Yup......." PG&E News Sends June S&Ps To Limit Down "
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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12:49 (Dow Jones) June S&Ps fell to limit down level of 1128.00, 27 points
lower, putting a 10-minute trading curb in effect. Market moved to limit
down as PG&E says it files for bankruptcy. (DMC)
12:46 (Dow Jones) Stocks bouncing back slightly after setting new lows
around the time that PG&E's Chapter 11 news broke. Nonetheless, the mood is
still quite different from Thursday. Every DJIA component but Johnson &
Johnson, Philip Morris and Wal-Mart is in the red. DJIA losing 159 at 9758,
and Nasdaq Composite off 53 at 1731. (GS)
12:40 (Dow Jones) PG&E's beleagured Pacific Gas unit files for Chapter 11 in
California. The company said it is taking this action in light of its
unreimbursed energy costs, which are now increasing by more than $300
million per month, "continuing CPUC decisions that economically disadvantage
the company, and the now unmistakable fact that negotiations with Governor
Gray Davis and his representatives are going nowhere." PG&E remains halted
on the NYSE. (GS)
12:31 (Dow Jones) Stock futures are quiet at midday, waiting for comments
out of Greenspan. "It seems that people are still afraid to get in the long
side without any conviction, but they still want a bottom," one trader says.
(DMC)
12:26 (Dow Jones) Bear Stearns senior economist Wayne Angell giving better
than 50% odds the Fed will cut interest rates before its May 15 meeting.
That's down from the 80% odds Angell gave for a cut before the Fed's last
meeting - a prophecy that caused a stir, lifted stocks, but didn't pan out.
Angell, a former Fed governor, feels the Fed should cut by 100 basis points,
but would settle for 50. (KJT)
12:18 (Dow Jones) Shares of French software company Infovista (IVTA) are
falling 36% Friday after it made cautious comments about the U.S. market.
The company said the U.S. economic slowdown has resulted in a lengthening of
the order cycle and the delayed signing of a few customer contracts. The
company said it has experienced growth in its European revenue and newer
international units, but it wasn't sufficient to offset delays in the U.S.
market. (CAL)
12:05 (Dow Jones) Is technology the sore spot for the S&P 500 Index in 2000
and so far this year? The S&P 500 has fallen 13% as of April 5, but without
technology and communications, it would be down 6%, according to Merrill
Lynch's derivatives team. Tech stocks have lagged drastically this year -
down 25% year to date - while communications stocks have held up, falling
just 1%, according to a Merrill note. (KXT)
11:56 (Dow Jones) Henry Paulson Jr., the chairman and chief executive of
Goldman Sachs Group (GS) weighed in on the SEC's Regulation Fair Disclosure
at the firm's annual meeting in New York on Friday. When asked how he felt
about the rule, which prohibits companies from sharing important information
with only a select few, Paulson responded that it was "well-intended" but
has had a negative effect by contributing to market volatility. "There is
not the free flow of information," he said. (CWM)
11:49 (Dow Jones) As Silicon Valley Bancshares (SIVB) continues to bounce
back (while other banks flag), an option investor opened a bullish position
by selling just out-of-the-money May 20 puts. The bank had jumped 19% since
Wednesday after it announced a share buyback and stood by 1Q estimates that
would meet or beat consensus. With stock at $21.50, the investor sold May 20
puts for about $200 a contract, either not expecting the stock to fall below
$20 by mid-May or willing to buy stock at that price. At the CBOE, 2,000
contracts traded, compared with open interest of 613. (KXT)
11:43 (Dow Jones) The Nasdaq Composite, now around 1736, failed to test
short-term breakout resistance at 1776.11 earlier this morning, a sign that
the index is likely to back down into 1600 handle. The 1675-1670 support
band could be particularly active. If 1776.11 resistance is decisively taken
out, it's reasonable to look for 1950 by next week. (SC)
11:30 (Dow Jones) Merrill Lynch analyst Ken Hoexter touting Allegiance
Telecom (ALGX) and Time Warner Telecom (TWTC) as his top picks. Allegiance
is an old standby for Hoexter, but Time Warner Telecom has ousted XO
Communications (XOXO) on his list. He also likes McLeodUSA (MCLD), but
thinks its revenue goals are too aggressive. Four months ago, most telecom
analysts had four top picks among the start-ups - Allegiance, Time Warner
Telecom, XO and McLeodUSA. Many also included Winstar Communications (WCII)
