09:55 ET Michigan Consumer Confidence : Michigan Consumer Confidence numbers released a few minutes early; April sentiment falls to 88.4, slightly below the 89.0 consensus.
09:52 ET Market Action : Very fast trade off the open. The gap-up advance is now being inundated with selling, sending several early winners spilling into the red... Biotechs and chip equipment makers holding up best against the early profit-taking
09:50 ET Sector Watch: Semiconductor : -- Technical -- Index still holding strong gains but would watch support near 51 for NVLS, AMAT and KLAC as an indication of the health of today's advance.
09:37 ET Sector Watch : Broad based gains with the early leadership coming from the semiconductor (+3.4%), software (+2.9%) and biotech (+3.4%). Networking is also performing well (+3%) despite downgrades (CIEN, GLW). Some profit taking seen in drug and oil services.
09:31 ET Southwestern Life Holding (SWLH) 12 halted: Life insurance provider agrees to be acquired by Swiss Re Life & Health America Holding for $18.50 per share in cash.
09:25 ET Celera Genomics (CRA) 35.40: Genomics research company completes the assembly of the mouse genome. Reports that the mouse genome contains about 2.6 billion base pairs compared to 2.9 billion base pairs in the human genome.
09:25 ET Intel (INTC) 28.64: Morgan Stanley Dean Witter Analyst, Mark Edelstone cautious on NEUTRAL rated Intel; says aggressive Pentium 4 pricing strategy, prospect of lackluster PC demand in 2001, and poor visibility in the communications market suggest that there is considerable downside risk to INTC's revenue and earnings results this year.
09:22 ET VeriSign (VRSN) 46.22: -- Update -- Thomas Weisel Partners upgrades to STRONG BUY from Buy after exceptionally high quality quarterly results. Raises CY01 revenue estimate to $1.0 bln from $997 mln to reflect upside in Mar Q; CY01 EPS goes to $0.61 from $0.60. Believe the shares could easily reach near-term target of $55. Raising LT target to $80-100 based on DCF.
09:14 ET Exodus Comms (EXDS) 9.03: -- Update -- SG Cowen downgrades to BUY from Strong Buy on view that the next several quarters will continue to be difficult; while feels stock may rally today (as some were expecting even worse results), hard to identify any short term triggers that would keep the stock moving; sees issue trading sidewise for a while... EXDS trading at $9.5 in pre-market.
09:13 ET Opening Indications : S&P futures +13, or 14 pts above fair value; Nasdaq 100 pre-market indicator +40. Momentum from surprisingly strong GDP report continues; with futures now pointing to solid gains at the open.
09:08 ET Clear Channel (CCU) 58.74: -- Update -- Merrill Lynch downgrades to NT NEUTRAL from Buy; stock is trading at 18x new 2001 EBITDA estimate of $2.4 bln and 15x 2002 estimate of $2.7 bln and 20x ATCF per share estimate for 2001 of $2.90 and 18x 2002e of $3.35. Believe the stock could potentially trade down to 12-13x EBITDA estimates and 15-17x ATCF/share estimates.
09:05 ET Gapping Up : ARTG +19% (predicts a return to profitability in Q4; exceeds estimate when tax benefit included)... VRSN +15% (blowout quarterly results; buying back stock)... HOTJ +14% (positive write-up in Business Week)... MANH +12% (exceeds estimates; maintains Q2 guidance)... Also moving in pre-market are: SCMR +8%, JDSU +5%, JNPR +4.5%, CSCO +4.5%, EXDS +4.5%.
09:02 ET Kellogg (K) 25.48: Banc of America Sec upgrades to MKT PERFORM from Underperform. Q1 saw continued lackluster results with operating EPS coming in at $0.30 versus $0.40 last year, a 25% decline; Q2 EPS are also expected to decline about 30%. Keebler acquisition should modestly enhance longer-term growth prospects. Upgrade based on valuation.
08:56 ET Kenneth Cole (KCP) 26.24: Robertson Stephens upgrades to BUY from LT Attractive with a $37 price target. KCP's disciplined inventory management allows for quick re-positioning of merchandise to maximize full-price selling. Valuation attractive.
08:50 ET Goldman Sachs Cuts Autos : Firm reduces ratings on Ford (F) and General Motors (GM) to MKT PERFORM from Mkt Outperform as auto sales are deteriorating. Light truck inventory is ballooning, creating sizable risk to light truck production schedules at GM and Ford. Auto industry is not yet in a 'trough,' so there's no recovery to anticipate.
