09:24 ET Opening Indications : S&P futures close down 1.7 or 0.3 pts above fair value; Nasdaq futures trading off -0.5, or 4.5 pts below fair value... IBM downgrade and surprisingly strong retail sales results weighing on the market going into the open.
09:21 ET Gapping Up : Merck acquisition bid lifts Rosetta Inpharmatics (RSTA) 72% in pre-market... Ameritrade (AMTD +11.5%) also running on M&A news, in this case a report by USA Today that CIBC prepared to offer $9-$10 per share for the online broker... Palm Inc (PALM) advances 4.5% after being started with LT Buy rating and $10 target.
09:19 ET Schering-Plough (SGP) 37.10: -- Update -- Sanford Bernstein on the SGP rumors of a MRK bid; continues to believe that MRK will ultimately buy SGP but questions the current rumors since: (1) Need more data on ezetimibe (MRK-SGP combo for cholesterol) (2) Price seems too high (expects $0.55-$0.69/MRK share). (3) Not consistent with recent mgt comments at MRK. Seperately Bernstein talks about the FDA advisory committtee meeting today to discuss whether anti-histimanes can be sold OTC; does not expect unananimous ruling - should be delayed until '04-'05 which would be positive for SGP, giving them time to get new products out.
09:19 ET Human Genome (HGSI) 58.42: UBS Warburg initiates coverage with a BUY rating and $83 price target. Analyst cites pipeline, faster time to market advantage, strong balance sheet and attractive valuation.
09:13 ET Rational Sftwr (RATL) 20.52: UBS Warburg initiates coverage with a BUY rating and $26 price target. Analyst estimates that RATL's CAGR in core market will be approximately 30% over the next three years to $5 bln; company's recent move into content management would represent an incremental market opportunity.
09:10 ET Mercury Interactive (MERQ) 62.93: UBS Warburg initiates coverage with a BUY rating and $80 price target. Mercury dominates its market for testing the functionality and performance of Internet and client/server applications with an estimated 45% - 50% share, but the market opportunity still remains largely untapped. Mercury has one of the most linear patterns of quarterly revenue among enterprise software companies.
09:10 ET Ameritrade (AMTD) 7.96: USA Today reports that CIBC is in talks to acquire the online broker. CIBC is negotiating to pay between $9 and $10 a share for the company, according to sources.
09:06 ET Pixar Animation (PIXR) 34.09: Prudential upgrades to STRONG BUY from Accumulate following report of stronger-than-expected Q4 earnings (beat by 33%) and upbeat conference call; company also raised guidance... Thinks marketing for next film, Monsters Inc, will serve as a powerful catalyst for the stock; price target remains $50.
09:04 ET Microsemi (MSCC) 44.45: Semiconductor maker declares a 2-for-1 stock split.
09:03 ET Level 3 Comms (LVLT) 15.96: JP Morgan downgrades to LT BUY from Buy; expected strategic repositioning to address the telecom industry is enterprise-centric vs web-centric; this will take a minimum of 9 mos and cause continued share price underperformance. Lowering LT growth rates from 41% to 39%, and PT to $33.
09:01 ET Brocade Comms (BRCD) 40.85: CSFB initiates coverage with a BUY rating and a 12-month price target of $52; says Brocade has carved out a commanding share of the budding fibre channel switch market; company is laying the groundwork for the build-out of more scalable and distributed storage fabrics.
08:59 ET Proxicom (PXCM) 7.64: Compaq Computer (CPQ) declines to raise the value of its offer to acquire Proxicom; does not feel current economics warrant increasing the bid.
08:56 ET Rambus (RMBS) 11.76: Appoints Bob Eulau to the CFO position. He replaces Gary Harmon, who plans to retire at the close of the current quarter.
08:55 ET IDEC Pharm (IDPH) 52.81 : Morgan Stanley upgrades to STRONG BUY from Outperform; anticipates additional appreciation potential for IDPH now that Zevalin concerns with the FDA have been addressed and focus returns to strong Rituxan growth.
08:54 ET L-3 Comms (LLL) 82.05: First Union Sec. downgrading to MKT PERFORM from Buy; feels that current multiple discounts many positives and provides a less-attractive risk/reward ratio.
08:50 ET Pegasus Comms (PGTV) 26.08: Bear Stearns downgrades to ATTRACTIVE from Buy after company lowered 2001 guidance on conference call; firm lowers net adds from 233,000 to 140,000; price target cut to $29 from $39... Morgan Stanley downgrades stock to OUTPERFORM from Strong Buy.
08:46 ET Rosetta Inpharmatics (RSTA) 9.91: Enters definitive agreement to be acquired by Merck & Co (MRK 76.52) in a stock transaction valued at $620 mln or approx. $18 per share. RSTA shares will be converted into 0.2352 shares of Merck stock.
08:41 ET Knight Trading (NITE) 18.94: Salomon Smith Barney downgrades to OUTPERFORM from Buy; expects decimalization to be a net near-term negative for principal traders like NITE, putting pressure on profitability; Nasdaq study on prelim. findings shows that avg. effective spread reduced by 46%.
08:37 ET BE Aerospace (BEAV) 20.15: Announces the public offering of 5 mln shares of common stock at $19.50 per share. Approx. 2.9 mln of the total being sold by shareholders.
