Prudential thinks the new tax rules on depreciation will help the chip equips.
Pru on Semi Cap Equip : -- Before Open -- Prudential analyzes the impact of the fiscal stimulus package on group; notes that bill includes a 30% depreciation bonus for certain capital spending, including semi cap equipment, for a period of 3 years beginning 9/10/01 to 9/11/04. Estimates that bonus depreciation could have a tax benefit of about $700 mln and cumulative 3-year tax benefit of about $2.5 bln. Prudential believes package could increase some spending plans on the margin and sees the positive impact focused on leading edge tools, for 0.13 micron technology with copper interconnects; names AMAT, NVLS, KLAC, LRCX, FEIC, and RTEC as beneficiaries
08:16 ET CYMI Cymer cut to Neutral by Bear Stearns on valuation (46.11) Bear Stearns downgrades to NEUTRAL from Attractive based primarily on price. Though company continues to perform well, valuation is well ahead of a similarly situated peer group.
Translation--Bear Stearns wants in at lower prices, anyone that buys or sells based on these analysts upgrades or downgrades is sure to lose money. Analysts are notorious for downgrading at the bottom and upgrading at the top. And the downgrade comes on a day with the NAZ down by 35 points, to get the most bang for their buck.