Schaeffer's Daily Market Blog Features: Applied Materials, Big Lots, Pfizer, Talbot's, and the...

CINCINNATI -- Among the stocks featured in the August 16 edition of Schaeffer's Market Blog are Applied Materials (NASDAQ:AMAT), Big Lots (NYSE:BLI), Pfizer (NYSE:PFE), Talbot's (NYSE:TLB), and the Semiconductor HOLDRS Trust (AMEX:SMH). Schaeffer's Market Blog is just one of the many free market

commentaries written every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB13M&PAGE=1

Schaeffer's Market Blog for Wednesday, August 16, 2006:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB13C&PAGE=1

Posted 10:10 AM AMAT Lower After Disappointing Forecast

Late yesterday, Applied Materials (NASDAQ:AMAT) announced third-quarter earnings of 33 cents per share, sales of $2.54 billion, and new orders totaling $2.67 billion. These results topped the consensus estimate for 30 cents per share on revenue of $2.4 billion. AMAT estimates that its target market will expand to $37 billion by 2008, up from $20 billion in 2004. AMAT also noted that it is looking for new opportunities outside of the semiconductor industry, such as solar energy through the acquisition of Applied Films, which makes machines for solar cells, flat-panel displays, and energy-efficient glass.

AMAT has struggled lately, dropping to a near-term low the week of July 21, thanks to the resistance of its 10-week moving average. The reason for the company's recent struggles is that some investors think that the company's order book will slow down. AMAT's Chief Executive Mike Splinter confirmed investor's fears by stating (in a conference call) that the firm's orders and sales will come in flat during the fiscal fourth quarter. Splinter forecast earnings of 29 to 30 cents per share, lower than the consensus estimate. Therein lies the reason for the company's 1.5-percent drop early this morning.

Posted 12:16 PM Big News from Big Lots

Earlier this morning, closeout retailer Big Lots (NYSE:BLI) announced a second-quarter profit of four cents per share and upped its 2006 earnings guidance. In the same quarter last year, BLI posted a loss of 12 cents per share. According to Thomson First Call, the consensus estimate called for a loss of six cents per share. The company stated that its results reflected significant expense leverage and incremental gross margin dollars. Looking ahead, BLI now expects to report 2006 earnings from continuing operations between 62 and 67 cents per share. Originally, the retailer forecast earnings of 44 cents to 49 cents per share. Today's news has the shares more than three percent higher.

Posted 12:28 PM Changes at Pfizer

Late yesterday, Pfizer (NYSE:PFE) announced that its Vice Chairman Karen Katen will leave the company while Vice Chairman David Shedlarz will receive an expanded role. In late July, PFE named Jeffrey Kindler (at the time a Vice Chairman) as its new CEO. This move surprised many of PFE's investors, as Katen and Shedlarz had been with the company longer than Kindler. PFE stated that he moves were designed to "streamline the company's operations and speed decision-making in a rapidly changing health-care marketplace."

Technically, the Dow component has peeked its head back above the 26 level, as it did earlier this year. The stock's move has pulled its 10-week moving average to the verge of a bullish cross of its 20-week counterpart. If this technical formation comes to fruition, it could signal continued upside for the pharmaceutical company.

Posted 12:42 PM Talbot's Advances

Earlier this morning, Talbot's (NYSE:TLB) announced a second-quarter loss, thanks to acquisition costs and stock option expenses. The retailer lost seven cents per share, compared to earnings of 35 cents per share a year earlier. Along the lines of the old question of whether or not a falling tree makes a sound if no one is around to hear it, is a less-than-expected loss a good thing? Apparently the Street thinks so, as the consensus estimate called for a loss of eight cents per share. I say that the Street thinks so because the shares are more than eight percent higher.

Today's news sent the stock through resistance at the 22 level. If the company's climb continues, today is shaping up to be only the second day the equity has topped the 22 level since June. Furthermore, the shares have jumped through resistance at their 10-week and 20-week moving averages. Let's not get carried away though, it will take some help for the stock to break through the overhead resistance leveled by its 10-month moving average.

Posted 2:08 PM Semiconductors' Run May Not Last

Semiconductors have been one of the more popular sectors over the past few trading sessions as the Semiconductors HOLDRS Trust (AMEX:SMH) has mounted a gain of about 12 percent since its July low. That certainly surpasses the S&P 500 return of four percent over the same period. Option activity shows, however, that traders are quickly trying to jump on the bullish semiconductors bandwagon. Call options on the ETF ran 6-to-1 compared with put options yesterday, and that ratio is closer to 10-to-1 today. Over-optimism could end up halting the rallying sector in its tracks. The 80-day moving average coincides with a previous resistance level for SMH around $33.20.

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Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method.