Breifing the whole day so far:
10:39 ET Finisar Corp (FNSR) 11 1/2 -1 5/16 (-10.2%): CIBC World Markets cutting estimates on FNSR following channel checks that revealed weak demand. Firm also noted that FNSR management is indicating that EMC is pushing out orders, business from BRCD will be down significantly, and EMLX is a concern... Firm reduces its FY02 EPS est. on FNSR to $0.19 from $0.26 and revenues to $278 mln from $401 mln
10:37 ET QUALCOMM (QCOM) 57 1/8 -2 3/4: Sources at Wit SoundView telling us that the firm is noting that the big two Korean carriers are merging,and to close the deal the government is making them freeze new subscribers to reduce market share; Wit believes that this will result in a freeze in orders for QCOM in a quarter that already looks to be in jeopardy.
10:33 ET Express Scripts (ESRX) 79.88 +1.41 (+1.8%): One of the stronger performers of the morning. Stock advancing on heels of strategic alliance signed with Choicelinx to co-market a combination of Web-based products that will allow employees of participating organizations to design health and pharmacy benefit plans according to their individual needs.
10:25 ET CIENA Corp (CIEN) 49 17/32 -4 9/32 (-8%): -- Update -- One of a host of fiber sector names being pulled down by Nortel (NT) warning. Stock took out $50 support early in the session. Should stock break below session low ($49), traders will be keying in on the $48 support level as a possible short-term rallying point.
10:22 ET Research In Motion (RIMM) 21.10 -3.58 (-14.5%): -- Technical -- Minor interest has developed in the wake of the opening meltdown. Intraday potential for minor upticks but without follow through beyond the key level at 22.70/23.25 (bottom of the recent March trading range and the May 2000 low) it will remain vulnerable. Next support is between 17.75 and 17.43.
09:58 ET Sector Watch: Semiconductor : -- Technical -- Minor double bottom at 604 in the SOX index? The index bounced after a recent retest of this floor with NVLS, AMAT, RMBS, ALTR and KLAC attempting to duplicate a similar feat. Key for the index (currently at 615) is a breach/stabilization above the 50 day ma (638) which the SOX has stalled out near the previous three sessions.
09:51 ET Agere Systems (AGR.A) 6.05 +0.05: -- Update -- IPO rises 0.8% from its $6 offering price. Issue currently trading at its high of the morning, after opening at $6.
09:47 ET Nasdaq Composite : -- Technical -- Pushes firmly lower but holds near support at 1909/1907 (yesterday's low/38% of rally off March 22 low). While a positive amid today's bearishness, gains back through at least the 1950 area are needed to help neutralize the current negativity. Next support is at 1891/1887.
09:43 ET Celgene (CELG) 23 7/8 +1/16 (+0.3%): Merrill Lynch initiates coverage with a NT ACCUMULATE, LT BUY rating. Firm's price target is $36 per share.
09:38 ET Sector Watch (OPENX ) : Broad based losses with networking (-5.6%), Internet (-3.9%), biotech (-3.2%), software (-3.2%) and telecom (-2.6%) pacing the way. Little of interest develops on the upside with some flight to quality gains seen in the bond market.
09:37 ET Strong Groups : Communications IC and semiconductor equipment stocks demonstrating relative strength off the open. Providing leadership are PMCS +1, NVDA +1/2, KLAC +1/2, BRCM +3/8, NVLS +1/8... SOX Index still in the red by 1%.
09:31 ET Biogen (BGEN) 61 3/4 -3 5/16 (-5.1%): -- Update -- Company expects Intron A dispute with Schering-Plough (SGP) to reduce 2001 royalty revenues to drop to $85-$95 mln from $160 mln. SG Cowen believes dispute will likely end up in arbitration. While Avonex sales to offset royalty shortfall, SG Cowen feels this removes a compelling near-term trigger.
09:20 ET Market Indicators : S&P futures close more than 17 pts below fair value. Nasdaq Pre-Market Indicator trading 56 pts lower.
09:20 ET C-Mac Industries (EMS) 25.20: CIBC World Markets downgrades from STRONG BUY to BUY due to Nortel exposure.
