EPS100Momentum (71.59)

Vast Majority of Semiconductor stocks are Raising Guidance for next Qtr.

April 29, 2010 – Comments (0) | RELATED TICKERS: CRUS , ISSI , GSIT

Congrats go to Jody Osborne 
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

March gets off to a bullish start with the technology sector leading the way. The Dow (DJI) closed the session with a gain of 78.53 points to 10,403.79. The S&P 500 (SPX) added 11.22 points to 1,115.71. The Nasdaq (COMP) tacked on 35.31 points to 2,273.57. Volume remained light with the NYSE trading 966.9 million shares and the Naz turning over 2.47 billion shares. Market breadth was positive by a 24-to-6 and 20-to-7 margin on the Big Board and Naz respectively.

The tech sector outperformed the broader market thanks to strength in the semiconductor sector. SanDisk (SNDK) was a big reason why with the flash-memory maker raising its earnings outlook. SNDK stated that the outlook for the chip sector looks strong in the next few years and backed this view by raising its guidance. This led to a gain of 11.94 percent for the stock to a price of $32.63, which is a new 52-week high.

News that chip sales in January rose 0.3 percent from December, but were up nearly 50 percent from the year ago period also benefited the tech sector. Shares of chip giant Intel (INTC) gained 1.66 percent to $20.87, not far from its 52-week high of $21.55. Overall, the Semiconductor HOLDRs (SMH) rose 2.43 percent to $27.02.

Shares of AIG (AIG) gained ground Monday after the financial giant announced plans to sell its Asian life insurance unit to Britain's Prudential group. The purchase price is expected to be near $35.5 billion, which will provide capital for AIG to pay back a portion of its bailout money from the government. AIG shares gained 4.24 percent to close the session at $25.82. Obviously, AIG shares have been rather volatile with a 52-week range from $6.60 to $55.90.

Berkshire Hathaway (BRK.A) shares gained ground Monday as well, rising 2.51 percent on the session. Warren Buffett stated in his annual shareholder letter that Berkshire's earnings rose 61 percent in 2009 and its book value was up 20 percent to a record high. Nonetheless, Mr. Buffett did note that consumer spending weakness could last quite a long time. Those wanting to buy Berkshire A shares only need $122,801 for one share.

Economic news will be heavy this week with data on manufacturing and personal incomes reported Monday. The ISM Index did fall to 56.5 in February from 58.4 last month, but remains in expansion territory. Within the report, new orders remained strong at 59.5 and the employment component rose nearly 3 points to 56.1. Personal incomes rose 0.1 percent month to month and are up 1.1 percent year on year. Consumer spending was up 0.5 percent for the month and is up 3.5 percent this past year. This data was strong enough to keep stocks positive, but the focus remains on the employment situation with data on nonfarm payrolls due out Friday.

Jody Osborne 
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site