08:45 ET Adolph Coors (RKY) 54.15: JP Morgan downgrades to MKT PERFORM from Buy after disappointing Q1. While company volume trends were expected to be soft in Q1, shipments were more than 700 basis points ahead of sales to retailers, creating significant earnings pressure. 2001 EPS cut to $3.28 from $3.42, 2002 to $3.68 from $3.85.
08:45 ET Art Tech Grp (ARTG) 7.89: -- Update -- Banc of America Sec. says loss for the qtr would have been $0.31 were it not for a tax benefit; firm lowering its FY01 est. to ($0.44) from ($0.13) and FY02 to $0.08 from $0.40... ARTG shares trading at $9.10 in pre-market.
08:41 ET Opening Indications : S&P futures +12, or 13 pts above fair value; Nasdaq 100 pre-market indicator +26. Stronger than expected GDP report has moved the futures sharply higher as market hopes that this is a harbinger of stronger growth (and profits) ahead. Unclear whether this will positive sentiment will endure, as Q1 is long over and this GDP report says little about future growth.
08:40 ET Therma-Wave (TWAV) 17.32: Banc of America Sec. downgrades to BUY from Strong Buy; firm slashes FY02 est. to $0.47 from $1.03.
08:39 ET Columbia Sportswr (COLM) 54.36: JP Morgan upgrades to BUY from LT Buy after the company posted blowout Q1 results and backlog growth of 32.3%, signaling stronger than anticipated sales growth for the remainder of the year.
08:39 ET Economic Report : Note that preliminary GDP figures are based partly on estimates and subject to revision. The fact that business investment was reported +1.1% certainly makes us very skeptical about this number. The tendency in past downturns is for the economic readings early in the process to overstate growth as they incorporate past (more optimistic) assumptions; wouldn't be surprised to see the same again here.
08:36 ET Johnson Controls (JCI) 74.60: Merrill Lynch downgrades to NEUTRAL from Accumulate. Preliminary April auto sales forecast suggests that the slowdown in U.S. auto sales is accelerating; expect April U.S. auto sales to decline by 11%. Sales weakness through the spring selling season will likely result in modest production cuts in 2Q, but bigger OEM production cuts in 3Q will put pressure on JCI's earnings and push the outlook for a sector rebound into next year.
08:32 ET Economic Report : Q1 GDP rose 2.0%, much stronger than expectations. Could reduce the odds of another Fed easing, but would note that the market might also be skeptical of this number, as preliminary GDP reports are subject to substantial revision. Seeing initial positive reaction to the report, though the market has trouble deciding whether stronger growth is good (higher profits) or bad (lower chance of Fed easing).
08:29 ET Penton Media (PME) 18.50: Bear Stearns downgrades to NEUTRAL from Attractive based on company's dependence on the Internet/broadband sector, 35% of revenues. Earnings and cash flow visibility is poor also. Now appears that Q2 revenue will come in below the low end of last month's guidance.
08:25 ET Taiwan Semi (TSM) 20.44: World's largest semiconductor foundry company reports Q1 results and announces a 19% reduction in planned 2001 capital expenditures from previous estimate of $2.7 bln... Announcement could potentially weigh on the semiconductor equipment group.
08:22 ET barnesandnoble.com (BNBN) 2.06: Prudential upgrades to HOLD from Sell and raises price target from $1 to $3. Firm says despite tough Q1 environment, BNBN was able to grow faster than archrival Amazon.com (AMZN), thus gaining market share in US books, music, video category. Fulfillment cost improvement was significant and impressive. Higher contribution margin makes it far more likely that company will be able to achieve profitability, perhaps as early as 4Q02.
08:18 ET InterTrust (ITRU) 3.11: Files patent infringement complaint against Microsoft (MSFT); alleges that Microsoft's distribution and sale of Windows Media Player and other products implementing a host of rights management functions infringe on an ITRU patent.
08:14 ET PurchasePro.com (PPRO) 3: Prudential downgrades to SELL from Hold based on lack of revenue visibility, further loss of management credibility, substantial dependence on AOL for the viability of the company, dwindling cash reserves with substantial marketing and development commitments to AOL, DSOs up significantly from 62 to 134 days and slowing marketplace sales combined with flat network access fees. Price target cut to $2 from $5.