09:15 ET Gapping Up : Interact Commerce (IART +11%) rises to $11 3/4 on news company to be acquired for $12 per share in cash... Abgenix (ABGX) receiving shot in the arm from study results showing that ABX-IL8 blocks angiogenesis and inhibits the growth of human melanoma tumors implanted into mice... : Fiserv Inc. (FISV +2.5%) is going in the S&P 500 on March 30.
09:04 ET Cisco Systems (CSCO) 18 1/8: -- Update -- Robertson Stephens expresses continued caution on Cisco (CSCO); says that based on historical valuation metrics the company is worth between $6 and $12, but notes that this is a worse case scenario and is not predicting the stock will go there right away; sees no fundamental basis to buy the stock at current prices.
09:02 ET Handspring (HAND) 16 3/16: -- Update -- Merrill Lynch downgrades from NT ACCUM/LT BUY to NT NEUTRAL/LT ACCUM. Firm says although Handspring last night reaffirmed their confidence in revenue and unit sales growth rates, we believe there are signs of near-term secular saturation for PDAs and competitive shifts in the space.
09:00 ET PC Consolidation : Bear Stearns analyst Andy Neff first floated the consolidation idea back in January, and in today's Ripple Effect he's arguing that excess capacity in the PC sector will force consolidation in the next 3-6 months. The suggested combinations are: DELL buys GTW, IBM PC business, and partners with EMC; CPQ and HWP merge; GTW should find a partner, if not DELL, then Toshiba, NEC, HWP, or CPQ; AAPL should port its system to INTC.
08:58 ET Johnson & Johnson (JNJ) 83.25: Morgan Stanley upgrades to OUTPERFORM from NEUTRAL and sets a price target of $106. Upgrade is based on some alleviation of pipeline issue, a better outlook for Procrit, and a solid outlook for drug-coated stents. Sees Alza acquisition dilutive to EPS by $0.14 in 2001 and $0.05 in 2002.
08:58 ET Asia Global Crossing (AGCX) 5 1/2: Deutsche Banc Alex. Brown initiates coverage with a BUY rating and a $15 year-end 2001 price target. Deregulation has opened a $210 bln telecom services market in Asia; forecasts region will account for 30% in the increase in global telecom spending within the next five years. AGCX has positioned itself not only to capture this market, but incrementally, the Chinese market through an exclusive strategic partnership with Hutchison Whampoa.
08:52 ET Hollywood Casino (HWD) 9.03: Deutsche Banc Alex. Brown initiates coverage with a BUY. Near-term catalyst for stock will be the ramp-up of Hollywood Shreveport, which is expected to generate $39 mln of EBITDA in 2001. Given the company's solid assets in the Chicagoland and Shreveport markets, believe Hollywood could be an attractive acquisition candidate for one of the large-cap operators.
08:51 ET Lucent Tech (LU) 11.70: Nippon Telegraph and Telephone selects Lucent's Softswitch as part of trial of a new multi-service control system.
08:51 ET CIENA Corp (CIEN) 53 13/16: -- Update -- Robertson Stephens making positive comments on Ciena; says company continues to execute despite weakness in the space and that the quarter is in good shape.
08:49 ET Penn Nat'l Gaming (PENN) 13 7/16: Deutsche Banc Alex. Brown initiates coverage with a BUY. Successful completion and integration of the CRC acquisition should be a leading catalyst for earnings acceleration in 2H01. Charles Town facility should see considerable growth from a recent increase in slot capacity to approximately 2,000 machines.
08:47 ET Cisco Systems (CSCO) 18 1/8: -- Update -- In note commenting on Nortel preannouncement, JP Morgan mentions that Cisco will most likely be the next shoe to drop; cites lack of visibility in service provider market and weakness spreading into Europe.
08:43 ET China Mobile (CHL) 22.47: Bear Stearns initiates coverage with a NEUTRAL rating and a $22.80 price target. Firm says management is doing an excellent job positioning the company to maintain its dominant mkt position, and to expand into a number of new but complimentary telecom service areas, but the good news is in the price.
08:42 ET Informatica (INFA) 18 3/8: Cisco Systems (CSCO) has licensed the Informatica eSite analytic application to enable Cisco to enhance the services it offers customers, employees and partners via the company's Web sites.
