,000. Additionally, the US trade deficit narrowed to $41.55 billion in September, thanks to an increase in exports. Wall Street had forecast the deficit to widen to $45.0 billion.

Nonetheless, the Nasdaq Composite (INDEXNASDAQ:.IXIC) was down 0.35% to 2,926.93 points on average trading volume of 724.07 million as of 11:49 a.m. EST.

DUSA Pharmaceuticals (NASDAQ:DUSA) surged 37.72% to $7.96 on news that it would be acquired for some $230 million, or $8 a share, by India's Sun Pharmaceutical Industries. The price represents a 38% premium on DUSA's Wednesday closing price of $5.78.

EZchip Semiconductor (NASDAQ:EZCH) also jumped 15.22% to $34.98 after an expectations-beating earnings report. The company posted third-quarter earnings of $0.10 a share on revenue of $9.3 million, compared to the consensus estimate of $0.09 per share and revenue of $9.13 million.

Qualcomm (NASDAQ:QCOM) also enjoyed a strong 6.57% advance to $61.93. After the close on Wednesday, the mobile chipmaker reported estimates besting fiscal fourth-quarter results. Additionally, the company's current-quarter earnings forecast also beat expectations. Citigroup analyst Glen Yeung said that growing LTE-based smartphone demand is boosting Qualcomm.

"At the upper end of the high-end smartphone market, Apple (NASDAQ:AAPL) and Samsung (PINK:SSNLF), Qualcomm is seeing a noticeable shift to LTE devices," Yueng wrote in a report published Thurday. "In China, Citigroup expects smartphone [shipments] to increase from 186 million in 2012 to 317 million in 2013.

"At the core of this shift is the advent of retail $90-$120 3G smartphones. We anticipate Qualcomm will gain share in this transition."

Shares of Catalyst Pharmaceutical Partners (NASDAQ:CPRX) were hit hard, plunging 62.76% to $0.54, after the company's cocaine addiction treatment did not reach its goal in its clinical trial.

Universal Display (NASDAQ:PANL) also tumbled 17.67% to $23.20. The light-emitting diode technology developer surprised analysts with a third-quarter loss. The company also cut its full-year outlook to $80 million to $82 million from the previous range of $90 million to $110 million. Wall Street's projection was $99.2 million.

After an estimates-missing third quarter report, Windstream (NASDAQ:WIN) slid 8.60% to $8.61, hitting a new 52-week low in the process. The telecommunications company posted adjusted net income of $0.12 a share on revenue of $1.55 billion, when the mean estimate was $0.13 a share on $1.56 billion in revenue.

Apple was also down once again, falling 1.63% to $548.91 on worries that its chief supplier Foxconn would be unable to keep up with demand for the iPhone 5 because it had trouble meeting Apple's strict quality standards.

Analysts were more optimistic about the tech giant however. Oppenheimer analyst Ittai Kidron said in a research note that the sell-off was "overdone," adding, "We believe Apple's competitive position is unchanged and see it better positioned with a refreshed portfolio across all key segments heading into 2013. We see good potential for a rebound as iPhone/iPad demand holds up."

Brian White of Topeka Capital shared a similar sentiment, writing that that "this correction is similar to the three others experienced over the past thirteen months, all of which proved to be attractive buying opportunities."


Twitter: @sterlingwong
No positions in stocks mentioned.
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