Two Ways To Play: Markets Get Tough On Tech
Strengthen your portfolio in good times and bad.
Research In Motion Plunges
Shares of Research In Motion (RIMM) are trading sharply lower this morning. Bloomberg says the maker of BlackBerry phones reported earnings of $0.86 per share, missing expectations by a penny.
Revenues rose 15% to $2.57 billion, slightly below the $2.595 billion consensus. Analysts cited concerns over the company's gross margins as an eye-opener. For the quarter, that figure dropped to 47% from 50.7% in the previous period. Research In Motion's sales forecast met expectations, but profits were below estimates for the second straight quarter.
From the Bull Pen: Bulls can consider Marvel (MRVL) for an upside play. Sell stops can be set below $10 support. But the safer tech play may be in security software. McAfee (MFE) comes to mind. Bulls can consider entry if the stock can pull back to $32.
From the Bear Cave: The easy trade in Research In Motion is over. Google (GOOG) may be a better downside option with a buy stop above $450.
Tech to Suffer
According to Bloomberg, companies like Microsoft (MSFT) and Cisco Systems (CSCO) may lose $4.3 billion in orders next year as financial companies are forced to cut spending to the lowest levels since 2000. Larry Tabb of Tabb Group, which tracks securities firm budgets, says spending on technology in the financial sector could fall 20% to $17.6 billion next year, down from an estimated $21.9 billion in 2008. As companies cut back in businesses like asset securitization, Tabb says it would only make sense to eliminate the technology and resources used for those jobs. An estimated 20% of all global technology spending comes from the financial sector.
From the Bull Pen: Microsoft may still be the better upside play. Bulls can consider sell stops near in the $25.50-25 range.
From the Bear Cave: Those bearish on Cisco can consider a buy stop above $24.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng -1.33%, Nikkei -0.94%, Sensex -3.28%, Taiwan -2.16% and Shanghai -0.16%.
Glancing towards Europe, we see the CAC -2.18%, DAX -2.12%, FTSE -1.99%
As of 8:30 a.m. EST, S&P Futures are trading -22 points to 1191 and Nasdaq futures are off -34 points to 1646.
A Look At Commodities
Commodities are mostly lower. Crude oil is -2.29 to 105.75. Gold is +5.50 to 882.70. Silver is -0.022 to 13.200, and copper is -5.55 to 309.00.
The dollar index is -0.220 to 76.776.
On the Radar
GDP (q/q): 2.8% vs. 3.3% cons.
Personal Consumption: 1.2% vs. 1.7% cons.
Core PCE (q/q): 2.2% vs. 2.1% cons.
10:00 U. of Michigan confidence: 71.0 cons.
Happy Friday. Good luck and have a great weekend!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter