The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (May 30, 1997)

Sales of Pepcid undoubtedly soared today as the stock market began the session with a major case of indigestion, courtesy of INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %>. Yet it appears the heartburn really was just indigestion, not a massive coronary.

In case you haven't already heard, Intel warned that its second-quarter revenue and earnings will be lower than the company and the Wall Street community expected. The stock plunged some $20 a share at the open, but gradually recovered some of the damage through the day (losing 7.5% for the whole session).

Being a technology linchpin stock, the news had a devastating effect on the Nasdaq Composite early in the day. Immediately after the bell, the Nasdaq plunged more than 50 points (the rough equivalent of 250 points on the Dow). In a classic case of over-reaction and panic, short-term bettors dumped the entire technology sector wholesale. But within another hour or so, a flurry of investors came back into these stocks, picking up bargains littering the market floor.

I'm the first to admit I'm not a hi-tech wizard, and I do own some Intel, so I don't want anyone to take my comments without that context, but are you serious? Today is one day where I wished for twenty or thirty minutes I were a day-trader. Any money I had sitting idle would have been poured into the tech stocks this morning. Five- and six-buck moves down and then back up were the standard today as everyone panicked and the buyers came swooping in behind them.

We're talking about a problem that appears primarily to be a normal blip in a product transition, during the usual slow quarter for the tech sector. With the market dominance, amazing financial strength and terrific track record, I can't imagine Intel suffering too long about this. But then again, I've always been a "half-full" rather than "half-empty" kind of guy. It looks like an investor's invitation to me. Have a Foolish weekend.

Monthly Growth Screens
(Jan. 3 to present)
27.89%  Relative Strength 
13.40%  S&P 500 Index 
12.77%  Low Price/Sales 
-2.12%  Investing for Growth
-2.43%  YPEG Potential 
-5.15%  Unemotional Growth 
-14.58%  EPS Plus RS 
-24.73%  Formula 90 

Annual Value Screens
(Jan. 1 to present)
14.43%  Dogs of the Dow  
13.69%  Dow Jones Ind Avg 
7.50%  Beating the S&P
6.10%  Unemotional Value  
6.10%  Beating the Dow
5.96%  Dow Combo 
-0.02%  Foolish Four