DJ MARKET TALK: Start-Up Telecoms Under Severe Pressure
03 Apr 11:24
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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11:23 (Dow Jones) Shares of several start-up telecom companies plunged
Tuesday as fears ran through the market that some bankruptcies might pull down
an entire sector. According to one analyst, the fear (and he doesn't buy it) is
that if Winstar Communications (WCII), which delayed its 10-K filing Monday,
were to go under, it would hinder Lucent Technologies (LU), which has a vendor
financing pact with the company. Other telecom companies could then lose an
important source of financing in Lucent. (CBN)
11:17 (Dow Jones) Look for more curbs for the DJIA. Collars on trading now
kick in when the index is up or down 200 points during the day. That's a switch
from 210 points during the 1Q. The change to 200 during the 2Q was made based
on 2% of the DJIA's closing price on Friday, the end of the first quarter. By
the way, the curbs are in for the first time this quarter, with the DJIA off
200 earlier. (KJT)
11:12 (Dow Jones) Nasdaq Composite falls below 1700 on intraday basis for
first time since Oct. 28, 1998. Down 85 at 1698. (TG)
11:07 (Dow Jones) Stocks getting hammered. DJIA down 205 at 9573, Nasdaq Comp
off 78 at 1704, and S&P 50 falls 24 to 1121. JP Morgan, H-P, Philip Morris, and
AT&T lead DJIA lower. Nasdaq 100 off 5%. (TG)
11:03 (Dow Jones) Global high-yield issuance, according to figures released
by Capital Data, was $30B in 1Q, a 35% increase over same period last year.
Salomon ranks number one as top high-yield underwriter, followed by CSFB, MSDW,
Deutsche Bank, and Lehman. (CBS)
10:53 (Dow Jones) Economists at The Levy Institute of Bard College, who were
early in predicting the extent of the current economic downturn, contend that
many still underestimate how bad it could get. David and Jay Levy contend the
economy is now in what they call "contained depression," partly brought on by
market excess in the mid- to late-90s and global overcapacity. The economists
say many people still fail to see that four current phenomena - declining
economic activity, the negative wealth effect of slumping equity markets,
deteriorating debt and credit conditions, and crumbling international financial
stability - are mutually reinforcing. "A setback on one front leads to new
troubles on the others," they say. (RS)
10:42 (Dow Jones) CBOT records show full seat sold for $320,000 on Thursday,
up from previous sale of $305,000 on March 23. (SPC)
10:35 (Dow Jones) As if things aren't bad enough at Xerox (XRX), news that
the company is delaying its 2000 10-K filing sent the stock on a harsh descent.
The stock was recently trading down 16%, or 98 cents, at $5.02, and one
analyst, at Credit Suisse First Boston, said shares of Xerox could fall to the
$3 to $4 range. (DLF)
10:30 (Dow Jones) For the first time since the stock market crash in October
1987, U.S. private equity investment has fallen for the third consecutive
quarter, according to VentureWire. A total of 1,051 private companies raised
$14.5 billion in venture capital in the 1Q, a steep decline from the year-ago
quarter's 1,855 companies that raised $27.7 billion. Early stage deals were
hardest hit, dropping to 327 from 656. The figures suggest venture capitalists
will invest $47 billion this year, down from 2000's $108 billion, but up 15%
from 1999. (JAW)
10:20 (Dow Jones) Whither entertainment stocks? Salomon Smith Barney analyst
Jill Krutick notes that while stocks including AOL Time Warner (AOL) and Viacom
(VIA) have been caught in the general market weakness, she expects the sector
to be one of the first to rebound. Potential strikes by the Screen Actors Guild
or Writers Guild clouds the near-term outlook, she says, but entertainment and
ad spending should continue to grow faster than the economy. The sector could
outperform the market in late 2001 and into 2002. (BS)
10:10 (Dow Jones) Factory inventories declined by 0.1% in February after a
0.5% increase in January. The factory inventory decline was less than the 0.5%
decline in shipments, so, it still looks like inventories have to be trimmed
further. (JM)
10:07 (Dow Jones) B2B stocks are seeing steep losses after leading outfit
Ariba (ARBA) gave new meaning to the term "pre-announcement," and triggered an
avalanche of analyst downgrades. The company expects a 2Q operating loss of 20c
a share, excluding charges on revenue of $90M and said it was laying off
one-third of its workers. Back in January, Ariba said it expected 2Q earnings
of 6c a share on revenue of $180M to $185M. The news has implications for other
B2B and software vendors. Ariba said IT spending is slowing dramatically,
especially among companies operating Internet marketplaces, and doesn't expect
it to pick up again. (RS)
10:00 (Dow Jones) The Chicago Fed's Feb. National Activity Index is -0.89 vs.
-0.87 in Jan. The bank sees odds of a recession still rising, but adds that
there are signs economic weakness is stabilizing. (FL)
9:57 (Dow Jones) Quantech Research's Mark Minervini says that while sharp
rallies off the lows fuel speculation, bottoms do not happen overnight, It is
the proliferation of quality stocks setting up and emerging that confirms the
arrival of a sustainable advance. He does see a few decent charts right now:
ESC Medical (ESCM), Genesco (GCO), Henry Schein (HSIC), John Hancock Financial
(JHF), Hot Topic (HOTT), Charlotte Russe (CHIC), Monsanto (MON), Fleming (FLM),
and Respironics (RESP). (TG)
9:42 (Dow Jones) Stocks get out to weak start. Home Depot, SBC, Merck,
Wal-Mart and Boeing only DJIA gainers. Citi, Intel lead on downside. Nasdaq 100
off another 2%, Internets hit hard. DJIA off 76 at 9701, Nasdaq falls 33 to
1749, and S&P 500 loses 9 to 1136. (TG)
9:39 (Dow Jones) Media investors alert: Salomon Smith Barney hosts a
conference called "The Big Picture," featuring executives from the world of
television and cable hobnobbing about the changing entertainment landscape.
With technology rapidly shifting the way TV programs and movies are
distributed, a few new ideas might get kicked around. (BS)
9:35 (Dow Jones) Stocks and bonds will move into a vacuum until payroll data
on Friday, says Bear Stearns. It suggests that as NAPM reduced chances of Fed
inter-meeting cut, markets now waiting for new clues on U.S. slowdown. (NEH)
9:23 (Dow Jones) Nymex crude futures seen opening 10-15 cents a barrel higher
in snapback from Monday's sharp selloff. Bias seen to downside, with prices
likely to extend recent losses if upside progress stalls. Choppy session seen
ahead of API inventory data, which is mostly seen showing a build in stocks.
May crude, up 12c at $25.71 in overnight ACCESS trade, faces resistance at
$26.60 and $26.80; support is seen at $25.50 and $24.90. (MXF)
9:16 (Dow Jones) Already one of the lowest projections on the Street, Salomon
Smith Barney cuts its year-end price target for the S&P 500 to 1400, from 1450.
(S&P closed Monday at 1146). At the same time, the investment firm ups its
stock allocation to 70% from 65%. "We would warn investors that we do not
anticipate a major recovery in the technology sector," says Salomon market
strategist Tobias Levkovich. "But trading rallies could ensue given the tech
sectors more reasonable valuation levels and the Nasdaq's oversold conditions."
(KJT)
(END) DOW JONES NEWS 04-03-01
11:24 AM |
