Intel (NASDAQ: INTC) is beginning to offer its new "Atom" chip, which is designed to work in "low-end "netbooks" and other mobile computing devices, " according to the FT.
The trouble is that it is a chip for devices that no one wants.
Intel is trying to drive a wedge between low-end laptops that weigh only a couple of pounds and new smartphones like the products from RIM (NASDAQ: RIMM) and just about every other large handset company. The new smartphones can access the internet and use WiFi hotspots instead of the cellular system, access 3G broadband wireless, and read e-mail and attachments. Cheap laptops now cost as little as $500.
Intel is up against a PC market that is growing more slowly each year, especially in large markets like North American and Europe. It has decided to launch a product in the hope the new devices will come along because the chip is available.
Unfortunately, no one wants the products that Atom would drive. The niche is already crowded.
Douglas A. McIntyre is an editor at 247wallst.com.
U.S. stock futures were lower Tuesday morning, indicating stocks would likely start the same. Investors' concerns about the financial sector dampened sentiment, but oil prices continued to decline and could offset some of the negative mood. Still, housing and inflation data are on tap before the market opens today. And of course earnings with The Home Depot already beating investors' expectations this morning but with Staples issuing a warning.
A day after smaller Lowe's (NYSE: LOW) reported a profit drop, The Home Depot (NYSE: HD) followed suit, reporting a 24% profit decline for the second quarter. It held onto its earnings outlook as second-quarter net fell 24% to $1.2 billion, or 71 cents per share. Sales declined 5.4% to $21 billion. Analysts had projected earnings per share of 61 cents on revenue of $20.58 billion. Home Depot shares rose 2% in premarket trading.
Other retailers scheduled to release earnings include discounter Target (NYSE: TGT) -- could it follow Wal-Mart's results? -- while Hewlett-Packard (NYSE: HPQ) is to report after the close -- AP preview.
Meanwhile, Staples, Inc. (NASDAQ: SPLS) issued a profit warning, saying that "Challenging market conditions continued during the company's second quarter, resulting in weaker than anticipated results in Staples' pre-acquisition business." Staples said sales increased approximately 3% and earnings per share decreased approximately 15% yoy. Shares of Staples declined nearly 6.5% in premarket trading.
"I've always been a big fan of putting into the market on a regular basis regardless of what is happening in the overall market," explains Chuck Carlson, long considered one of the advisory industry's leading experts on dividend reinvestment plans.
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Carlson says, "If I've learned anything in the more than a quarter of a century of following the markets, it is this fact - buying stocks when you know you should (i.e. during sharp down moves) is really difficult. Our heads says we should; after all, substantial market downturns create the best values.
"But our emotions usually take control, thus making it very difficult to pull the trigger and put money into the market when stocks are falling.
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Stock futures were higher Thursday morning, as bulls tried to answer to two bear days. Wal-Mart reported this morning, beating estimates and boosting guidance as well as Street sentiment. Still, coming ahead is inflation data at 8:30 a.m. Economists expect CPI to rise 0.4% in July, and could very well impact markets. Meanwhile, oil prices rose and the EU reported that euro-zone economy contracted 0.2% in the second quarter.
Wal-Mart Stores Inc. (NYSE: WMT), the world's largest retailer,reported a second-quarter earnings growth of 17% to of $3.4 billion, or 87 cents a share, beating analyst estimates of profit of 84 cents a share. Revenue rose 10% to $101.6 billion, slightly below estimates. The company also boosted its full-year earnings forecast. The company benefited from the challenging economic conditions as shoppers looked for lower prices. Its cost cutting measures also helped. WMT shares are gaining nearly 1.5% in premarket trading.
As Apple Inc. (NASDAQ: AAPL) shares rose in recent years, many have tracked its progress as it surpassed one major company after another in market capitalization. Well, All Things Digital noticed that Apple can put another check mark, this time as it passed Google Inc. (NASDAQ: GOOG). Yes, Apple is now larger than Google.
TheStreet.com's Jim Cramer says all that money has to go somewhere, and this is a likely destination.
Clash of the ideals! Oil's down, and what can you buy when there's so much bad bank news? What can you buy when Wachovia (NYSE: WB) (Cramer's Take) is boosting reserves and Morgan Stanley (NYSE: MS)) (Cramer's Take) is still being pursued by authorities and JPMorgan (NYSE: JPM) (Cramer's Take) says July stunk and UBS (NYSE: UBS) (Cramer's Take) is so tarnished that you can't believe it was once the most conservative blue chip out there.
The answer is tech, of course!
Wait a second. Would anyone mind if we actually had a reason to buy tech beyond the Kindle, the device that made Citigroup gaga about Amazon (NASDAQ: AMZN) (Cramer's Take) -- not that you needed a device to do that.
Sure, we have pre-seasonality. Remember, you are supposed to buy tech at the end of the summer, not that anyone waits that long.