08:39 ET Prudential on Banking : Firm remains negative on the sector, believes new regulatory action by the House Financial Services Committee which would permit banks to pay interest on business checking could have a negative impact on bank stocks. Also FDIC is considering increasing deposit insurance paid by banks, which could hurt earnings by 1%.
08:36 ET TECO Energy (TE) 27.49: Expects Q1 earnings to exceed $0.50 a share, compared to current mean estimate of $0.46. The increase is being driven by higher-than-expected utilization at TECO Power Services' Commonwealth Chesapeake Station.
08:34 ET FuelCell Energy (FCEL) 51 15/16: Robinson Humphrey initiates coverage with an OUTPERFORM rating and a $75 target; believes FCEL is ahead of its peers in bringing a commercial product to market and will likely book its initial commercial orders this year; company can turn profitable in 2004.
08:34 ET Conexant (CNXT) 10 1/16: Company's CX25871 video encoder solution has been chosen by Microsoft Corp. to connect the Xbox video game system to both digital and traditional analog television sets.
08:33 ET Interact Commerce (IACT) 7 15/16: Enters agreement to be acquired by The Sage Group plc for $12 per share in cash.
08:31 ET SAP AG (SAP) 32.93: SAP is sticking with 1H guidance for 2001. JP Morgan says there is a good case for SAP not to issue a profit warning before Q1 results. Talk of a slowdown in Europe continues to dog the sector but channel checks reveal no overall slowdown in European IT spending. Continue to rate SAP a BUY and believe it can successfully weather the current spending slowdown.
08:28 ET Market Indicators : Nortel warning weighing on U.S. equities this morning. Much of the damage being done on the Nasdaq, where Nortel suppliers are being upended by company's second revision to Q1 projections. Nasdaq PMI currently trading 48 pts (2.4%) lower. S&P futures decline to 17 pts below fair value, indicates Dow retreat of approx.135 pts (1.3%) at the open.
08:21 ET Handspring (HAND) 16 3/16: -- Update -- Banc of America Sec. downgrades from BUY to MKT PERFORM after PALM's lowered guidance. Analyst says Palm's significant downward revision in revenue is likely to affect the operating environment.
08:20 ET PurchasePro.com (PPRO) 7 1/4: Company and America Online (AOL) announced 10 new strategic agreements, including deals with Hewlett-Packard Company, Homestore.com and Spherion Corporation, to accelerate their B2B and e-commerce efforts, and jointly-develop the Netscape Netbusiness Marketplace. AOL and PPRO also announced a joint sales, marketing and product development operation in support of the Marketplace.
08:17 ET B of A Starts Chipmakers : -- Update -- Banc of America Sec. initiates coverage of 14 chip stocks all with MKT PERFORM ratings; says it's too early to overweight the sector, backlog cancellations are slowing, but bookings remain disappointing. Estimate global semi sales to contract 15-20% in 2001. Issues started: AMD, ALTR, ADI, ELNT, INTC, LLTC, LSI, MCRL, MCHP, MU, NSM, SMTL, TXN, XLNX.
08:16 ET Pre-Market Movers : PALM -37%... HAND -22%... ADCT -15%... MONI -10%... ERICY -9%... GSPN -8%... JDSU -8%... XOXO -7%... VIGN -6%... SCMR -6%... CSCO -5%... CIEN -4%.. PMCS -3%... Most of the weakness is attributable to earnings warnings by Nortel (NT) and, to a lesser degree, the Palm Inc preannoucement.
08:11 ET ADC Telecom (ADCT) 10 9/16: -- Update -- Company will hold a conference call at 8:30ET. The dial-in numbers are 800-399-7506 and 706-634-2489.
08:04 ET PECO II (PIII) 11 11/16: Lowers Q1 outlook to $0.14-$0.16 vs $0.19 mean estimate; full yr outlook lowered to $0.65-$0.75 (mean $0.82). Attributes shortfall to sharp economic slowdown in the U.S., coupled with diminished demand from a number of major communications customers.
08:00 ET Walt Disney (DIS) 29.20: Goldman Sachs reduces its FY02 estimate by 5 cents to $0.95, which includes an estimated $0.05-$0.06 benefit from the cost savings associated with the layoffs announced by the company. The estimate reduction is driven by lower than previously expected Broadcast network earnings and modest economic pressure on theme park attendance.