08:10 ET Corning Inc (GLW) 21.00: -- Update -- UBS Warburg downgrades to HOLD from Buy. Firm cuts estimates to $7.6 bln in revenues and $0.88 EPS for 2001, down from $8.0 bln and $1.20; and 2002 goes to $8.2 bln and $0.95, down from $9.4 bln and $1.45. Price target cut to $16 from $36. Downgrade based on concern that even if the sector begins to rebound later in the year, Corning`s value proposition of fiber and photonics is not properly calibrated at this time to participate as rapidly as some of its peers.
08:07 ET Corning Inc (GLW) 21: -- Update -- Merrill Lynch feels that latest reduction in estimates by management is a major step toward clearing the decks; thinks that risk is limited for investors that accumulate the stock under $20.
08:01 ET Corvis (CORV) 7.89: Salomon Smith Barney downgrades to OUTPERFORM from Buy; says the long haul market build out is slowing sharply and becoming more competitive; pricing pressure in the space is building due to aggressive tactics by Nortel and Lucent; CORV also failed to announced any new contracts and doesn't see any before the 2nd-half of 2001. Reduces full yr revenue forecast to $294 mln from $315 mln and FY02 to $411 mln from $678 mln.
08:00 ET CIENA Corp (CIEN) 52.15: Salomon Smith Barney downgrades to OUTPERFORM from Buy based on evidence of sharply intensifying competition, particularly from pricing; while current qtr looks solid, feels that building pressures are too intense to ignore; thinks that margins are at risk and momentum must eventually trend back toward industry averages.
07:58 ET Opening Indications : S&P futures +1, or 2 pts above fair value; Nasdaq 100 futures +10, or 10 pts above fair value. Still a quiet morning with a slight positive bias; market waiting for GDP at 8:30 ET, negative number unlikely but could change the psychology regarding the economy.
07:42 ET Level 3 Comms (LVLT) 13.04: Lehman Brothers downgrades to BUY from Mkt Perform on view that renegotiation of the XO deal highlights the risks inherent in LVLT's dependance on dark fiber sales, and high risk customers.
07:39 ET Vans, Inc (VANS) 20.25: Files to sell 2.5 mln shares in a public offering.
07:33 ET QUALCOMM (QCOM) 58.05: Grants Mitsubishi Electric a license to develop, manufacture and sell infrastructure equipment for 3G CDMA applications in Japan, China and Taiwan. Mitsubishi will pay ongoing royalty rates irrespective of the licensed CDMA standard implemented.
07:31 ET K-Swiss (KSWS) 28.98: Athletic apparel maker posts Q1 net of $0.63 a share, 3 cents shy of consensus, vs yr-ago EPS of $0.67. Projects Q2 EPS of $0.27-$0.34 (mean $0.35) and full yr earnings of $1.90-$2.00 (mean $2.07).
07:26 ET Waters Corp (WAT) 45.70: Analytical instruments manufacturer posts Q1 net of $0.28 a share, 2 cents above consensus, vs yr-ago EPS of $0.22; sales rose to $201 mln, an increase of 17% before currency effects.
07:22 ET Business Week Stocks : Online job site, Hotjobs.com (HOTJ), may surprise to the upside when Q1 results are reported; Business Week source thinks profitability could come a qtr early... Some Viacom (VIA) bulls think that concerns over TV ad market are overblown; Mario Gabelli, who owns 7%, expects issue to recover once the economy improves... Pennzoil-Quaker State (PZL) may be preparing to break out to a new high; one technician notes that stock has formed a base at $10 and could hit $18 by yr-end.
07:22 ET Opening Indications : This morning's fair value figures -- S&P 500 fair value: 1240; closed 1 pt above fair value on Thursday. Nasdaq 100 fair value: 1774; closed at fair value on Thursday. Current indications: S&P 500 futures are +1, or 2 pts above fair value. Nasdaq 100 is +5, or 5 pts above fair value. Saw a generally positive tone following yesterday afternoon's earnings reports, but no clear direction and the major after hours movers were breaking both ways: positive - VRSN, ARTG, IRF; negative - SBUX, AMGN.
07:12 ET Top Equity News: Winners : VeriSign (VRSN) and Corning (GLW) topped the after-hours volume list. VRSN rose 12% on report of better-than-expected earnings and plan to repurchase shares. GLW lifted about 2% after beating estimates by a penny. However, the company also slashed Q2 and lowered full yr guidance... Art Tech Group (ARTG) posted a 10% extended-hours gain after exceeding loss estimate by 2 cents and predicting a return to profitability by yr-end.
