Market Pain Returns
For the week, the LR Index was down 16.77 (2.36%) from its close of 681.20 last Friday.
Friday's sell-off followed a disappointing unemployment report released this morning. The Department of Labor reported 133,713 job cuts in December, more than 3 times the amount in November. Indeed, jobs were the theme of the day: layoffs were reported today at AT&T Corp. (NYSE: T) (see AT&T Broadband Pares Cable Crew) and ADC Telecommunications Inc. (Nasdaq: ADCT) (see ADC Cuts 400 Jobs).
Applied Micro Circuits Corp. (Nasdaq: AMCC), a maker of chips used in opto-electronic equipment, was down $10.75 (14.65%) to $62.63, in relatively heavy trading. Banc of America lowered the firm's target price from $160 to $120 in light of easing in market capitalizations but kept its strong buy recommendation, citing strong demand for AMCC’s products.
“We are definitely keeping our Strong Buy rating on AMCC, but we have eased our price target in light of softening market capitalizations,” says Alex Gaunau analyst at Banc Of America. PMC-Sierra Inc. (Nasdaq: PMCS) and Vitesse Semiconductor Corp. (Nasdaq: VTSS), which compete in the same space, were down $5.12 (7.00%) to $68.00 and $3.44 (6.27%) to $51.38, respectively.
Even industry heavyweight Cisco Systems Inc. (Nasdaq: CSCO), which started the day on an up tick, closed down $4.87 (11.64%) to $37.00. This comes in spite of comments made by Credit Suisse First Boston that Cisco had bottomed out.
Other companies with large downward moves included Foundry Networks Inc. (Nasdaq: FDRY) down $2.37 (16.17%) and ONI Systems Inc. (Nasdaq: ONIS) down $6.00 (18.11%) to $27.13.
-- Matt Malina, research associate, Light Reading http://www.lightreading.com