07:59 ET JDS Uniphase (JDSU) 23 5/16: Merrill Lynch lowers near-term rating to NEUTRAL from ACCUMULATE given lack of visibility into the next few quarters. Notes that Nortel (NT) accounts for 15% of JDSU sales. Reduces FY01 est. to $0.61 from $0.64 and FY02 to $0.55 from $0.62.
07:48 ET Bay Area Real Estate : WSJ reports that a study by Cushman & Wakefield and Rosen Consulting predicts that about 80% of the remaining dot-com companies in the San Francisco Bay area will collapse in the next year, eliminating about 30,000 jobs. The report focuses primarily on how commercial real estate will be affected by the technology shakeout.
07:41 ET VISX (EYE) 17.40: Lehman downgrades to MKT PERFORM from BUY due to market/competitive concerns.
07:37 ET Coca-Cola (KO) 46.61: Projects worldwide unit case volume growth in Q1 of 4%-5%. "In a slowing world economy, the company is benefiting from the strong performance of its portfolio of international operations." Puts growth in N. America at approx. 1%.
07:33 ET Biogen (BGEN) 65 1/16: After the close, company issued statement confirming Q1 earnings guidance of $0.45-$0.46. The current mean estimate for the qtr is $0.47. Company puts full yr earnings in the low $1.90s (mean $1.93).
07:25 ET Palm Inc (PALM) 15 1/2 : -- Update -- Robertson Stephens downgrades to LT ATTRACTIVE from BUY after last night's warning on concerns about the sharp drop-off in demand coupled with ballooning inventory levels; remains convinced of PALM's solid product positioning and roadmap moving forward particularly with higher levels of wireless integration and improved wireless e-mail.
07:24 ET Ariba (ARBA) 10 1/16: JP Morgan feels that the sharp decline in ARBA shares since negotiating the Agile Software (AGIL) acquisition puts the deal at risk. The shareholder vote has been moved back to mid-late May and each company will now report stand-alone qtr results. While not sure if AGIL shareholders could gather enough votes to block the merger or if companies will renegotiate terms, leverage is shifting towards AGIL... Firm also stating that it sees risk to ARBA's March qtr.
07:19 ET Agere Systems (AGR.a) : After several delays and price range reductions, the 600 mln share initial public offering of Agere prices. Shares of the Lucent spinoff will come to market at $6 each, well below the original $15-$20 range and at the low-end of the revised range. Morgan Stanley is serving as lead manager of the deal.
07:15 ET Yahoo! (YHOO) 15 9/16: UBS Warburg upgrading to HOLD from REDUCE based on valuation. After falling nearly 50% since mid-January, YHOO shares now appear fairly valued based on current market prices; also believes that ongoing speculation about a potential merger partner can provide price support at current levels.
07:12 ET SanDisk Corp (SNDK) 23 5/8: UBS PaineWebber downgrading to HOLD from BUY. Given statements made by PALM and firm's analysis of the digital camera market, believes that current weakness in the consumer electronics market should limit upside to firm's EPS estimates through at least Q3.
07:08 ET Triton Network (TNSI) 1 15/16: Receives purchase order totaling in excess of $5 mln to supply Invisible Fiber broadband fixed wireless products to a major telecommunications service provider.
07:04 ET Handspring (HAND) 16 3/16: -- Update -- Following earnings warning by competitor Palm Inc (PALM), Handspring confirmed its revenue projections for the remainder of its fiscal year ending June 30.
07:00 ET Earnings Warnings : Nortel (NT) sees Q1 loss of $0.10-$0.12 vs mean loss est. of $0.03... Palm Inc (PALM) puts Q4 loss at $0.08, compared to $0.03 profit anticipated by analysts (warning hits shares of HAND and RIMM)... NetScout Systems (NTCT) lowers Q4 outlook to $0.01-$0.03 range from $0.14... Valmont (VALM) sees Q1 earnings of approx. $0.20 vs $0.10 mean estimate.