in that list. Those companies enjoyed the graces of financiers as well as
analysts. Now, we see a shrunken "top tier," where most firms don't include
Winstar or XO. (CBN)
11:23 (Dow Jones) Open interest in June S&Ps rose 3869 contracts to 458133
contracts and June Nasdaq fell 1074 to 56664 in Thursday's trade. Floor
traders say the rise in June was likely new longs, but they believe some of
the longs were exited in morning trade. The June Nasdaq open interest drop
suggests much of Thursday's gains was short covering. "You can't really be
surprised by that," one Nasdaq pit trader says. (DMC)
11:14 (Dow Jones) Marvell Technology Group (MRVL) shares climbed over 12%,
despite the company issuing a profit warning for its 1Q and fiscal 2002
after the close Thursday. One trader says investors had expected the
shortfall and were purchasing the stock, believing that the worst was over
for the company. W.R. Hambrecht reiterates buy rating. (SPJ)
11:09 (Dow Jones) When asked about what Friday's job report said about the
economy, U.S. Labor Secretary Elaine Chao said: "I think the economy is like
the Pillsbury Doughboy: it continues to soften." (NRD)
11:00 (Dow Jones) Nasdaq Composite, down 55 at 1730, neared 1715 earlier,
the first of three support points pegged this morning by Gruntal chief
technical analyst Todd Gold. The other two are 1620, and 1500 - spots the
index has bounced back from in the past. To technical analysts it would be a
good indication if the Nasdaq can stay above these points. (KJT)
10:52 (Dow Jones) George Gilbert, CSFB's software strategist, says when
corporate America does finally start to increase technology spending, he
expects it to extend existing infrastructure to communicate with customer
and partners. And he sees BEA Systems (BEAS), CheckPoint (CHKP), Veritas
(VRTS) and WebMethods (WEBM) benefiting most. (MLP)
10:43 (Dow Jones) Speculation on Wall Street that XO Communications (XOXO)
will soon cut its business plan to mitigate concerns about its debt load and
funding gap. Analysts Aryeh Bourkoff of UBS Warburg and Ken Hoexter of
Merrill Lynch both expect XO's management to cut capital spending in the
next few weeks. Thursday, another debt-laden start-up carrier, Winstar
Communications (WCII), halted network expansion and laid off 44% of its
workforce. (CBN)
10:37 (Dow Jones) Although the layoffs at BMC Software (BMC) suggest cost
cutting in anticipation of slower revenue, its solid March quarter bodes
well for other mainframe software vendors. Prudential expects Computer
Associates (CA) and Compuware (CPWR) to both meet-or-exceed its 4Q EPS
targets of 44c and 17c, respectively. SG Cowen says CA is a good "highly
defensive play." (MLP)
10:32 (Dow Jones) Economists at Goldman Sachs don't think the California
power crisis is much of a macro issue, saying "there is little reason to
expect important macroeconomic effects from the California power crisis,
even at the state level and particularly for the nation as a whole." (JC)
10:25 (Dow Jones) As Thursday's rally fizzles on jobs data suggesting we're
near a recession, option investors sold out-of-the-money calls, many in tech
names. In Sun Microsystems (SUNW), whose stock fell 5% to $13.94, investors
sold May 17.50 calls, earning about $100 a contract. These investors either
don't see Sun shooting past $17.50 by May 18 or are willing to sell stock at
that price. More than 16,192 contracts of these calls traded in the first
hour of trading, compared with open interest of 15,395, with these falling 5
cents to $1 at the Pacific Exchange. (KXT)
10:18 (Dow Jones) Though most economists looking for 50 BP ease in May, if
not sooner, Barclays economist Henry Willmore says underlying strength in
labor markets and signs of wage acceleration will limit May 15 rate cut to
25 BP. Calls inter-meeting move "unlikely." (BB)
10:12 (Dow Jones) Agilent Technologies' (A) news that it will temporarily
cut the pay of all employees by 10%, and revenue in the 2Q ending April 30
will be less than $2.9 billion, sent the stock in a tailspin Friday. Shares
were recently down 17%. But believers in Agilent may have something to cheer
about. Lehman Brothers analyst Edward White recommends investors buy the
stock. White says revenue at Agilent can grow "modestly" in 2001 and
"substantially" in 2002. (DLF)
10:04 (Dow Jones) February wholesale inventories fell by 0.1%, but sales
fell twice as much. Suggests inventories will be a drag on growth in 1Q, as
widely expected. Also suggests that imports slowed in Feb., since most
wholesale inventories are imported. (JM)
(END) DOW JONES NEWS 04-06-01
12:50 PM |
