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Market Updates

Chip equipment gets a boost

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Chip equipment stocks are getting a boost higher this morning after J.P. Morgan upped its rating on shares of Applied Materials (NASDAQ:AMAT), KLA-Tencor (NASDAQ:KLAC), Novellus (NASDAQ:NVLS), Teradyne (NYSE:TER) and Varian Semi (NASDAQ:VSEA) to "long-term buy" from "market performs," saying the worst news is likely behind this beleaguered group.

J.P. Morgan believes near-term news in the sector will turn more positive than negative in coming months. While recent news for cuts in 2002 capital expenditures has been a negative and guidance has been less than thrilling, analyst Scott Williamson believes the bulk of the bad news is on the table and time for longer-term bulls to start feeding. Mr. Williamson said, "We believe a bottom in equipment orders has been reached and is reflecting positive inflection, as evidenced by yesterday's improved semiconductor book-to-bill of 0.78:1."

Shares of Applied Materials (AMAT) are trading $1.00 higher than yesterday's close of $39.49, KLA-Tencor (KLAC) are bid $1.29 above yesterday's close of $47.86 and Novellus (NVLS) are trading $38 in pre-market action, $1.77 above yesterday's close.

Stock futures green

Stock futures are showing a slightly higher open awaits stocks as S&P futures trade higher by 1.5 points, NASDSAQ future are up 11 points and Dow futures are posting gains of 33 points.

Fair value for the S&P 500 today is $0.96. HL Camp & Company has their computers set for program buying at $2.04 and set for selling at $-0.82. Fair value for the NASDAQ-100 today is $4.65.

Jeff Bailey
Senior Market Technician
Option Investor

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