MARKET TALK: Peers' Behavior Leaves Ciena Holders Wary
11 Jul 10:24
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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10:23 (Dow Jones) Investor psychology around optical systems maker Ciena
(CIEN) has shifted, leading Thomas Weisel Partners analyst Hasan Imam to drop
his stock rating to buy from strong buy and lower his price target to $45 from
$85. While Imam is still bullish on the company, he said recent blowups by
Ciena's peers, including Nortel (NT), Tellabs (TLAB) and Marconi (MONI) has
left investors "increasingly more skittish on Ciena, one of the last ones
standing." He added, "In light of this reality, we believe that (Ciena) will be
stuck in a trading range over the next six months, despite strong execution."
(JDB)
10:17 (Dow Jones) Rumors circulating that the Fed is holding an emergency
meeting to discuss the emerging markets crisis possibly sparked by Argentina's
problems. But Fed meets every week anyway, and often holds unscheduled
meetings. Further reality check: U.S. investors don't have a lot of exposure to
Argentina. (AES/GC)
10:05 (Dow Jones) Latin American equities in steep descent as tremors from
Argentina rock the region. Argentine and Brazilian stocks leading the dive with
Telecom Argentina (TEO) off 10% and Brazilian telecom Embratel (EMT) 5.3%
lower. (CAR)
10:00 (Dow Jones) Baseball's San Francisco Giants have a bit of a problem
with the pricking of the Internet bubble. Every seat at Pac Bell park has a cup
holder with the logo of now-defunct onliner grocer Webvan (WBVN), according to
the San Francisco Chronicle. Webvan had a three-year contract for the holders,
and there's still a year to go. "The idea of having a loser's logo splashed all
over the park is something the image-conscious Giants would like to see end
ASAP," the paper said. (RJH)
9:54 (Dow Jones) The good news if you're a CSFBDirect (DIR) shareholder is
that your parent, CSFB, is offering you $6 a share for your stock, what it
terms is a 28% premium. It's bad news if you were a buy-and-hold investor back
in 1999. The shares were sold in an IPO that year for $20 apiece. (RJH)
9:43 (Dow Jones) Merrill Lynch analyst Steven Fortuna cut his forecast for
worldwide personal-computer unit growth to a decline of 5% in 2001, from his
previous forecast of an increase of 3%, citing continued weakness in demand.
Fortuna said PC motherboard and notebook shipments out of Taiwan were lower in
June and that the weakness in the U.S. economy has appeared to have spread to
the Europe. One bright spot - 2002 could be "surprisingly strong in light of
the current deferrals coupled with several growth drivers," said the analyst.
He said a post Y2K refresh and the reacceleration of small business, consumer,
and Europe will contribute to the pickup. (DLF)
9:34 (Dow Jones) August Fed funds now pricing in 100% chance of 25 BP cut at
August FOMC meeting, broker says. Odds are up from about 88% based on Tuesday's
close and about 60% from last Friday. (SPC)
9:30 (Dow Jones) A McInsider doesn't impress some analysts. McDonald's (MCD)
choice of VP of finance Matthew Paull as its new CFO drew a muted early
response. "Given McDonald's weak performance, the Street was clearly expecting
an external candidate," says Lehman's Mitchell Speiser. He sees a "knee-jerk
reaction" in the stock as possible. CSFB's Janice Meyer says picking an insider
to succeed the retiring Mike Conley "leaves unanswered the question of whether
the new CFO will look at the business model differently." She says the
appointment is apt to be met with a "wait-and-see attitude." (RLG)
9:17 (Dow Jones) Merrill's Henry Blodget cuts Microsoft's (MSFT) revenue and
EPS view for June quarter and FY02 in light of Merrill's reduction in PC unit
forecast and, to a lesser extent, weak demand in enterprise software market.
Quarter view goes to $6.3 billion in revenue and 42c EPS from $6.5B and 43c.
Keeps accumulate rating, and says results at low-end of the range are already
in the stock, as many on Wall Street are expecting a soft quarter from
Microsoft. (TG)
9:10 (Dow Jones) Investment banking and research boutique Putnam Lovell
Securities has cut 5% of its staff, including analysts and an investment
banker, in response to a rough market environment. (LMC)
9:07 (Dow Jones) Latin America debt heading south as pessimism mounts about
Argentina's financial outlook. "Bottom line is that sentiment is so bad now
that, unless something new and big comes from Argentina, people won't be
willing to buy," said one New York-based strategist. (SCW)
9:01 (Dow Jones) After first warning that the call was not a group upgrade or
a reflection that he is leaning that way, Lehman Brothers' Thomas Driscoll
upgraded Noble Affiliates (NBL) to buy from market perform. The stock has
fallen about 30% since early March and is trading at a discount to the group,
he said. Driscoll expects Noble could add 25% or more to its production volume
by 2003 with results from its international projects in Equatorial Guinea,
Ecuador and Israel. (CCC)
8:55 (Dow Jones) Two-year Tsy yield has broken back through the 4% level,
last at 3.99%, for the first time since the June. 27 rate cut. Tsys are higher
across curve as equity and emerging market debt worries fuel a flight to
quality bid for government debt. (MM)
8:46 (Dow Jones) What do these names have in common: Adobe (ADBE), Brocade
(BRCD), Ciena (CIEN), Dell Computer (DELL), Hewlett-Packard (HWP), Intel
(INTC), Oracle (ORCL), Sun Micro (SUNW), and Yahoo (YHOO)? They are just a
fraction of well-known tech stocks that are seeing insider selling - some heavy
- even after huge drops, says Gary Kaltbaum, of Investor's Edge. "While many
pundits are calling for a second-half turnaround, who would you rather follow,"
he asks. (TG)
8:34 (Dow Jones) Lehman sees Motorola (MOT) 2Q essentially in-line with
modest expectations. Sees marginal improvement in handsets, but more macro
weakness in semis, infrastructure and broadband, and says challenging wireless
industry conditions likely to continue this year. Also says its estimates could
get fine-tuned lower after conference call. Keeps market perform rating, sees
few near-term catalysts, and maintains $17 target. (TG)
8:30 (Dow Jones) Wall Street is going to be greeted by more selling early
Wednesday, though nothing dramatic to start. Compaq's (CPQ) $400 million
revenue miss doesn't seem to be weighing on the shares, and the idea that
Europe is slowing isn't a new one. This morning's warnings come from the likes
of Comverse Tech (CMVT) and Newell Rubbermaid (NWL), while Barr Labs (BRL) ups
4Q views. Meanwhile, emerging-market-debt concerns are growing in the bond and
currency markets. Motorola (MOT) reports after the bell, and probably won't be
able to provide investors with much to get excited about, analysts say. Stock
futures ease, Tsys slightly higher. (TG)
(END) DOW JONES NEWS 07-11-01
10:24 AM |