10 Tech Giants to Buy Now Shares of companies such as IBM, Nokia and Microsoft have taken a hit along with the rest of the market, but they don't deserve to be this cheap. Other tech stocks to consider include Apple, Cisco, Google, HP, Intel, Oracle and Qualcomm. Ten Tech Giants to Buy Now - Kiplinger.com
New Life for Grocery Store Standbys Innovation is Pinnacle's lifeblood. The N.J.-based company -- which so far owns or licenses more than a dozen food brands -- specializes in acquiring venerable, but stagnant, brand names in need of TLC. It then works to breathe new life into them with updated formulations, new products, improved packaging, added convenience and smart marketing. Among the brands in Pinnacle's cub bard are Duncan Hines, Lender's Bagels, Log Cabin, Hungry Man, Mrs. Butterworth, Aunt Jemima, Swanson and more. Pinnacle gives new life to old standbys - USATODAY.com
Intel (NASDAQ: INTC) knows that the market for basic server and PC chips will not grow as fast over the next five years as it did over the last five. The economy plus high market penetration will see to that.
So, Intel is looking to new markets to save its bacon. It has already entered the segment for relatively low-powered chips for handheld "computers." Whether that business will ultimately be large is anyone's guess.
According toThe Wall Street Journal, the world's largest chip company "is providing the first details of a chip technology that is designed to help break into new markets, starting with high-end graphics used for computer games and animation." This technology will help higher end PCs run games and video content.
With Intel's balance sheet and big share of the current PC market, the announcement could spell gigantic trouble for AMD (NYSE: AMD) and Nvidia (NASDAQ: NVDA). A little over two years ago AMD bought graphics chip company ATI. So far, the deal has been a bust.
Concerns that the graphics chip market could get crowded and that margins could be under pressure have already driven AMD and Nvidia to recent 52-week lows. Over the last year, Intel shares are off about 5%. Shares in the other two companies are down over 60%. With Intel coming into the market, that could actually get worse.
Back in the day when internet companies ruled the rolls of the Nasdaq, a number of online and tech companies had venture capital arms. Intel (NASDAQ: INTC) has kept its to this day. The tech collapse of 2000 and 2001 eliminated most of those funds.
Now Google (NASDAQ: GOOG) has decided to revive the tradition of big tech companies spreading money around. According toThe Wall Street Journal, "The group will be lead by David Drummond, Google's senior vice president of corporate development and chief legal officer."
The move is a bad idea because it could alienate current and future Google partners. There is still an abundance of venture capital, so it is not as if the search company is filling a hole in the market.
The trouble is that Google could put money into a wireless broadband company only to find down the road it wants to form a partnership with one of that company's competitors. Should a firm risk doing business with Google when the giant internet company owns a piece of its nemesis?
Google may like the idea of supporting startups that are aligned with its goals. But it is cutting off the option of doing business with companies that don't have Google backing but do have services Google wants.
It has been widely anticipated that the EU would bring new antitrust charges against Intel (NASDAQ: INTC). The FTC and other US authorities are chasing the largest chip company in the world for similar reasons. South Korea has already fined Intel for anti-competitive behavior.
The theory behind the charges is that Intel induced PC companies and their retailers to use its chips and not those from rival AMD (NYSE: AMD). According to The Wall Street Journal, "The European Union launched new antitrust charges against Intel Corp., saying the chip giant paid rebates to a major retailer to encourage it not to carry computers using chips from smaller rival Advanced Micro Devices Inc ."
If the charges are true, it shows the extent to which a company of real size, like Intel, can be its own worst enemy. Microsoft (NASDAQ: MSFT) ran into similar problems a decade ago for being too aggressive killing off competition in the browser and media player markets.
The irony of Intel's legal bind is that it almost certainly did not need to pressure or give incentives to keep AMD in a distant second place. It had the balance sheet to keep margin pressure on AMD and the engineering prowess to offer better chips.
Arrogance and carelessness often go with being in first place. This time it appears that it has caught up to Intel.
Douglas A. McIntyre is an editor at 247wallst.com.
Hector Ruiz, the CEO who almost ruined AMD (NYSE: AMD), is gone, moved up to the chairman's role. and replaced by the company's COO Dirk Meyer. According toThe New York Times, "Mr. Meyer, president and chief operating officer, is widely respected and admired by other A.M.D. technical employees and also has the confidence of Wall Street analysts." AMD lost another $1.2 billion in the latest quarter making the move almost essential to the firm's survival.
During the time Ruiz has been CEO, AMD has fallen behind Intel (NASDAQ: INTC) in the power and efficiency of its chips. While Intel made it to market with dual and quad-core processors, the AMD "Barcelona", meant to be their dog in the fight, was delayed.
Ruiz's colossal mistake was buying graphics chip company ATI and pushing his company's debt up to $5 billion. AMD now struggles to make its debt service.
