Diamonds and Dogs

2/19/16

Applied Materials (AMAT), the world's largest chip equipment maker, surged 7% thanks to better than expected earnings. The supplier to Intel and other semi firms, easily beat earnings and sales estimates thanks to shifting demand for 3D NAND chips. The company is also forecasting higher-than-expected profits and revenue for the current quarter helped by rising demand in China. In a market where most sectors are struggling, the chips and chip equipment stocks are perking up.

A Deere in the headlights. Deere (DE) fell 4% today on disappointing earnings guidance. The agricultural equipment maker beat Wall Street's expectations for the first quarter, but cut its full-year earnings forecast. Deere, Caterpillar and other constructions makers have struggled in the last year due to declining global demand particularly out of China, but falling commodity prices have also made farmers less likely to buy new equipment. Looks like the correction for Deere and others continues.