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Novellus warning puts pressure on semiconductors

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Yesterday's late afternoon earning's warning from Novellus (NASDAQ:NVLS) that it expects to post a loss in the first quarter and could post another loss in the second quarter has some semiconductor stocks seeing red this morning. Yesterday, shares of Novellus (NVLS) finished the session at $41.60 and are trading near the $39 level (-6.25%) in pre-market trading.

Lehman Brothers analysts noted that the order outlook for Novellus (NVLS) is weak, and that the new order guidance is more than 15% lower than guidance given six weeks ago.

Novellus' outlook is putting pressure on other semiconductor equipment manufacturers like KLA-Tencor (NASDAQ:KLAC), Applied Materials (NASDAQ:AMAT), Lam Research (NASDAQ:LRCX) and Teradyne (NYSE:TER) in pre-market trading.

Bond YIELDS fractionally higher

In last night's market wrap on premierinvestor.net I went into great detail about bond YIELDS and how I felt they might impact stock trading near-term. This morning bond YIELDS are up fractionally, with the 10-year YIELD ($TNX.X) at 4.764% and 5- year YIELD ($FVX.X) at 4.098%. We'll want to keep a close eye on the 5-year YIELD today on any break in YIELD below the 4.037% level near-term.

Stock futures lower

Stock futures are lower this morning with S&P futures trading down 3 points at 1,141. NASDAQ futures are lower by 6 points at 1,599 and Dow futures are down 20 points at 9,845.

Fair value for the S&P 500 today is $0.70. HL Camp and Company has their computers set for program buying at $1.82 and set for selling at $0.82. Fair value for the NASDAQ-100 today is $2.25.

Jeff Bailey
Senior Market Technician
Option Investor

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