MARKET TALK: Is Another Late Selloff In The Cards?
07 Feb 14:44
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:44 (Dow Jones) It seems the late-day selling may want to get underway.
Perhaps stocks can hold on? Major averages are well off their highs, and the
mild weakness in techs continues. That said, wireless is on top, followed by
broadcasting, entertainment and diversified industrial names. Disney,
Honeywell, SBC, and JP Morgan on top of DJIA, which is up 31 at 9684. Nasdaq
off 7 to 1805, and S&P 500 adds 3 to 1086. (TG)
2:33 (Dow Jones) It's not too often that the head of a company's IR
department is the focus of Wall Street research. But ABN-Amro, in brief note,
says AOL's appointment of John Martin as VP of investor relations is a positive
for company, given his strong industry background and extensive relationships
at the company, where he previously spent 7 years. ABN-Amro sees Martin as a
highly capable exec who will "be a key ingredient in restoring investor
confidence." AOL up 6% at $25.70. (TG)
2:14 (Dow Jones) Reverse mergers - where a private company is acquired by a
public company in a move to get a stock listing - has nearly doubled over the
past three years, says Makeez Malikzay of Thomson Financial. Such takeover
activity between 1999 and 2001 increased to 541 deals worth a total value of
$95 billion, up from 287 deals worth a total of $52 billion between 1996 and
1998. And, although overall merger volume fell by half in 2001, reverse mergers
posted volume of $77 billion, seven times that of 2000. Most of that volume,
however, is due to Comcast's (CMSCK) $72 billion reverse takeover of AT&T's (T)
cable business. But even the $5 billion remaining still outpaces the past six
years. (JAW)
2:02 (Dow Jones) Amid all of the January same-store sales numbers reported by
retailers Thursday, one was conspicuously absent: Kmart's (KM). Having filed
for bankruptcy last month, the beleaguered retailer will start filing monthly
operating statements to the court "around the end of March," spokesman Jack
Ferry says. The company is scheduled to file its 10-K within 90 days of the end
of its fiscal year, which was Jan. 30, "unless there is a delay caused by
bankruptcy proceedings," Ferry says. Shares up 4.3% at 98c. (JMC)
1:47 (Dow Jones) One of Louise Yamada's biggest technical concerns at the
moment is the 'AAA' corporate/Treasury yield spread (the widening gap shows a
belief on the part of investors that debt risk is growing, hence a flight to
the safety of U.S. Treasurys.) Salomon research shows an uptrend in the yield
spread has only taken place during structural bear market environments:
1966-76, 1927-32, and 1938-41. In other words, the uptrending spread is not a
characteristic of a structural bull market. And for those who point to the
shrinking supply of the long bond, she notes the trend has not remained static
since the government took that action but has extended in time and degree. (TG)
1:28 (Dow Jones) The dollar's average monthly trade weighted value rose 1.2%
in January from December, the Atlanta Fed said Thursday. Analysts say it
probably won't be any lower in Feb. (JRH)
1:14 (Dow Jones) Lehman says wholesale inventories probably fell 0.7% in
December, their seventh consecutive monthly retrenchment. Lehman expects the
depletion to set up the need for companies to rebuild their inventories in
2002, adding 3.0 percentage points of GDP growth in 1Q. Numbers due out Friday.
(MCG)
12:59 (Dow Jones) Following Household's (HI) investor call earlier,
independent research firm CreditSights.com says both the stock and bonds are a
buy. It's been beaten down by short-sellers in the wake of Tyco (TYC) woes but
doesn't merit the recent liquidity scare. HI up 7.5% at $48.04. (CSE)
12:51 (Dow Jones) Allied Irish Banks (AIB) will continue to pay a penalty in
the markets until management exactly quantifies its losses, says Steve Hussey,
vice president, fixed income, Allied Capital, London. The bank will also have
to "assuage investor concerns about its risk management and internal controls,"
he added. Investors will be looking to the company's earnings reports and the
outcome of an S&P review of the bank, which is expected to take about a month.
S&P has placed the bank's single-A-plus rating on CreditWatch Negative, while
Moody's Investors Service and Fitch Ratings have affirmed the bank's ratings of
Aa3 and double-A-minus, respectively. AIB shares up 4% to $20.58 after steep
selloff Wednesday. (MCG)
12:40 (Dow Jones) Aflac (AFL) decided not to make a splash at the Super Bowl
with its latest commercial featuring the infamous Aflac duck, instead opting
for a more diverse audience Friday at the opening ceremony of the Winter
Olympics. Dan Amos, chairman and chief executive, said the insurer hasn't
advertised on professional football telecasts for several years after a change
in broadcast contracts eliminated in-game trivia questions - a feature Aflac
sponsors on college football and baseball telecasts. Amos expects the latest
commercial to be a hit - it posted the highest score of any of the commercials,
so far, in consumer testing. The concept: the Aflac duck and a group of school
children visit the museum. (CUB)
12:28 (Dow Jones) Even if Thursday's rally in stocks holds up for the entire
session, "yesterday's poor market performance betrays an underlying weakness
which is likely to severely limit the potential of any near-term rally
attempts," says Halliard Lyons technician Dick Dickson. Meanwhile, gold stocks
sold off on heavy volume Wednesday, calling into question their recent
breakout. None has yet violated key support levels, so if volume dries up on a
further test, the breakouts may still be validated. (TG)
12:16 (Dow Jones) Mexican stocks are soaring after S&P raised the country's
foreign credit rating to investment grade. Investors have been waiting two
years for S&P to join competitor Moody's in its assessment. Mexico's key IPC
index is up 1.9%. (ADG)
12:07 (Dow Jones) ManTech International (MANT) is up after its IPO, a jump
analysts say should be expected for a defense contractor in a time of war.
"Defense companies fare better in a climate such as this as opposed to when
people are singing 'Where Have All The Flowers Gone,"' says John Fitzgibbon
Jr., an analyst with IPODesktop. (RJH)
(END) DOW JONES NEWS 02-07-02
02:44 PM |
