Here is your morning news -->
09:37 ET Semtech Corp (SMTC) 26.58 +2.24 (+9.2%): Announces that it has signed a contract to supply multiple power management solutions for use in the Xbox video game system from Microsoft.
09:37 ET Sector Watch : Moderately positive start to the session with the Internet, biotech, alternative energy (MKTY +9.2%, HPOW +8.4%, PLUG +11%, MCEL +6.2%), software and retail sectors leading the way. On the downside are oil/oil service, healthcare and utility.
09:30 ET Bank of America (BAC) 58.78: ABN AMRO upgrades to BUY from Add citing improved expense management discipline and potential for improvement in net interest margin; raises FY01 ests to $5.00 EPS from $4.80 EPS and FY02 ests to $5.35 EPS from $5.25 EPS.
09:28 ET Gapping Down : PHSY -15.5% (earnings warning, downgrade)... AUDC -9.5% (Morgan Stanley downgrade)... MCLD -7% (Merrill downgrade)... CTXS -4.4% (UBS downgrade).
09:25 ET Gapping Up : STRM +48% (receives investment from BellSouth)... ALOY +16% (reiterates pro forma profitability forecast for FY01)... TSTN +12% (Alcatel OEM agreement)... HPOW +7.5% (receives orders from European energy company)... Other movers of note: GNSL +11%, GENXY +8.5%, CDTS +8%, BRCD +4.5%.
09:21 ET Check Point Sftwr (CHKP) 54.41: Banc of America initiates coverage with a BUY rating and price target of $75; citing market position as the established leader for network security and firewall solutions; sets FY01 ests at $1.31 EPS on revs of $634 mln and FY02 ests at $1.70 EPS on revs of $837 mln.
09:19 ET STMicroelectronics (STM) 35.54: Semiconductor company says that it cuts 2001 capex plans to $1.5 bln from $1.9 bln, citing continued slowdown in semiconductor market; another negative data-point for semi equipment companies.
09:19 ET PacifiCare Hlth (PHSY) 18.50: -- Update -- Prudential downgrades to SELL from Hold based on lost earnings visibility and the worsening of industry trends; slashing FY01 est. to $1.40 from $2.34 and FY02 to $1.75 from $3.30. Firm's target price goes to $12.
09:12 ET SG Cowen on Big Cap Drugs : Firm sees six reasons to be positive on large-cap drug issues; 1) solid fundamentals and sales, 2) valuations down and in line with 12-yr avg., 3) economy bottoming though likely weak recovery, 4) more bark than bite in political landscape, 5) stocks have underperformed YTD and 6) group seasonally stronger in 2H due to concentration of analyst/scientific meetings; firm likes STRONG BUY rated Pfizer (PFE), Pharmacia (PHA) and Merck (MRK).
09:03 ET Adv. Fibre Comm (AFCI) 18 .26: USB Piper Jaffray downgrades to BUY from Strong Buy due to valuation and sluggish carrier spending outlook.
09:01 ET IDEC Pharm (IDPH) 59.85: Banc of America reiterates STRONG BUY and raises price target to $75; firm cites strong Rituxan sales it believes will surprise to the upside; also expects expanded applications of Rituxan in the future; sees long-term growth rate of 41%.
08:58 ET Viacom (VIA) 55.96: Announces cross-platform marketing partnership wherein Procter & Gamble (PG) will market its brands across 12 Viacom television properties in the US.
08:54 ET Plug Power (PLUG) 28.75: Appoints W. Mark Schmitz to CFO post. Schmitz joins Plug Power from General Motors, where he served as CFO for DirecTV Latin America.
08:51 ET Audiocodes (AUDC) 8.69: Morgan Stanley downgrades to NEUTRAL from Outperform on view that the projected recovery in capex spending in the telecom industry continues to be pushed out. Firm reduces CY01 rev. to $52 mln from $56 mln and CY02 to $56 mln from $70 mln.
08:50 ET Opening Indications : Bullish bias in futures trade is fading as the jump in initial claims and a slew of cautious comments from Wall Street firms regarding earnings prospects for the likes of JDSU, CPQ, ALTR, XLNX and ORCL have weighed on sentiment... Presently, S&P futures, at 1253, are 4 points above fair value while the Nasdaq Pre-Market Indicator is up just 2 points.
08:48 ET Sanmina (SANM) 26.55: Thomas Weisel Partners cuts estimates; believes current quarter is tracking the low end of mgmt's guidance; reduces Q3 estimates to $900 mln and $0.19 EPS from $950 mln and $0.21 EPS.
08:47 ET Alcatel Optronics (ALAO) 18.92: Morgan Stanley downgrades to NEUTRAL from Outperform following firm's profit warning.