07:02 ET Human Genome (HGSI) 55.85: Posts a Q1 loss of $0.10 a share, a penny narrower than consensus, vs a yr-ago loss of $0.21; revenue was flat at $5.27 mln; company ended the qtr with $1.76 bln in cash. Projects 2001 loss of $0.56-$0.72 (consensus -$0.64).
06:59 ET Top Equity News: Losers : Several stocks plunged in extended-hours trading after lowering growth forecasts for the yr. Starbucks (SBUX) slumped 10% in response to reduction of full yr revenue growth target to 23%-25% from 25%... Amgen (AMGN) slid 6% after trimming growth rate guidance to the low-teens from the mid-teens due to delayed launch of a new drug... Clear Channel (CCU) fell 7% after radio station operator reported a wider-than-expected Q1 loss and warned for Q2.
06:47 ET Sycamore Ntwks (SCMR) 7.90: After the close, optical site Light Reading reported a rumor that Sycamore is working on a big deal with NTT that could be announced in the next few weeks; cites a "previously reliable source."
06:36 ET United HealthCare (UNH) 64.87: Reports Q1 net of $0.64 a share, 4 cents above consensus, vs yr-ago EPS of $0.48; revenues increased 11% to $581 mln. Company projects full yr earnings of $2.66-$2.68 (consensus $2.52).
06:07 ET U.S. Markets : S&P futures trading at 1241.20, 1.2 points over fair value, Nasdaq 100 futures trading at 1782.50, 8.5 points over fair value. The 30-year bond is up 2 ticks at 5.704%. The dollar is outperforming both the yen and the euro.
06:06 ET European Markets : FTSE -0.26%, DAX -0.41% -- European stocks also mixed in uneventful trading. Earnings still the main driver. Vodafone hit by Goldman Sachs' cut of earnings forecasts for the mobile phone company. Chemical company Bayer lower on disappointing earnings as higher input costs weigh on profit margins. However, Unliever has pushed higher with first quarter profits falling 4.2% versus analysts' expectations of a 16% decline. US contagion still a major concern with German government lowering forecast for 2001 GDP growth to 2.0% from 2.75%.
06:06 ET Asian Markets : Nikkei -0.28%, Hang Seng +0.70% -- Asian stocks mixed with heavyweights Japan and Korea both closing lower on the session. However, Hong Kong and Singapore managed to post decent gains. Energy stocks lifted Hong Kong higher, with help from second-tier banks. Korea hit by surging bond yields on the back of another round of weakness in the won. Singapore boosted by gains in blue-chip Singapore Press Holdings stemming from the procurement of a TV broadcast license. Japan modestly lower with profit-taking in tech ahead of next week's Golden Week holidays.
03:38 ET Lucent Tech (LU) 10.68: Company and Alcatel (ALA 29.85) have been holding talks regarding a full-blown merger, reports Wall Street Journal... Chances of a deal actually being put to bed are reportedly slim... It was learned the other day that Alcatel was one of the companies that bid on Lucent's fiber optic division.
03:31 ET Unilever PLC (UL) 29.66: Anglo-Dutch household products company posted better than expected Q1 results... UL posted a net profit, before exceptional items, of $633 mln... Expectations ranged from $532 mln to $550 mln... Bolstered by last year's acquisition of Bestfoods, sales rose 20% to $11.5 bln.
03:16 ET Star Scientific, Inc. (STSI) 1.38: Cigarette maker plans to sell powdered-tobacco lozenges for use by smokers when they can't light up, such as at work, on airplanes, in restaurants, etc, reports the Wall Street Journal... Company to test-market its new product, named Ariva, in Dallas, TX and Richmond, VA in late August or early September... Plans to sell a box of Ariva for about $3, or the same as pack of cigarettes... Each box would contain 20 "cigaletts," or Tic-Tac size lozenges... Brown & Williamson Tobacco, a unit of British American Tobacco, PLC, has signed an agreement that gives it the right to sell Star's hard-tobacco products under its own brand name in the U.S... B&W will pay royalties to Star... Company notes that Ariva will have wider profit margins than cigarettes, and be taxed at a much lower rate... Traders should note that if FDA considers the product a food, it will try to assert its regulatory authority... However, STSI argues that product should be free of agency's jurisdiction under current law because it is a tobacco product and not a food or drug. |