06:54 ET Richmond County (RCBK) 26.75: Agrees to be acquired by New York Community Bancorp (NYCB 41.05) for approx. $802 mln in stock. Terms of the agreement call for RCBK holders to swap each of their shares for 0.68 of a share in NYCB. The transaction values RCBK at $27.91 per share.
06:48 ET Abgenix (ABGX) 21: Reports preclinical study results showing that its investigational fully human monoclonal antibody, ABX-IL8, blocks angiogenesis and inhibits the growth of human melanoma tumors implanted into mice.
06:44 ET S&P 500 Changes : Fiserv Inc. (FISV) will replace Old Kent Financial (OK) in the S&P 500 Index after the close of trading on March 30. Mirant Corp (MIR) will replace Briggs & Stratton (BGG) in the S&P 500 Index after the close of trading on April 2.
06:39 ET TIBCO Software (TIBX) 9 17/32: Mobile Internet provider, BT Cellnet, is planning to use TIBCO technology to support its service management process.
06:36 ET U.S. Markets : S&P futures trading at 1173.10, 18.9 points below fair value, Nasdaq 100 futures trading at 1713.50, 41.5 points below fair value. The 30-year bond is up 16 ticks at 5.423%. The front end has resumed its outperformance however with the bullish curve steepening bias. Gains in fixed-income have come on the back of another round of equity concerns. Euro weakness and dampened rate cut expectations in Europe may be encouraging the better flight to quality buying in dollar-denominated fixed-income.
06:34 ET European Markets : FTSE -1.60%, DAX -1.65% -- European stocks under pressure this morning with most bourses off more than 1%. Market hit by another round of earnings concerns as well as an ever-dampening speculation surrounding the prospects for an ECB rate cut tomorrow. Phone-equipment stocks such as Ericsson, Alcatel and Marconi hit hard on the back of Nortel Networks’ second warning of the year. The company said it expects a per-share loss of $0.10 to $0.12, compared with last month’s forecast of just a $0.04 per share loss. Not to be outdone, the late-day warning from Palm has also had an impact, dragging Psion, Europe’s biggest maker of hand-held computers, down about 10%. While Palm met expectations for Q3, it warned that it expects a $0.08 loss per share in fiscal Q4 Also of interest, we would note that San Paolo-IMI, Italy’s second-biggest bank, has slipped on concerns that commissions will decrease in Q1 of 2001on the back of slumping equity prices.
06:33 ET Asian Markets : Nikkei +0.93%, Hang Seng +1.13% -- Asian stocks mixed last night, though the Nikkei did gain almost a full percent with talk of asset allocation trades out of fixed-income. Firmer tone in the yen continued to weigh on exporters, with Honda still on the defensive amid concerns about European demand. More talk of public fund buying, along with positive sentiment surrounding soon-to-be announced emergency economic measures also proved supportive. Hong Kong higher with short covering boosting blue chips such as China Mobile and HSBC. Korea and Taiwan weaker. Korean market internals absolutely horrific with decliners outnumbering advancers by a more than 3 to 1 ratio. Liquidity concerns at Hyundai Engineering and Construction the main driver of the sell-off. Taiwan hit by technical resistance just below 6000, while better profit-taking was also reported.
06:22 ET Viacom (VIA) 46.25: Company giving up on plan to split off its Blockbuster (BBI 13.30) unit, saying it prefers to keep the video-rental chain, reports the Wall Street Journal... VIA President Mel Karmazin was reported as saying the change in Viacom's attitude reflects a significant turnaround in Blockbuster's core video-rental business.
06:14 ET ADC Telecom (ADCT) 10 9/16: Following NT's lead, ADCT is guiding estimates sharply lower this morning... Company now expects to report sales in Q201 of approximately $650-700 million (compared to $771 million in the second quarter of 2000), and pro forma diluted loss per share of between $0.10 to $0.15... The current consensus figures had the company earning $0.09 on revenues of $840 mln... Company earned $0.10 on $771 mln in sales during the same period last year... ADC also announced plans to eliminate an additional 3,000 to 4,000 employees worldwide from its existing workforce by the end of its fiscal year ending October 31, 2001... Conference Call: ADC will hold a conference call at 8:30 am ET to discuss its revised guidance... The call can be accessed by domestic callers at (800) 399-7506 and by international callers at (706) 634-2489. |