08:43 ET Turnstone Sys (TSTN) 6.25: Enters OEM agreement with Alcatel (ALA). Under terms of the agreement, Alcatel has designated Turnstone as its preferred loop management vendor and will market, sell and support Turnstone's products in conjunction with its own suite of broadband access solutions.
08:39 ET Oracle Corp (ORCL) 14.51: USB Piper Jaffray cuts estimates for FY 2001 to $0.42 EPS and FY 2002 $0.45 EPS; the firm maintains its Neutral rating on the shares.
08:34 ET Tellabs (TLAB) 33.93: Expects to record restructuring and other charges in Q2 of $262 mln, compared to previous est. of $150-$225 mln.
08:31 ET Economic Data : US initial jobless claims for the week ended 5/26 rose 8K to 419K, slightly higher than the 408K consensus.
08:26 ET Becton, Dickinson (BDX) 34.25: Bear Stearns says that following Tyco (TYC) acquisition of Bard (BCR) yesterday it might seem that Becton Dickinson could be the next acquisition target for Tyco. Firm does not think this will happen.
08:24 ET Watson Pharm (WPI) 58.86: Morgan Stanley upgrades to STRONG BUY from Outperform and raises price target to $78; cites continued improvement in investor perception, an unappreciated branded product pipeline, and attractive valuation for WPI and the group.
08:22 ET Charles Schwab (SCH) 18.65: Bear Stearns downgrades to ATTRACTIVE to Buy due to 1) risk to key long-term valuation drivers and 2) risk to short-term earnings power. Reduces FY01 est. to $0.45 from $0.47 and FY02 to $0.62 from $0.70.
08:20 ET Opening Indications : Positive bias remains intact as the S&P futures, at 1254, remain 5 points above fair value; meanwhile, the Nasdaq Pre-Market Indicator is up 15 points
08:13 ET Merrill Lowering #s on PLDs : Merrill Lynch trims estimates on Xilinx (XLNX) and Altera (ALTR) after channel checks indicate that push-outs have occurred over the last few weeks for such products as PLDs and SRAMs. Believes these push-outs are coming primarily from N. American comm. OEMs such as Cisco and Lucent... Reduces FY02 and FY03 est. on XLNX to $0.58 from $0.65 and to $0.80 from $0.85. ALTR est. for FY01 lowered to $0.39 from $0.43 and FY02 trimmed to $0.40 from $0.45... Also sees weakness at CY but firm's numbers already low.
08:10 ET Rogers Wireless (RCN) 11.86: Morgan Stanley downgrades to OUTPERFORM from Strong Buy and cuts target to $23 from $40; cites above average churn caused by operational difficulties and customer mix.
08:05 ET CLECs Cut : Merrill Lynch lowers near-term rating on McLeodUSA (MCLD) and XO Communications (XOXO) to NEUTRAL, from Accumulate and Buy, respectively. Following recent meetings with each company's management, believes that there are few near term catalysts and that it will take a few quarters of solid execution on recently reduced business plans before investors will return.
08:04 ET Praxair (PX) 49.41: Merrill Lynch adds stock to Focus One list with a $60 target; looks for Praxair's earnings to outperform other specialty chemical firms this year, with a 6% EPS advance projected compared to an industry average 12% decline.
08:02 ET CIBC on Optical Components : CIBC World Markets analyst Jim Jungjohann downgrades JDS Uniphase (JDSU 16.94) to HOLD from Strong Buy; cites belief that the fundamentals in the WDM sector are deteriorating beyond CIBC's assumptions and believes JDSU could test previous lows. Also cuts New Focus (NUFO 10.22) and Oplink (OPLK 3.15) to HOLD from Buy.
08:00 ET Compaq (CPQ) 15.70: ABN AMRO reducing estimates to reflect protracted weakness in PC demand; FY01 est. reduced to $0.55 from $0.65 and FY02 lowered to $0.87 from $0.97. Maintains positive outlook on the stock based on valuation. Firm's target price is $25.
07:55 ET Opening Indications : S&P futures, at 1254, are 5 points above fair value while the Nasdaq 100 futures, at 1800, are 18 points above fair value... Accordingly, the cash market is expected to start the day on a modestly positive note... Improved tone in U.S. stock futures providing some support for European bourses which are posting modest gains at the moment.
07:50 ET FleetBoston (FBF) 41.91: WSJ reports that company is in advanced talks to acquire Liberty Financial's asset-management business for about $1 bln.
07:48 ET ChromaVision (CVSN) 4.06: ImClone Systems (IMCL) to begin use of ChromaVision's ACIS system in research and development of new and existing therapeutics focused on oncology.
07:46 ET Citrix Systems (CTXS) 25.09: UBS Warburg downgrades to HOLD from Strong Buy and lowers price target to $27.50 from $40. Believes CEO decision is at best an awkward end to the failed search for an outside CEO candidate. Firm seeing some increasing signs of weakness in enterprise sales channels that add to the risk.
