For a day that saw a pretty sprite bounce in the indexes, the “canaries in the coalmine,” Goldman Sachs (GS), Bear Stearns (BSC), Lehman Brothers (LEH) and their ilk, barely got a look today. Housing and mortgage was again the stand-out weak-link. Remember how intimate housing had become with the market as a whole a few years ago? Its astonishing how folks have been able to pretend that the crashing of the same will have no broader repercussions...After hours, Altera Corp. (ALTR), a manufacturer of programmable logic devices, said second quarter profit increased year-over-year, despite a dip in revenues. Revenues declined 4% year-over-year to $319.7 million from $334.10 million. However, it was even worse than that. If it wasn’t for some good old channel stuffing, Altera would have reported a large miss. Receivables increased from $130-million just 3-months ago and $93.3-million at the end of December to $188.5-million in the June quarter just ended. Also, year-over-year growth in North America dropped by 19-percent. But as most well educated semiconductor has learned to do, they too rolled-out some plans to financially engineer their reality. Altera declared a 4-cent per share dividend and said that it intends to repurchase up to $1.5 billion of its common stock from the beginning of 2007 through the first half of 2008, using a “long-term credit facility.” Also, Texas Instruments (TXN) saw revenues drop to $3.42-billion from $3.70-billion year-over year even as Inventories increased slightly year-over-year. Gross profits dropped from $1.907-billion to $1.784-billion. No growth at all. Why the infatuation with tech and semiconductors? I see nothing but overcapacity, collapsing margins and lower profits. At least its not housing. The Dow Industrials recovered nearly 100-points of what it lost last Friday.
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