Definition of a bad day on Bay Street

Never one to ignore the delights of irony, did you see the NYSE this morning? Charged ahead a couple hundred points on some fabulous preliminary numbers out of IBM. IBM shares soared 6%, which can’t be easy for a stock with a market cap. of US$142 billion. This from the online WSJ:

“[IBM] Stock rallied Monday morning amid mixed earnings news and growing rate-cut hopes.

In late-morning trading, the Dow Jones Industrial Average was up 113.16 points, or 0.9%, at 12719.46, led by its component International Business Machines. The technology giant soared more than 6% after issuing preliminary fourth-quarter results that trounced analysts’ expectations. IBM said its earnings from continuing operations were $2.80 a share, up 24% from $2.26 a year earlier, while revenue climbed 10% to $28.9 billion, thanks in large part to the weaker dollar.

IBM’s rally lifted the broader technology sector. The Nasdaq Composite Index was up 1.1%, or 26.13 points, at 2466.07.”

For those investors that took Peter Misek of Canaccord’s advice on Friday and ditched IBM in advance of this 6% gain…well, sorry about that. UBS also downgraded the stock on January 7th (to “neutral”), mind you. But at least UBS can take some solace for not being wrong right out of the gate.

“Canadian Press
Friday, January 11, 2008

TORONTO — Shares in Research In Motion Ltd. pulled back more than 5 per cent Friday amid deepening concerns about how a slowing U.S. economy would affect the Canadian-based maker of BlackBerry mobile devices.

RIM shares traded down $6.39 to $95.41 at midafternoon on the Toronto Stock Exchange, where their 52-week range is between $126.34 and $46.83.

The TSX capped technology index was down 1.7 per cent on the session, while the technology-heavy U.S. Nasdaq market receded 1.4 per cent.

As the woes of the American financial industry intensify, investors are increasingly worried about the prospects for RIM sales to BlackBerry-affixed investment bankers and others in the industry.

“We have become decidedly more cautious in our outlook for the first half of the year,” Canaccord Adams analyst Peter Misek wrote in a research note as he downgraded RIM to “hold” from “buy.”

“Our longer-term 12-to-24-month view on the tech sector remains bullish; however, we must accept the reality that investors with a six-to-nine-month time horizon are likely to experience considerable volatility and undersized returns.”

In addition to RIM, Misek put a “hold” rating on Certicom Corp., whose stock slumped 11 cents or 6.8 per cent to $1.50, down from over $6 last spring.

He also downgraded or reduced price targets on others in the technology space, including Intrinsyc Software International Inc., which declined five cents to $1.04, and Absolute Software Corp., off a nickel at $13.40, as well as IBM, Comverse and Citrix.”

MRM