07:42 ET StarMedia Ntwrk (STRM) 2.01: Latin American portal announced the completion of a $25 mln equity placement with BellSouth (BLS), whereby BellSouth has purchased shares of a new series of STRM convertible preferred stock at a common share equivalent price of $2.55 per share. Also receives a direct investment of $11 mln from a group of investors, including Primedia (PRM) and JPMorgan Partners.
07:34 ET Opening Indications : This morning's fair value figures -- S&P 500 fair value: 1249; closed 1 pt above fair value. Nasdaq 100 fair value: 1782; closed 3 pts above fair value. Current indications: S&P 500 futures are +5, or 6 pts above fair value. Nasdaq 100 is +17.5, or 20.5 pts above fair value... Absence of any major earnings warning last night leading to slightly positive tone.
07:27 ET Barr Labs (BRL) 67.70: US Court of Appeals reaffirms its earlier decision invalidating the patent protecting Eli Lilly's (LLY) Prozac anti-depressant. The decision invalidates the patent that would have prevented generic competition prior to Dec. 2003. Barr said that it expects to launch its generic 20 mg capsule product on August 3, 2001 at the expiration of Eli Lilly's pediatric exclusivity.
07:25 ET Johnson & Johnson (JNJ) 97.10: Company reports that obese patients using its epilepsy drug Topamax lost over 11% of their body weight one year after being treated with the drug. JNJ says it is conducting studies to test the efficacy of Topamax for a variety of other conditions, including obesity, neuropathic pain in diabetics, and migraine headaches. (Reuters)
07:17 ET Sprint FON (FON) 19.31: France Telecom (FTE) prices its planned offering of approx. 76 mln Sprint shares at $19 per share. FTE is selling part of its 9.9% stake in the long-distance telecom company as part of an effort to pay down debt.
07:10 ET H Power (HPOW) 11.15: Fuel cell development company receives order for six Beta Residential Cogeneration Units from a major European energy company.
07:05 ET PacifiCare Hlth (PHSY) 18.50: Warned that FY01 EPS will be $1.65-1.75 vs the current consensus of $2.45 and Q2 will be comparable to Q1's $0.39 vs consensus of $0.45, cited higher than expected costs in its California operations.
06:58 ET ATI Tech (ATYT) 7: Apple (AAPL) has selected company's 128 graphics processor to power the new iBook notebook computer.
06:53 ET Miravant Medical (MRVT) 12.24: Enters agreement with Pharmacia (PHA) that will provide up to $20 mln in funding, including the purchase of Miravant's drug SnET2, the purchase of certain manufacturing equipment and an amended line of credit. As part of the $20 mln package, PHA is providing a line of credit of up to $13.2 mln, of which $10 mln is subject to the filing of an NDA for SnET2 by Pharmacia or achievement of certain milestones.
06:45 ET Imclone Sys (IMCL) 47.32: Announces the early achievement of a clinical development milestone under its agreement with Merck KGaA for the rights to develop and market IMC-C225 outside of N. America. The milestone a $5 million equity-based payment. Under the terms of the agreement, Merck KGaA will be issued approximately 63,000 shares of ImClone Systems common stock at a price of $79.33 per share.
06:37 ET S&P 500 Changes : John Hancock Financial (JHF) to be added to the S&P 500 Index after the close of trading on Monday, June 4. JHF will replace Harcourt General (H).
06:19 ET U.S. Markets : S&P futures trading at 1254.50, 5.5 points over fair value, Nasdaq 100 futures trading at 1798, 16.0 points over fair value. The 30-year bond is unchanged at 5.841%. The dollar is sharply lower against the yen, but stronger against the euro.
06:18 ET European Markets : FTSE -0.20%, DAX +0.59% -- European stocks mixed. Firmer tone in US stock futures offers some help. Technology still pressured, with telecoms and telecom equipment makers underperforming following the recent surprise profit warning from Alcatel. Some good news however, as Allianz has pushed higher with its promise of billions of euros in savings and extra revenues with the takeover of Dresdner Bank. Export-oriented shares also boosted by continued euro weakness.
06:17 ET Asian Markets : Nikkei -1.71%, Hang Seng -1.83% -- Asian stocks hit by technology carnage. Nasdaq lost more than 4% yesterday. Nikkei lost 1.7% with telecoms weighed down by Deutsche Securities’ decision to cut its investment ratings on Japan Telecom and NTT following downgrades on 13 Japanese tech firms on Wednesday. Korea’s Kospi plunged 2.6% amid reports that GM offered just KRW1 tln to takeover ailing car maker Daewoo Motor. Hang Seng down 1.8%, its seventh straight day of losses. |