Shareholders have been calling for Ruiz to step down for over a year. The AMD share price was above $40 just over two years ago. Now, it often trades below $7.
Ruiz will be remembered as a poor strategist who pulled his company into a precarious position. He is best gone. And, wont be missed.
Douglas A. McIntyre is an editor at 247wallst.com.
Most investors probably think that PC sales in the U.S. are a bit slow these days because of the recession. Now, they can sleep better because industry figures for Q2 show they are right. According toThe Wall Street Journal, "Gartner Inc. said world-wide PC shipments grew 16% in the period, with U.S. shipments growing 4.2%."
The only real warning sign in the data is that units sales growth is slowing some in Asia. Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) still have the largest market shares worldwide while Apple (NASDAQ: AAPL) shipments grew 38% in the U.S. during the period.
The important news is that Asia may not be able to make up for slowing U.S. sales growth. If formerly hot markets like China and India are not doing terribly well, the entire PC industry is in for a choppy time.
The data contradicts information from the recent Intel (NASDAQ: INTC) earnings. Not only is the company doing well, it said the rest of the year looked bright. Someone must be doing OK selling PCs and servers somewhere. The Gartner research appears to say otherwise.
For investors in PC and chip companies, it appears the information about how the industry is doing has become confused. Now they can join shareholders in almost every other sector of the market where no one seems to have a handle on what is happening.
Douglas A. McIntyre is an editor at 247wallst.com.
Today was a clear win for the bulls, although the bears aren't forgotten by any measure. Oil fell another $4.00 today and to around $134/barrel. The CPI report also came in less timid than some PPI watchers were expecting, although it is still very high. Today's rally is probably more attributable to pricing action in banking and transportation stocks. Even the stodgy FOMC minutes didn't hurt today.
Below are the unofficial closing bell levels for index levels today:
Airline earnings came out very cautiously but not as bad as many would have guessed and didn't have the ring of any immediate death sentences for the industry. AMR Corp. (NYSE: AMR), the parent of American Airlines, managed to post better than expected gains before items even if its losses were near $1 billion. Its shares were up over 33% at $5.90 in today's final minutes. This may have actually been the best day ever for major airline stocks.
After hitting a one-year high of $16.19 last July, the stock hit a one-year low of $4.53 yesterday. AMD opened this morning at $4.90. So far today the stock has hit a low of $4.68 and a high of $4.95. As of 1:55, AMD is trading at $4.93, up 21 cents (4.4%). The chart for AMD looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a January covered call at the $5 level. A covered call is an options position that combines the purchase of stock with the sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 30% return in just 6 months if AMD is above $5 at January expiration. AMD would have to fall by more than 21% before we would start to lose money.
AMD hasn't been below $3.90, which would be the break-even point, at all in the past year and has shown support around $4.50 recently. This trade could be risky if today's encouraging Intel results are a result of them taking even more market share from AMD, but even if that happens, this position could be protected by the 30% downside protection on this trade.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in AMD. He does control bullish hedged positions in INTC.
Intel (NASDAQ: INTC) delivered extremely good earnings, surpassing what most analysts thought the big chip company would deliver. Global notebook sales were the key source of the company's success.
With 80% of the world's PC and server chip sales, Intel has little to compete with but itself. That may prove to be its undoing. Late word is that Intel is about to be hit by major antitrust charges in Europe. According toThe Wall Street Journal, "European regulators are preparing to file new antitrust charges against Intel."
The case against Intel -- the same as the ones being brought in the U.S. and South Korea -- is that the company took a number of actions to shut out sales of chips and computers with chips from smaller competitor AMD (NYSE: AMD).
Intel has begun to take on the role that Microsoft (NASDAQ: MSFT) has a decade ago. It has become so big that authorities are questioning how it got to its place of dominance. In essence, regulators are saying Intel cheated.
While Intel may suffer fines and other sanctions, the cases against the company may be the only chance AMD has of surviving. With over $5 billion in debt, operating losses, and falling gross margins, reparations from Intel's antitrust cases are probably its only life preserver.
U.S. stock futures were lower Tuesday morning, indicating stocks would likely start the same. Investors' concerns about the financial sector dampened sentiment, but oil prices continued to decline and could offset some of the negative mood. Still, housing and inflation data are on tap before the market opens today. And of course earnings with The Home Depot already beating investors' expectations this morning but with Staples issuing a warning.
Stock futures were higher Thursday morning, as bulls tried to answer to two bear days. Wal-Mart reported this morning, beating estimates and boosting guidance as well as Street sentiment. Still, coming ahead is inflation data at 8:30 a.m. Economists expect CPI to rise 0.4% in July, and could very well impact markets. Meanwhile, 
Closing Bell: Dow ends higher; HPQ, NOVL, PAY climb, EBAY, NVTL decline
Most likely, you'll determine the fuel for the car of the future
Chasing Value: Considering Berkshire Hathaway... again
