Schaeffer's S&P 500 Index Hot Stocks Features Compuware, Microsoft, Yahoo!, PMC Sierra, and Dell

Business Wire, July 21, 2006

CINCINNATI -- Among the stocks featured in the July 21 edition of Schaeffer's S&P 500 Index Hot Stocks are Compuware (NASDAQ:CPWR), Microsoft (NASDAQ:MSFT), Yahoo! (NASDAQ:YHOO), PMC Sierra (NASDAQ:PMCS), and Dell (NASDAQ:DELL). Schaeffer's S&P 500 Index Hot Stocks 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. 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=PRSHS12M&PAGE=1 .

Schaeffer's S&P 500 Index Hot Stocks for Friday, July 21, 2006:

A daily feature available on SchaeffersResearch.com is the "SPX Hot Stocks" column. Each afternoon, we will provide a list of the day's top-20 performing stocks in the S&P 500 Index (SPX - 1,242.53) as well as the bottom-20 names. Featured along with this table will be news that is moving some of the securities, including a look at Compuware.

NOTE: Stocks trading under $5 per share have been eliminated from this listing of the top-20 and bottom-20 performing stocks.

After a monster session on Wednesday and a pullback yesterday, the SPX is once again losing ground, giving back more than half a percent. At the moment, only 120 of the 500 components of the SPX are ahead.

Compuware (NASDAQ:CPWR) leads the way into the SPX winner's circle today, showing gains of more than five percent after the company reported first-quarter results. Net income was $29.3 million, compared to $24.6 million in the same quarter of fiscal 2006. Revenue came in at $296.3 million.

Bill Gates is a little bit richer today, not to imply that he was hurting yesterday. The Dow Jones Newswires reported that Microsoft's (NASDAQ:MSFT) market capitalization increased $11.8 billion despite an earnings disappointment. The company reported that quarterly profit fell to $2.83 billion, or 28 cents per share, from $3.7 billion, or 34 cents per share, a year ago. Revenue for the period increased to $11.80 billion from $10.16 billion a year ago. Analysts expected MSFT to report a profit of 30 cents per share on revenue of $11.63 billion. At last check, the stock was up more than four percent after the company announced a plan to buy back $20 billion worth of its stock. The stock has pulled well clear of its 10-day and 20-day trendlines. If it pulls back, watch for signs of support from those trendlines. At last check, MSFT was ahead more than four percent.

Yahoo! (NASDAQ:YHOO) plunged on Wednesday, but the stock seems to have support at the 25 level. Bob Cringely at PBS reminded us this morning that "last week Yahoo and Microsoft supposedly connected their instant messaging systems in a move that will eventually allow full interoperability, which was viewed almost universally as a defense against the threat of Google." I think that's going to be a story worth following.

Brad Garlinghouse, senior vice president of Communications, Community and Front Doors, Yahoo! said that "Interoperability between IM services has consistently topped our users' wish lists, and through the collaborative efforts between Yahoo! and Microsoft we are delighted to provide our combined global users with the ultimate IM experience." This begs one very important question: does YHOO really have a department called Communications, Community and Front Doors?

Turning to the downside, Californian networking specialist PMC Sierra (NASDAQ:PMCS) was down more than 23 percent at last check. After the bell yesterday, the company posted a second-quarter loss of $31.3 million, or 15 cents per share. These numbers did not compare well with year-ago net income of $529,000, or zero cents per share. The stock is below its 10-unit and 20-unit daily, weekly, and monthly moving averages.

Dell (NASDAQ:DELL) stated that it expects second-quarter earnings of 21 to 23 cents per share, well below Wall Street's expectations of 32 cents per share. Furthermore, DELL placed revenue for the quarter at $14 billion, also missing the analyst forecast of $14.2 billion. The stock gapped lower this morning, falling to the lowest levels we have seen since October 2001. This morning it smashed below its 160-month moving average for the first time ever. A stock has to exist for 160 months before it becomes possible to calculate a 160-month trendline, so DELL's 160-monther came into existence only in November 2004, if my back-of-the-envelope scribbling is correct. It will be interesting to see how the stock closes the month. If it fails to climb back above 21.50, we can look back on this moment as the one when DELL's 160-month moving average failed at its first test.

Click the following link to see a Chart of the SPX 500 Index's Top-20 Percentage Gainers: http://www.schaeffersresearch.com/wire?ID=16465 .

Click the following link to see a Chart of the SPX 500 Index's Top-20 Percentage Losers: http://www.schaeffersresearch.com/wire?ID=16465 .

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