08:32 ET Economic Data : April PPI rises 0.3%, in-line with consensus; core PPI up 0.2%, above the 0.1% expectation... April retail sales surge 0.8%, well above the 0.2% expected by economists... Initial reaction to strong retail sales number was a sell off in the futures on fear that number will take pressure off Fed to lower rates 50 bp next week. However, have snapped back into positive territory.
08:26 ET Siebel Systems (SEBL) 42.03: Robertson Stephens comments on stock following analyst day; believes that SEBL will continue to be the dominant franchise in the space longer term, making issue a name to own for investors with a 12-14 month horizon; however, would not be aggressive buyers of SEBL at this time based on current valuation levels (73 p/e, based on CY01 est.), which are not compelling, and additional downside risk to the numbers.
08:19 ET KPMG Consulting (KCIN) 16.42: Thomas Weisel starts coverage with a BUY rating and price target range of $23-$25; thinks KPMG offers a compelling risk/reward opportunity for investors looking for big company/highly liquid exposure to professional services group in front of an economic recovery.
08:13 ET Centillium Comms (CTLM) 23.59: CSFB reducing estimates to reflect Nortel decision to exit the DSLAM business; while Nortel was not included in Q2 and Q3 guidance, believes that company was expecting NT to ramp its full-rate DSL chips into production in Q4; firm reduces full yr EPS est. to $0.20 from $0.23 and rev. to $163 mln from $167 mln... Maintains Buy rating and believes that stock's 25% decline in reaction to Nortel exceeds the 10-20% anticipated contribution expected in late 2001.
08:07 ET Chubb (CB) 68.73: Dresdner Kleinwort upgrades to BUY from Hold after attending analyst meeting yesterday; views Chubb as an emerging growth story; price target lifted to $85 from $80.
08:03 ET Nortel Networks (NT) 15.22: -- Update -- Announces the resignation of COO Clarence J. Chandran in order to take additional time for the successful completion of his medical leave announced March 13.
08:00 ET Electronic Arts (ERTS) 54.52: -- Update -- CSFB adjusting estimates in response to management guidance on the conference call last night; raises 2002 revenue projection to $1.6 bln from $1.5 bln, but lowers EPS estimate to $0.68 from $0.75 to reflect forecast of increased costs in the dot-com business.
07:50 ET Digital Lightwave (DIGL) 41.96: After the close, CSFB initiated coverage with a BUY rating; believes that telecom test equipment company is in the right place with the right product at the right time
07:43 ET Pepsi Bottling (PBG) 43.93: Previously announced addition of stock to the S&P 500 will occur after the close of trading today.
07:38 ET Opening Indications : This morning's fair value figures -- S&P 500 fair value: 1259; closed 2 pts above fair value. Nasdaq 100 fair value: 1846; closed 4 pts below fair value. Current indications: S&P 500 futures are +0.20, or 2.2 pts above fair value. Nasdaq 100 is +1, or 3 pts below fair value... Positive tone in the futures has eroded since Bear Stearns issued its downgrade of IBM.
07:25 ET American Intl (AIG) 83: Reaches definitive agreement to acquire American General (AGC) for $46 per share in stock. The deal is subject to a collar mechanism. American General to pay a $600 mln termination to Prudential plc for backing out of its March 12 agreement to be acquired by the UK insurer.
07:18 ET IBM (IBM) 115.20: Bear Stearns analyst Andy Neff downgrading Dow component stock to ATTRACTIVE from Buy, citing valuation and impact of tougher 2nd-half comparisons; despite confident and upbeat tone at its analyst meeting yesterday, cutting rating to reflect firm's concern about the narrowing of potential upside; Big Blue currently trading at a 10% premium to the market and stock has often stalled in the face of difficult comparisons; notes that company did not give any new financial guidance at the meeting.
07:11 ET Schering-Plough (SGP) 37.10: Business Week reports speculation that Merck (MRK) is eyeing SGP as a takeover target. MRK is said to have talked to Schering about a buyout in mid-1999, and recently approached company again. One banker says MRK has proposed a buyout price in stock of $65 a share, or $91 bln. A Merrill Lynch analyst thinks Schering could be worth $42 to $72 a share, depending on whether the buyer is a financial group or a drugmaker.
07:03 ET Nortel Networks (NT) 15.22: WSJ reporting that Canadian telecom equipment giant plans to exit the digital subscriber line (DSL) business. Nortel instead will focus on core operations such as optical networking. Not clear at this time if the cost of closing its DSL unit has already been reflected in Q1 special charge of $388 mln taken by the company.
06:54 ET World Wrestling (WWF) 13.15: The clock has run out on the XFL. WWF and television network NBC announce that they are shutting down the football league after just one season. WWF anticipates that its share of the after-tax cash losses associated with the league will be approx. $35 mln.
06:48 ET Electronic Arts (ERTS) 54.52: After the close of trading, gaming software developer reported a Q4 loss of of $0.09 a share, 5 cents narrower that consensus, vs a yr-ago profit of $0.08. Revenues rose 4.4% to $307.3 mln.
06:40 ET Imclone Sys (IMCL) 38.55: Reports Q1 loss of $0.02 a share, a penny narrower than consensus, vs a yr-ago loss of $0.26. Total revenues were $24.7 mln, compared to $0.25 mln in the yr-ago (includes $24 mln in milestone payments from Merck).
06:36 ET Knight Transpo (KNGT) 27.30: Company declares 3-for-2 stock split, payable May 18. |
